tuloverolaki

Tuloverolaki, or the Income Tax Act, is Finnish legislation that governs the taxation of individuals’ income, including earned income such as wages and pensions, as well as capital income. The act defines the tax base, the applicable tax rates, and the deductions and credits that reduce tax liability. It forms the core framework for how personal income tax is calculated in Finland.

In practice, personal income tax comprises municipal tax, a state income tax that is progressive, and, where applicable, church tax collected from members of religious congregations. Tax is collected through prepayments by employers or other payers based on estimated annual income, with an annual tax assessment issued by the Finnish Tax Administration (Vero) after a tax return is filed or reviewed.

The law distinguishes different income categories and specifies which deductions or allowances may apply. Common adjustments include work-related deductions, basic and general deductions based on personal circumstances, and credits related to family or housing costs; many deductions depend on an individual’s situation. The Tuloverolaki also governs reliefs, exemptions, and the treatment of capital income, such as interest, dividends, and capital gains.

The act is part of Finland’s broader tax system and interacts with other taxes and social contributions. It is amended periodically by Parliament to reflect economic and social policy goals. Administration and enforcement are carried out by Vero, with taxpayers required to file returns and pay due taxes.