Verotusta

Verotusta, or taxation, refers to the system through which a government collects revenue from individuals and organizations to finance public services and redistribute resources. In Finland, verotus comprises national, municipal, and local instruments and is administered under a framework of national legislation and EU rules.

Key components of verotusta include personal income tax, capital income tax, corporate income tax, value-added tax (VAT), property taxes, and social security contributions. Personal income tax combines municipal tax with state income tax and, for members of certain religious communities, church tax. Capital income is taxed separately. Corporate profits are taxed at a corporate tax rate. VAT taxes consumption, with different rates for goods and services. Property taxes fund local services and can be based on assessed property values.

Administration lies with the Finnish Tax Administration (Verohallinto), which collects taxes, issues assessments, and handles appeals. Employers usually withhold wage taxes; self-employed individuals file annual tax returns, and individuals can claim deductions and tax credits to reduce liability. The tax system is designed to be progressive in income tax, to ensure equity, and to support a broad welfare state, while using incentives to influence behavior and investment.

Tax policy is decided by Parliament and implemented by the government, with regional and local authorities collecting local taxes. Finland adheres to international tax norms and cooperates on cross-border taxation, transfer pricing, and information exchange.