Obtaining a tax card is a crucial step in the broader process of recruiting and employing foreign workers in Finland. This process involves several key steps, including applying for a residence permit, acquiring a Finnish personal identification number, and securing a tax card and a bank account. Additionally, it is essential to ensure that the worker's social security registrations are properly managed and that they are informed about any potential tax deductions they may qualify for.
Foreigner's Tax Card
Foreign workers are required to obtain a tax card so they can provide it to their employer for payroll. A Finnish personal identification number is required for the tax card. In addition, the worker must fill out forms and visit the tax office to apply for the tax card. A relocation consultant assists the foreign expert in obtaining both the personal identification number and the tax card and in properly filling out the forms.
The taxation of foreign workers is influenced by the length of stay in Finland and whether the employer is Finnish or foreign. Typically, the worker is required to pay their taxes to Finland if they stay in the country for more than six months.
There are differences in taxation depending on the worker's profession; for example, researchers and teachers from certain countries may receive a tax exemption. In addition, foreign key personnel have their own tax card, which requires meeting certain conditions related to salary and job duties. The aim of the special procedure for key personnel is to increase the attractiveness of Finland among top professionals.
Finnish taxation can surprise a foreigner
A relocation consultant can also assist with issues following the procurement of the tax card. For example, the consultant can help the worker understand the Finnish tax system and advise on how to avoid common errors or ambiguities that may arise with the tax card.
It's important to understand that Finnish taxation is progressive, meaning that the tax rate increases as income increases. This is a significant difference compared to many other countries where taxation is a flat rate.
The complexity of the Finnish tax system may initially seem confusing, but with professional help and advice, the process runs smoothly. While Finnish taxation is high in international comparison, many foreign workers have appreciated Finland's high-quality public services funded by taxes.
What to consider when applying for the first tax card?
When applying for the first tax card, the worker must determine their income for the entire year. Relocation services provided by the employer, flight tickets, moving expenses, or a "relocation bonus" can be partly or entirely subject to tax. Therefore, they must also be taken into account when applying for a tax card. A knowledgeable relocation service provider can assist both the employer and the employee with the tax implications of relocation.
Often the move to a new country occurs in the middle of the tax year, which results in a lower tax percentage for the rest of the year. It is a good idea to remind the employee at the end of the year when a new tax card arrives automatically. The new tax card should be checked, and the tax rate increased to match the actual income that the worker earns during a full tax year of employment.
In conclusion, the recruitment and employment of foreign workers in Finland can be a complex process, but with expert support, it can be done efficiently and smoothly. Our experts are ready to assist in every step - don't hesitate to contact us!
