This following tax advice was prepared by EY in August 2018. The Fulbright Finland Foundation does not take any responsibility for the content of the tax advice.
Tax Residency Position
Individuals staying in Finland for a maximum period of six months are generally considered non-residents for tax purposes. Non-residents only pay taxes in Finland on Finnish source income.
As a non-resident you are not obliged to file a Finnish tax return unless you have Finnish source income from which no taxes have been withheld.
Taxation of Fulbright Grant
Finland is not entitled to tax the grant as you are considered non-resident in Finland. The grant will be taxed only in your country of residence, i.e. home country (most likely USA).
Housing Provided in Finland
Housing provided to you in Finland (e.g. by a Finnish university or other Finnish entity) can be entirely or partly tax-exempt income for you if rules of temporary business trip or temporary secondary occupation in Finland can be applied.
The rules for temporary secondary occupation will apply if:
- You have your main employment in your home country and you stay in Finland for a temporary project or otherwise temporarily (max. 3 years)
- You are not on leave of absence or leave without pay from the home country employment
- You handle the work tasks related to your main work also while staying in Finland.
Instead of full tax-exemption, the accommodation provided to you may be considered as partly taxable in case your family is residing there with you and this has increased the costs for the housing provided. Generally 50% of the value of the housing benefit is considered as taxable, if no further documentation regarding the value is provided.
The provider of the housing may determine whether the housing will be reported as taxable or not. However, the final decision of the taxability is done by the Tax Administration. If the housing is tax-exempt, no actions are required from your side.
Taxable Housing Benefit – How to Proceed
If the housing cannot be offered tax-exempt, you will pay 35 per cent tax-at-source on the basis of taxable value of the housing benefit. A non-resident deduction of EUR 510 per month or EUR 17 per day will be granted, but in order to get the deduction, please file a Finnish tax return (see below).
Please note that the taxable value of the housing benefit is not the same as the amount of rent, but the value is determined on the basis of formula set by the tax authorities. The provider of the housing will be obliged to calculate the taxable value. If the taxable value of the housing is max. EUR 510 per month, no tax is levied due to non-resident deduction.
The taxable value of housing benefit depends on the size and location of the apartment (please see below table).
| Area | Taxable value € per month |
|---|---|
| Helsinki 1 | 268 € + 11.70 € per square meter |
| Helsinki 2 | 260 € + 10.60 € per square meter |
| Helsinki 3, Espoo, Kauniainen | 227 € + 9.50 € per square meter |
| Helsinki 4, Vantaa | 179 € + 9.50 € per square meter |
| Jyväskylä, Kuopio, Lahti, Oulu, Tampere, Turku, Hyvinkää, Järvenpää, Kerava, Kirkkonummi, Nurmijärvi, Sipoo, Riihimäki, Tuusula, Vihti, the rest of Helsinki |
171 € + 8.00 € per square meter |
| The rest of Finland | 147 € + 7.10 € per square meter |
| Helsinki 1 includes zip codes 00100, 00120, 00130, 00140, 00150, 00160, 00170 and 00180. Helsinki 2 includes zip codes 00200, 00210, 00220, 00240, 00250, 00260, 00270, 00280, 00290, 00300, 00310, 00320, 00330, 00340, 00350, 00380, 00400, 00440, 00500, 00510, 00520, 00530, 00540, 00550, 00570, 00610, 00660, 00670, 00680, 00830 and 00850. Helsinki 3 includes zip codes 00360, 00370, 00390, 00410, 00420, 00430, 00560, 00600, 00620, 00630, 00640, 00650, 00700, 00720, 00780, 00790, 00800, 00810, 00840 and 00870. |
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Reporting the Housing Benefit to the Tax Authorities
Please report the income (housing benefit) to the Finnish tax authorities and also pay the tax. The reporting can be made:
1. By filing a Finnish tax return (form 3001e) either in the beginning of stay in Finland or any time by the filing due date determined by the Finnish tax authorities (usually mid-May following the tax year). Please note that the timeline of the tax return process may change for the year 2019, which is why it would be recommended to check the important dates from the Tax Administrations website. You should receive an income certificate from the provider of the housing at the end of the tax year, where the taxable value to be reported in the tax return is stated.
Please fill in to the tax return form:
- Your personal information and possible Finnish ID number (if you have one)
- Use the additional information section at the end of the tax return form to specify the dates you have stayed in Finland
- Please also report the value of the housing benefit in the section 1.1 (ask from the provider of the housing), or in case you do not know the value you may also report the size of the apartment (sqm) as well as location
- Make a claim for deduction e.g. “Please take into account the deduction of EUR 510 per month/EUR 17 per day when issuing the taxes for my housing benefit”
2. If you wish to handle the payment prior leaving Finland, please contact the tax authorities, e.g. by phone +358 20 49
Salary Income from Finland
If you receive salary (e.g. lecture fees) from a Finnish payer while staying in Finland, please apply for a tax-at-source card (form 5057e – Application for tax-at-source card) and give it to the payer. The payer will then deduct the tax from the salary payment and you will not be obliged to report the payment to the tax authorities. A non-resident deduction of EUR 510 per month or EUR 17 per day will be granted on the tax card.
Instead of the 35 per cent tax-at-source taxation, you may claim that you will be taxed according to progressive taxation. You can make the claim by applying for a non-resident’s tax card (form 5057e, together with the form 6148e).
