kunnallisverolaki

Kunnallisverolaki is the Finnish statute that governs municipal income taxation. It provides the framework for how municipalities levy taxes on residents to fund local services and how those taxes are administered within the national tax system. The act defines who is subject to municipal tax (primarily residents of the municipality) and what constitutes the tax base, which is based on earned income and allows deductions such as a basic deduction and an earned income deduction. Capital income is not taxed under the municipal tax; it falls under national taxation rules.

Municipal tax rates are determined by each municipality and can vary between municipalities. The rates are applied to the tax base and are collected by the Finnish Tax Administration (Verohallinto), which handles withholding, declarations, assessments, and payments, and then distributes the revenue to the respective municipalities. The act also lays down procedural rules for tax declarations, assessments, payment timelines, and the rights of taxpayers to appeal decisions to administrative courts.

Revenues from municipal tax are a major source of funding for local services, including education, health and social services, housing, and infrastructure, reflecting the balance between local autonomy and national fiscal discipline. The law interacts with related taxes such as church tax, which is administered by the same tax authority for eligible taxpayers. The framework has evolved through amendments to reflect changes in municipal autonomy, social welfare financing, and national tax policy.