Finland: Taxes and Costs
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Rental income taxes are generally high in Finland
INDIVIDUAL TAXATION
Non-residents are taxed on their income from Finnish sources. Spouses are taxed separately.
INCOME TAX
Non-residents are taxed on their Finnish-sourced income. Taxable income is divided into two categories; income from capital and earned income. The two categories are taxed separately at different rates.
Earned Income
Earned income is taxed at progressive rates.
INCOME TAX RATES 2007 |
|
| TAXABLE INCOME | RATES |
| Up to €12,400 | nil |
| €12,400 – €20,400 | 9% on band over €12,400 |
| €20,400 – €33,400 | 19.5% on band over €20,400 |
| €33,400 – €60,800 | 24% on band over €33,400 |
| Over €60,800 | 32% on all income over €60,800 |
| Source: Global Property Guide | |
Income from Capital
Income from capital is taxed at a flat rate of 28%.
Rental Income Tax
Rental income falls under income from capital and is taxed at 28%. Income-generating expenses, such as maintenance, renovation and interest (provided it came from a loan used to acquire income) are deductible from rental income before the 28% tax is imposed.
CAPITAL GAINS TAX
Gains from the sale of property are included in the income from capital category. Taxable capital gains are computed in two ways:
- Gross selling price less acquisition costs;
- Gross selling price less 20% in lieu of actual acquisition costs.
The resulting taxable income is then taxed at the 28% flat rate. Gains that do not exceed €1,000 are exempt from capital gains tax.
PROPERTY TAXATION
Real Estate Tax
A real estate tax is levied on properties located in Finland. The tax is imposed on the value of the property at rates varying from 0.5% to 1%. For residential buildings, the rate may vary from 0.22% to 0.5%. The actual rates are established by the municipalities, which are the recipients of the revenue from this tax.
CORPPORATE TAXATION
INCOME TAX
Corporate income is taxed at a flat rate of 26%. Depreciation, maintenance costs and other business-related expenses are deductible from gross income.
Capital Gains
Capital gains are not taxed separately, but included in the gross income of the company. Capital gains are generally computed as selling price less the depreciated acquisition value of the property.
Finland - more data and information
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