Tax Guide for Investors 2009

Tuesday, September 1, 2009

Sisältö

TO THE READER

This guide describes how capital income received by private individuals is taxed in Finland. Most frequently occurring situations are highlighted through examples. In special circumstances it is advised to contact a tax expert. All individuals who need to file a tax return in Finland receive a tax proposal from the tax authorities. It is advised to carefully check that it includes all the relevant information and that the information is correct. Especially as capital income is concerned there is often a need to amend the tax proposal, for example the sale of assets is normally reported only at this stage. However, if the information is correct and there are no amendments needed, the taxpayer does not have to return the tax proposal to the tax authorities.

You should note that this Guide describes the Finnish tax rules only concerning individuals who are resident in Finland. An individual is deemed to be resident in Finland if he has his main adobe in Finland or if he stays in Finland for a continuous period of more than six months. Individuals resident in Finland as well as resident corporate bodies and the estates of deceased persons are basically liable to tax in Finland on their entire income, whether derived from Finland or abroad (unlimited tax liability). Non-resident individuals and corporate bodies are liable to tax on their income derived from Finland only (limited tax liability).

Certain (in practice most) items of Finnish source income derived by nonresidents are subject to a final withholding tax at a flat rate of 15, 19, 28 or 35 per cent. Dividends, interest, royalties, income from employment and pensions are the most common types of income that are subject to the final withholding tax.

At the time of the writing of this guide the Finnish parliament is processing new legislation proposal concerning the taxation of long-term savings. The tax reliefs that at the moment concern voluntary pension insurance plans would be extended to other long-term saving instruments, such as investment funds. If the legislation is passed in the parliament as proposed, the new legislation would come into force as of January 2010.

Even though this Guide is intended to be as up to date as possible you should be prepared to changes occurring in legislation or in the interpretations of the existing laws. It is recommended to follow possible changes from the mass media as well as from the Finnish Foundation for Share Promotion’s website www.porssisaatio.fi.

As a tax expert assisting with putting this Guide together has acted Mr. Vesa Korpela from the Tax Payers Federation (Veronmaksajain Keskusliitto). We have received assistance with the English translation from tax partner Mr. Kai Wist from the PricewaterhouseCoopers Helsinki office.

In Helsinki on May 20, 2009

The Finnish Foundation for Share Promotion

Sirkka-Liisa Roine