A4: Multimedia presentation about the Tax System in each country

1. Taxation in Finland

2. Basic information about taxation in Finland
● In Finland almost all income is taxed, as are goods and services
● The State, the Municipalities, the Evangelic Lutheran Church
and the Orthodox Church all have the power to levy taxes.
● Direct taxes include state income tax, capital tax, inheritance
and gift tax, and asset transfer tax, all payable to the State
● Municipal tax payable to the appropriate Municipality, and
● Church tax payable to the church.
● Indirect taxes include VAT added to the price of products, and
excise and customs duties.

3. What is VAT?
● VAT is a consumption tax that the seller of goods or
services will add to the price.
● The seller thus collects this tax from customers to
remit it to the state.
● Liability to pay VAT concerns anyone who sells goods
and services, rents out goods, or is engaged in similar
commercial operations on an ongoing basis.

4. VAT Rates of 2015
● General rate of VAT, effective for most goods
and services
24 %
● Food, animal feed, restaurant services, meal
catering services
14 %
● Books, medicine, services relating to physical
exercise and sports, movies, entrance to
cultural events and to entertainment events,
transport of passengers, accommodation
10 %

5. Environmental protection tax
● Payed from products which are harmful for health or environment
● From the consumer price of gas, over 64% are taxes, 24% of them are VAT
● Mild alcohol drinks: +15%
● Strong alcohol drinks +10%

6. Earned income
● Earned income are wages or salary, and pensions. Similarly, fixed income such as
social benefits, compensation, and unemployment relief are regarded as earned
income.
● Earned income is a progressive tax. That means the more person earns, the more
he/she pays taxes
● In addition, there are two flat rates of tax applicable to earned income, namely
municipal tax and church tax (1% to 2%).

7. Income tax brackets for 2015, for tax on earned income
payable under Finnish income tax law No 1535/1992
In calculating your taxable income, take into account:
● tax allowances available if you are a Finnish
resident
● possible deductions for certain types of
expenditure
Also here is to pay: Church tax: 1 — 2%, Municipal
income tax: 16.5 — 22.5% (depending on the municipality)
Taxable earned income (€) Tax on income above the lowest
tax bracket (%)
16 500—24 700
6.5
24 700—40 300 17.5
40 300—71 400 21.5
71 400—90 000 29.75
90 000- 31.75
Income-based tax rate

8. Income tax brackets for 2015, for tax on earned income
payable under Finnish income tax law No 1535/1992
In calculating your taxable income, take into account:
● tax allowances available if you are a Finnish
resident
● possible deductions for certain types of
expenditure
Also here is to pay: Church tax: 1 — 2%, Municipal
income tax: 16.5 — 22.5% (depending on the municipality)
Taxable earned income (€) Tax on income above the lowest
tax bracket (%)
16 500—24 700
6.5
24 700—40 300 17.5
40 300—71 400 21.5
71 400—90 000 29.75
90 000- 31.75
Income-based tax rate

9. Capital income
Profits, returns, earnings etc. derived from investments that the taxpayer has made
are regarded as capital income. Also regarded as capital income are: Gains from
selling an asset, any other income that can be attributed to the fact that the taxpayer
has owned assets, dividend income, rental income, capital gains, interest income,
proceeds from a life insurance contract, the share of profits of an investment fund.
In 2015 the capital income tax rate is 30% for income up to €30,000 and 33% for
capital income exceeding that amount.

10. Community charge
● Local income tax paid by residents, real estate tax
and a share of corporate tax account for almost half
of all municipal revenues.
● Community sets their own per cent of community
charge, it could be for example 20% In Kemi
community charge is 21,25% and in Kauniainen
community charge is 16,5.
● And that is it because people who live in Kauniainen
are rich and healthy.

11. Community charge
Fees and charges account for about a quarter of municipal revenues. Most of the customer charges are
collected for services such as water supply, waste disposal, power supply and public transport. Just under
one tenth of social welfare and health expenditure is covered through customer and patient charges. Basic
education is free.
Central government grants local authorities financial assistance in exchange for a wide range of statutory
services. The central government transfer system evens out financial inequalities between local authorities
and ensures equal access to services throughout the country. Central government transfers account for less
than one-fifth of all municipal revenues.​

12. Tax exemptions
= exemption from taxes
In Finland, the general rule of individual taxation is that
you are obligated to pay tax on all your income to the state
and the municipality. On individual taxation incomes are
divided into earned income, investment income and tax-
exempt income.
Tax-exempt incomes are, for instance, income from
self-collected berries and mushrooms, strike pay and
alimony. Besides, some social benefits are also tax-free,
for example child benefit.

13. Tax exemptions and value added tax
On value added taxation,
among other things health and
medical care services are tax-
free.
In addition, if the turnover of
the company is less than 10000
€ in a year, the company is not
obligated to register for VAT, at
which time it is able to sell their
products exclusive of value
added tax.