Verotuspohja

Verotuspohja, or the tax base, is the amount of income or profit that is used as the basis for calculating taxes in Finland. The exact meaning depends on the type of tax, but in general it is the sum on which the applicable tax rate is applied. For individuals, the tax base typically corresponds to earned income and other taxable income after deductions and exemptions defined by law. For companies, the base is taxable income (net profit adjusted for tax purposes).

Calculations are defined by tax legislation and administrative practice. The Finnish Tax Administration (Verohallinto) uses the verotuspohja to determine withholding tax on wages, to issue or adjust a taxpayer’s tax card, and to prepare the annual tax decision. The tax base is also used in determining state, municipal and church taxes, as well as social security contributions, and it forms the starting point for self-assessed tax returns.

Deductions and allowances reduce the tax base; credits reduce the final tax payable. The exact items that reduce the base or qualify for exemptions depend on tax type and personal circumstances, such as work-related expenses, housing deductions, or losses carried forward. Changes in tax law or in a taxpayer’s situation can alter the verotuspohja and, consequently, the amount of tax owed.

Verotuspohja is a central concept in the Finnish tax system, linking income, deductions, and tax liability across different tax types and procedures. See also related terms such as tax card, withholding, and taxable income.