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Finland changing income tax system next year

Among other changes, when taxpayers get their tax cards in 2019, the cards will no longer feature a separate - and higher - tax rate for secondary employment.

Esitäytetty veroilmoitus.
File photo of Finnish tax card. Image: Yle


The tax authority Vero will issue taxpayer's tax cards a bit differently next year, according to an announcement by the Finnish government on Thursday.

Starting in 2019, the country's income tax cards will no longer feature separate income ceilings for each payment cycle, which are generally monthly. Instead, the cards will have a set earnings limit for the entire year.

If a taxpayer earns more than that annual income limit, employers will be responsible for applying a higher tax rate to the worker - according to the tax authority's guidelines.

At the same time, the use of a separate tax card - and higher tax rate - for secondary employment will be eliminated. Instead, a single tax rate will be applied to all employment during the tax year.

Income from secondary employment - or from several employers - will no longer be subject to different rates, and salaries will be paid out based on the employee's annual base tax rate.

Freelancers in particular need to be vigilant

Another change coming next year will be that employers will no longer be required to keep a physical copy of workers' tax cards. Employees are only obliged to show their employers the cards - and the annual taxation rate - at the beginning of the tax year.

Also, tax cards shown to employers no longer need to be original ones issued by the tax authority, a photocopy of the document will be sufficient, according to Vero.

The authority advised taxpayers to carefully monitor their annual earnings throughout the year, in order to avoid having to pay back taxes if income limits are exceeded. Workers receiving income from several employers need to be particularly vigilant, Vero advised.

More information in English about the coming changes can be found at the tax authority's website.

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