valtionveroon

Valtionvero, or state tax, is the portion of Finland's personal income tax collected by the central government. It applies to residents’ income above defined thresholds and is separate from the municipal income tax. The tax base includes earned income, pension income, and certain forms of capital income, with rates that rise progressively as income increases. Rates and thresholds are determined by the Finnish Parliament, and the tax is administered by the Finnish Tax Administration (Verohallinto). Employers typically withhold the state tax at source, and individuals file an annual tax return that determines the final liability; refunds or additional payments may result from the assessment.

In practice, total personal income tax consists of municipal tax and, for higher incomes, the state tax. Church tax may also apply if the person is a church member. The state tax funds central government functions such as defense, social security, infrastructure, and public services. Tax credits and deductions, including basic and earned income deductions, reduce the total amount payable and apply across both municipal and state components.

Historically, valtionvero evolved as Finland developed a fiscally balanced, centralized tax system. Over the 20th and 21st centuries, reforms have adjusted thresholds and rates to reflect economic conditions and policy goals. Today, valtionvero remains a standard element of Finland's progressive personal income tax framework, alongside municipal and church taxes, contributing to national revenue while allowing for deductions and credits for individual taxpayers.