Need advice on USA expatriation to Finland

[jdpenk]

Hi,
I am a California resident and green card holder, and UK passport holder. My US employer wants me to move to Finland for 12 months (March 2007-2008). I have house in California, will continue to be resident there, pay tax and keep my house, etc.

So, can I just show up in Finland, and live there without a work permit - since I am employed in the USA and not by a Finnish subsidiary? Do I need to pay tax in Finland as well - or just in California? My work doesn't actually require me to actually be in Finland, I could live pretty much anywhere; I will just base myself there and travel around to meet various companies.

Is it possible to live in Finland, and technically not be employed there, for 12 months without becoming a resident?

Thanks.

[Karibu]

You definately need a residence permit if you stay here 12 months. You can apply residence permit in Finnish embassy in your country with reason working. You get more detail on their website and propably can download the application too.

You get lots of knowledge just by googling "working in Finland". Here is one link you might find useful:

Immigration office guide:
http://www.uvi.fi/netcomm/content.asp?path=8,2473

[jdpenk]

Thanks for the link, but according to the information on the website I don't need a residence permit... (or did I misunderstand?)

"citizens of European Union (EU) Member States and equivalent persons do not need a residence permit for an employed person or for a self-employed person." (I am a British Citizen and passport holder, and US resident).

More than this, I don't intend to seek employment in Finland, since I am employed by my current employer in California? Or does the Finnish government still consider me as being employed?

I've heard people say that I need a residence permit if I want to stay for more than 3 months, but I thought that only applied if I want to seek employment there?

[Karibu]

My apologies. I misread your post. I just saw "California" and that made you a US citizen in my brains, heh. As you are EU citizen, IMO you can just come here and start working. Check other posts in this forum, especially person named "daryl" has best advice on this board.

As about paying tax, I think there is some limit of time of working here when you start to pay tax according Finnish law. I am pretty sure that if you reside here 12 months, you need to pay tax according to Finnish laws. Tax informatin you should check here.

[jdpenk]

OK, I'll ping Daryl.

Someone told me that if I am living in Finland for more than 6 months then I need to pay tax in Finland. But, how will the Finnish Tax Authority know what I earn - it will be payed to me in the US!

Worst case, I could ask my US employer to pay me a minimum salary and then just give me a whopping lump sum bonus when I get back to the US at the end of 12 months in Finland.

As you can see, I amd trying to minimize my Finland tax liability because that would suck.

[Kai]

Check out Daryls post in this thread:
bb/viewtopic.php?t=16919
As a Brit in Finland you don't need a residence permit but you do need a document as proof of the right of residence that is also called a residence permit Daryls post has a fuller explanation.

[jdpenk]

OK, I think I get it; I don't need a residence permit, but I do need to provide evidence that I don't need one, which ends up being the same deal in a weird sort of way (??).

That being the case, can I suppose that I can still be a resident of California too, for that period, since I am technically not claiming residence in Finland?

Any idea how that affects my tax liability in Finland? Can I get away with only paying tax in the US?

I wonder if it is the same in all EU countries. Maybe I should go and live somewhere else in the EU for a year; somewhere where I can avoid paying local taxes if possible.

[Desundial]

technically, since Finland and USA have a tax treaty, you need to pay taxes in both countries, but will receive a credit in each for the amount of tax paid in the other. And finland will want you to report your income in USA as well as in Finland for the accounting.

It's a difficult tight rope to try to be here for a full 12 months and yet avoid the tax man. In average day-to-day life you need the person ID number you get when you register as in residence to get things done. And it's something awkward to try to get a register for residence based on employement yet not obtain a tax card (the firm can't legally pay you from their finnish office without this document). And what about healthcare? Will they be giving you a kela card?

It sounds like your employer should be taking the responsibility for explaining all this to you and for helping you arrange all your paperwork - i.e. tax card, registration with the police (this is the residence permit thing, don't want to resurrect that thread here , kela card / private healthcare).

If your company is trying to avoid finnish soc sec. payments by paying you direct deposit to your california bank, then this is a different situation that will leave you in an awkward position re: healthcare, above registration, etc. Anyway they should still be helping you with any and all paperwork if they are asking you to do this!

FYI, if they are proposing this later option (payment to US bank) you better square ahead of time the expenses - as in your US salary is worth 25 to 30% less, depending on exchange rate and how you transfer / withdraw / spend (i.e. credit card / atm / finnish bank transfers) money. And everytime you buy something / pay a bill it includes up to a 22% mark up for VAT. If they don't pay you bonus money you're lossing you. If they really want you to be invisible in finland, they'll need to pay all your housing and utility bills, your phone, transportation - going to have a car or?? Get the idea?

Anyway if you say out of the US for a full calender year, you don't have to pay tax on money you earn, and are paid, elsewhere. You can file non-resident, and it shouldn't affect your permanent status. Look at http://www.irs.gov for more information. Or, you can come and go from finland on a trip home every 3 months, and keep getting paid in california and not register in finland (for your citzenship I think you need to register for stays over 3 months. Citizens of nordic countries are the only ones who don't have to register).

[Mark I.]

Maybe I should go and live somewhere else in the EU for a year; somewhere where I can avoid paying local taxes if possible.

If it makes things easier, think about those taxes as your child's school and health care payments.

[Karibu]

And it's something awkward to try to get a register for residence based on employement yet not obtain a tax card (the firm can't legally pay you from their finnish office without this document).

IIRC you can get paid without tax card, but it means that you are automatically taxed with the heaviest tax percentage (which is 60%, by the way) and you can get overtaxed income refunded to you when tax officials complete your taxation of the given year. The decision of of taxation is given to you around May next year and the refund is given to you on December. This is a situation you propably want to avoid.

[Hank W.]

I'd love to be able to avoid taxes too.

[jdpenk]

Thanks for all the postings on this. I'm not out to screw the Finnish economy, I used to live there from 1998-2002 and I was a good contributor to the local economy

My employer was planning on paying me a cash housing and car allowance, get extended US health care coverage that is good for living in Finland.

I know that life is pretty tough in Finland without I henkilotunnus, so that's why I was trying to figure out how it's actually possible to live there 'under the tax radar'. I guess it isn't! Fair enough too I suppose.

So now I will go off and look for a tax expert who can tell me what I am up for in California and Finland, then I can decide if it is worth going or not.

Is it really feasible to just go there for 3 months, then go back to the US for a week, then back to Finland again, for 12 months? It sounds like the immigration officer at Vantaa airport might look at me with a strange and concerned look when I keep showing up for another 3 months. Has anyone actually done this before?

[Hank W.]

Yes but no. If you read the rules one can reside within Schengen for 90 days, within a 6 month period. So it means you need to wait a bit longer than a day...

What I would do as you, is I'd be my own consulting company. I'd pay them taxes and so forth according to the income I earn. Now of course the amount I bill equals the expenses... And probably the company would be based in the UK, so...

[daryl]

I know that life is pretty tough in Finland without the henkilotunnus

I understand that you have lived and worked in Finland before. It is an iron fast bet that your original identity number remains yours for all sempiternity. Aside from anything else, it identifies you for pension fund purposes and appears on your ETK statement of pensionable earnings.

daryl

[Hank W.]

Ah yes indeed. So you are already in the computer. Just say "yo, I moved back!"...unless you never bothered to move out, so now you have 6 years of unpaid tv-licence fees to pay

Yes, if you once was here you "exist". Life is a tad bit easier in that aspect (and a tad bit more difficult to avoid taxes).