Do you live in Finland and intend to work as a self-employed person in another Nordic country?
Do you live in Finland and intend to work in another Nordic country as a self employed person? Please read the following to learn about the taxation of such income.
Finnish income tax
You continue to have the obligation to declare in Finland the full taxable results and profit of your activities as a self-employed individual. You continue to submit income tax returns and pay taxes to Finland, and this includes tax on your income from self-employed work in another Nordic country.
However, you may be obligated to pay tax to the other Nordic country as well. In this case, you should demand that this tax is credited from your Finnish tax on the same income. Write full explanation of the foreign tax in your Finnish tax return form.
Will the country of work have the taxing right?
The Nordic country where your self-employed work activity is located may impose tax, if you have a permanent establishment in that country. The income derived from your permanent establishment will be taxable according to the local rules of the Nordic country in question. The existence of a permanent establishment also means that you should submit tax returns to the authorities of the Nordic country in question.
You can find a definition of Permanent establishmen according to Nordic Tax Treaty from "General info/Permenent Establishment".
If you are a doctor, auditor, engineer or consultant (so-called free professions), you may also be liable to tax in the country in which you perform work, when you have stayed there for more than 183 days during a 12-month period. This applies even if you do not have a permanent establishment.
Click the name of the Nordic country in question to read specific tax instructions.
Social security coverage
There are special regulations according to which it will be decided where you should have the social security insurances. For more information you shall have to contact Finnish Centre for Pensions (FCP/ETK, etk.fi) in Finland or the social security authorities in the country where you work.
Value added tax
Pursuant to the general rule governing VAT, the country where goods are sold and services are rendered is the country where VAT is payable. Consequently, for goods sold in Finland, and services rendered in Finland, you should pay VAT in Finland.
Because sales are usually taxable in the country of consumption, the seller is always expected to contact the tax authorities of the country of consumption to find out the exact details of his VAT liability. To find more information concerning the other country, click the name of the Nordic country at the bottom of this page.