Valtionvero

Valtionvero, or state tax, is the portion of personal income tax in Finland that is collected by the central government rather than by municipalities. It applies to earned income above certain thresholds and is structured as a progressive tax, meaning higher income levels are taxed at higher marginal rates. The exact rates and income thresholds change from year to year as part of annual fiscal planning.

As one component of the Finnish personal income tax, valtionvero is levied in addition to municipal income tax. Taxpayers may also face church tax if they are members of a church. Capital income is taxed separately at its own rates. The state tax base is calculated after applicable deductions and tax credits, such as basic deductions and other allowances, and the final tax payable is the sum of the municipal tax and the state tax, along with any other applicable charges.

Tax withholding for earned income typically covers the state portion of the tax as part of payroll administration, with the Finnish Tax Administration handling remittance. At year’s end, individuals file a tax return to reconcile withholdings, claim deductions, and determine any additional state tax due or refunds.

The valtionvero exists to fund central government functions, including national administration, defense, and social services. Its structure and thresholds are periodically adjusted through the Finnish budget and tax policy processes.