Taxation for remote working
Where you pay tax and what conditions apply to you as a remote worker varies and depends on how much of your life you have moved with you and where you are considered to have your residence.
Where is my residence?
By residence, the state usually means the place where you are registered, but for those who work remotely from Åland, it depends on what you have left in your home country, among other things. For example, the following may have an effect:
- properties (house, summer cottage, apartment, land)
- family (spouse/minor children)
- financial ties (board member, your own company).
It is up to your former homeland to allow you to go, neither Åland nor Finland can affect that decision. If your previous home country continues to deduct tax from your salary even after the move, you must read in the tax agreement how your taxation should be adjusted. Remember to inform the tax authorities in your former home country when you are working remotely from abroad.
Information about taxation
Working for a foreign employer in Finland (and in Åland)
How do I pay taxes?
How to pay taxes in Finland depends entirely on your employer in your home country. If your employer follows the instructions in the link on employer obligations (see below), you only need to apply for a new tax card in Finland. Then your employer takes care of the rest, from paying in taxes and premiums to submitting an application to the Incomes Register.
However, if your employer does not fulfil their obligations, the situation will become more complicated. Then you must do the following yourself:
- apply for tax prepayments handle your employer’s obligations (for example, fill out an application for the Incomes Register at Skatt.fi).
- At Skatt.fi you will find important information for if you have moved to Åland but receive your salary from a foreign employer in another country, for example Sweden.
You must agree on the pension and unemployment insurance premiums with your employer. That is, if it is your employer who is responsible for the agreement and will pay the premiums or should you do it yourself.
Does the Åland Municipal Tax Act affect my taxes?
When you move to Åland, you pay tax according to the Åland Municipal Tax Act. This also applies to those who move from other parts of Finland.
The law gives you the right to deduct any medical expenses if you have been registered in Åland since 31 December the previous year.
More information about the Åland Municipal Tax Act can be found here:
Deduction for housing
You can make deductions when you need an extra home. For example, if you are registered and living in Åland, but need to rent a home in the town where your workplace is located.
For those who move from another place in Finland, it’s important to know that the Åland Municipal Tax Act differs from Finnish law. This means, among other things, that a deduction for housing in the place of work may differ in amount.
Other tax deductions
In addition to the Åland Municipal Tax Act, there are also other deductions that you can make if you work remotely:
What about seafarers and flight personnel?
For those who work at sea or as flight personnel, other rules apply.
When you work at sea, you primarily pay tax in the flag state, i.e., in the country where the ship is registered. If the flag state and your country of residence are not the same, it is your country of residence that ensures that you do not have to pay double tax.
Flags of convenience, such as the Bahamas, are an exception. If you work on such a ship, you instead pay tax in your country of residence.
Seafarers with families have an obvious country of residence, while there is room for interpretation for seafarers without families.
Flight personnel are taxed differently depending on the kind of tax agreement you have. If you live in the Nordic countries, you pay tax in your country of residence, regardless of where the work is based.
Again, for flight personnel with families, the country of residence is more obvious than for those without families.