Taxation in Finland
Taxation is a central part of Finnish society. Taxes finance public services, support the welfare state, and reduce social inequality. Understanding how taxation works in Finland helps explain how healthcare, education, and social security are funded.
The purpose of taxation
Taxes are collected to finance public services and common expenses. In Finland, taxation supports healthcare, education, social security, infrastructure, and public administration.
Taxation also plays a redistributive role. Progressive taxation means that those with higher incomes generally pay a larger share in taxes.
Income taxation
Income tax is the most important tax for individuals in Finland. It consists of state tax, municipal tax, and church tax for members of religious communities.
The tax rate depends on income level and municipality. Employers usually withhold income tax directly from wages.
Consumption taxes
Consumption taxes are paid when goods and services are purchased. The most important consumption tax is value added tax (VAT).
VAT is included in the price of most products. Reduced VAT rates apply to certain goods and services, such as food and public transport.
Corporate and other taxes
Companies operating in Finland pay corporate income tax on their profits. Corporate taxation contributes to public revenues and supports public services.
Other taxes include property tax, excise duties on alcohol, fuel, and tobacco, and environmental taxes.
Tax compliance and fairness
Paying taxes is a legal obligation in Finland. The tax system relies on accurate reporting and compliance.
The Finnish Tax Administration oversees tax collection and provides guidance to taxpayers. Transparency and trust support high compliance rates.