Thursday, May 03, 2007

Paying income taxes in Finland

Last week the Finnish tax forms arrived. Big difference from the USA. Here's why:

  • Federal and local taxes are both handled in one form, as opposed to the US where separate federal, state, and local tax payments and forms are required.
  • The numbers are already precalculated for you based on the income reported to the government by your employer. All you do is check that the numbers are correct and sign the paperwork.
  • Standard deductions are already precalculated for you. There are few, if any, itemized deductions allowed. The basic tax form is essentially the front and back of one piece of paper.
  • I am paying taxes for the two months I worked in Finland in 2006 (November and December). Based on these two months, my percentage of tax from my total income amounted to 10.5%. Compare that to over 30% in the USA (state and local taxes combined).


At 1:25 PM, Blogger Ex-Expats said...

There is even more to wonder: if you have loans or mortgage, the bank reports itemized deductions directly. If you own shares and sell them, the wins/losses are precalcucated.

First you think it's convininent, then you get the big brother-feeling.


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