perusvähennyksen

Perusvähennys is a Finnish term referring to a basic deduction applied to an individual's earned income for tax purposes. It is a fundamental part of the Finnish income tax system designed to reduce the tax burden on lower earners. The perusvähennys is automatically calculated by the Finnish Tax Administration (Verohallinto) based on the income reported by the individual.

The amount of the perusvähennys is not fixed but depends on the individual's total earned income. Generally, the higher the earned income, the lower the perusvähennys becomes, until it reaches zero for higher income levels. This progressive structure ensures that those with lower incomes benefit more significantly from the deduction. The specific calculation formula and thresholds are determined annually by the Finnish government.

The purpose of the perusvähennys is to provide a tax relief that ensures a basic level of income remains untaxed. This aims to support individuals and families with essential living costs and to make the tax system more equitable. It is a standard deduction that applies to earned income, such as wages and salaries, and is distinct from other possible tax deductions or credits that an individual might be eligible for. The perusvähennys is a key element in Finnish tax policy concerning income redistribution and social welfare.