Taxes in Finland: Which should I pay?

Finland, a country known for its stunning northern lights and landscapes, is also a transparent and efficient tax hub. So much so, that its high-quality education system and other public services are funded through the local tax system. If you’re looking for relevant information about this Nordic country’s tax regime, here are the most important details for you. 

In this guide, we’ll review the main taxes individuals in Finland need to pay in 2025, including the updated rates, percentages, and income ranges. We’ll also cover tax responsibilities and benefits for businesses. We hope this serves as a starting point for your planning, whether you’re moving to, working in, or living in this Scandinavian country. 

Taxes for Individuals in Finland (2025)

Individuals in Finland must pay different types of taxes depending on their income, consumption, and property. Below, we detail the main updated taxes for 2025:

Income Tax

The income tax in Finland is progressive, meaning the percentage increases with income levels. It consists of three main components:

• State income tax (managed by the central government)
• Municipal income tax (varies depending on the municipality)
• Church contribution (applicable if you’re a member of the Evangelical Lutheran Church or the Orthodox Church)

Rates for 2025 (approximate):

State tax:

• Up to €21,200 ($23,100): 12.64%
• €21,200 – 31,500 ($23,100 – 34,400): 19%
• €31,500 – 52,100 ($34,400 – 56,900): 30.25%
• €52,100 – 88,200 ($56,900 – 96,400): 34%
• €88,200 – 150,000 ($96,400 – 164,000): 41.75%
• More than €150,000 ($164,000): 44.25%

Municipal tax:

• Varies between 4.7% and 19.7%, with an average of 9.28%

Church contribution:

• Between 1% and 2.25%, only if you’re a member of an official church

Yle Contribution (public media tax):

• 2.5% of annual net income above €15,150 ($16,600) (maximum of €160 ($175) per year).

Example:
A person earning €35,000 ($38,300) a year could pay:

• 30.25% state income tax on the applicable portion
• ~9.28% municipal income tax
• Between 1% and 2.25% church tax (if applicable)
• 2.5% Yle contribution (max. €160 ($175)).

Consumption Tax (VAT)

The Value Added Tax (VAT) is one of the main indirect taxes in Finland and is applied to most goods and services.

VAT Rates in 2025:

• Standard rate: 25.5%
• Reduced rate: 14% (food, books, medicines, transportation, accommodation, sports services, etc.)
• Super-reduced rate: 10% (only magazines and newspapers)

Example:
If you buy a book for €20 ($22), you’ll pay €2.80 ($3.10) in VAT (14%).

Tax on heritage

In Finland, there is no general wealth tax, but there are taxes related to property:

• Property Tax:
  Paid annually and based on the property’s cadastral value and location.
  Rates range between 0.41% and 2.0%.
• Capital Gains Tax:
  Applied to the sale of assets such as real estate or shares.

Capital Gains Tax Rates in 2025:

• Gain up to €30,000 ($32,800): 30%
• Gain over €30,000 ($32,800): 34%

Example:
If you sell a property and make a €50,000 ($54,400) profit:

• €30,000 × 30% = €9,000 ($9,800)
• €20,000 × 34% = €6,800 ($7,400)
• Total to be paid: €15,800 ($17,200)

Labour Taxes

Employees in Finland pay several social contributions on their gross salary:

• Pension insurance contribution:
  • 7.15% (under 53 years old and over 63)
  • 8.65% (between 53 and 62 years old)
• Unemployment insurance: 1.5%
• Health insurance: 1.36% on earned income

Example:
With a monthly salary of €3,000 ($3,260), you would pay approximately:

• €215 ($235) in work-related contributions (around 7%).

Inheritance and Gift Tax

This tax applies when receiving an inheritance or gift. The rate depends on the value received and the degree of relationship to the donor or deceased.

Rates in 2025:

• Group I (spouses, children, parents): Between 7% and 19%
• Group II (other relatives and non-relatives): Between 19% and 33%

Example:
If you inherit €100,000 ($108,700) from your father, you would pay between €8,700 and €13,700 ($9,470 – 14,920), depending on the applicable tax bracket.

Taxes for Corporations or Businesses in Finland

Businesses in Finland are subject to various taxes, which vary depending on their activity, size, and legal structure. Below are the main taxes that corporations must consider in 2025:

Corporate Income Tax (CIT)

Starting from January 1, 2025, the corporate income tax rate in Finland has been reduced from 20% to 18%. This measure aims to stimulate investment and improve the country’s economic competitiveness.

Example: A company with net profits of €500,000 ($543,500) will pay €90,000 ($97,800) in corporate tax (18% of €500,000).

Value Added Tax (VAT)

VAT in Finland is applied to most goods and services. The rates in effect for 2025 are as follows:

• Standard rate: 25.5% (applies to most products and services).
• Reduced rate: 14% (applies to food, catering services, animal food).
• Super-reduced rate: 10% (applies to books, medicines, passenger transportation, accommodation).

Example: If a company sells a product for €100 ($109), they will add €25.50 ($28) in VAT, making the total for the customer €125.50 ($137)..

Real Estate Tax

Companies that own real estate in Finland must pay an annual tax based on the property’s cadastral value. The rates range between 0.41% and 2.0%, depending on the location and type of property.

Example: For a property valued at €1,000,000 ($1,087,000) with a rate of 1%, the annual tax would be €10,000 ($10,870).

Social Security and Payroll Contributions

Companies are required to make social security contributions for each employee, which include:

• Pension insurance: Approximately 16.95% of the gross salary.
• Unemployment insurance: 0.52% for salaries up to €2,251,500 ($2,448,000); 2.06% for salaries above that.
• Work accident and occupational disease insurance: Varies depending on the sector and associated risk.

Example: For an employee with an annual gross salary of €50,000 ($54,400), the company could pay around €8,475 ($9,220) in social contributions.

Transfer Tax

When a company acquires real estate or shares, it must pay a transfer tax:

• Real estate: 3% of the purchase value.
• Shares: 1.5% of the purchase value.

Example: If a company buys a building for €2,000,000 ($2,175,000), they will pay €60,000 ($65,250) in transfer tax.

How to Pay Taxes Online in Finland?

The Finnish tax system makes it easy to fulfil tax obligations through the digital platform MyTax (OmaVero). This portal allows businesses to manage their taxes efficiently and securely.

Steps to Pay Taxes Online:

1. Access MyTax: Visit MyTax and log in with your credentials.
2. Select the tax: Choose the type of tax you want to pay (VAT, corporate tax, etc.).
3. Review the details: Check the amounts and due dates.
4. Make the payment: You can pay directly from MyTax using the Paytrail Oyj payment service provider. If your bank is not compatible, you can make a bank transfer using the details provided in MyTax.

It’s important to ensure that the necessary authorisations are set up correctly in your bank to allow payments through MyTax’s PSD2 interface.

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Tax Benefits in Finland

Finland offers several tax incentives for both individuals and businesses, mostly aimed at promoting foreign investment, innovation, and sustainability. Here are some of the most relevant tax benefits for 2025:

For Businesses

• 150% deduction on R&D: Businesses involved in research and development projects in collaboration with research organisations can deduct up to 150% of the expenses incurred between 2021 and 2025.
• Double depreciation for new machinery: Businesses can apply accelerated depreciation of 50% instead of 25% for new machinery and equipment purchased between 2020 and 2025.
• Tax credits for green investments: From March 2025, a temporary tax credit for sustainable industrial investments has been approved to boost the ecological transition.
• Regional incentives funded by the EU: Certain regions in Finland are eligible for EU-funded incentives, such as additional deductions for investment and development projects.

For Individuals

• Deductions for sustainable relocation: Until 2027, taxpayers can deduct up to €3,500 ($3,810) for expenses related to converting oil heating systems to more sustainable energy sources.
• Tax exemptions for foreigners: From 2025, benefits related to international employment, such as relocation services, visas, and transportation, are exempt from taxes for employees and their families.
• Deductions for relocation expenses: Foreigners can deduct relocation costs to Finland, including transportation, accommodation, and other related expenses.

Frequently Asked Questions About Taxes in Finland

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