Taxable incomes: documentation of statistics

Data description (SIMS 3.1)

Statistics on taxable incomes (formerly Statistics on income and property) describe the income subject to taxation, deductions, liabilities and taxation of private persons. The basic data of the statistics are drawn from the Tax Administration’s database and cover all private persons who have received taxable income during the year. Income and taxation are examined by, inter alia, income brackets as well as age and gender. The total data also allow for regional examination upwards from the level of municipalities. The statistics are produced annually. As from statistical year 2005 they are available only on the Internet.

Concepts and definitions (SIMS 3.4)

Income recipient

In the statistics on taxable income the statistical unit is private person. Included are all recipients of taxable income. Income recipients living abroad with a limited tax liability are included in the statistics when they have other income than taxed by the withholding tax legislation.

Municipal tax

Municipal tax is paid in municipal taxation in accordance with taxable income according to the price of the municipal tax rate (municipal income tax percentage) and church tax according to the price of the church tax rate imposed in the area of the parish.

State income tax

Income tax is paid to the State on the basis of the size of taxable income. Income tax on earned income is determined according to the progressive income tax scale. Income tax on capital income is determined according to the relative capital tax stock, which was 25 per cent between 1993 and 1995, 28 per cent from 1996 to 1999, 29 per cent from 2000 and again 28 per cent from 2005. Wealth tax is no longer levied as of 2006.

Tax liability

The general tax liability concerns persons living in Finland in the tax year and domestic corporations. The person is considered to have resided in Finland if he or she has here a permanent dwelling and home, or if he or she continuously stays here for over six months, when temporary absence does not preclude the stay from being considered continuous. A person who has not lived in Finland in the tax year and a foreign corporation is liable to pay tax only on income received from Finland (limited tax liability). State and municipal taxes on persons with limited tax liability are taxed according to the so-called withholding tax legislation. Withholding tax concerns wages and salaries and pension income, interest, shares and royalties received from Finland. Instead, tax is imposed on other income of a person with limited tax liability according to the taxation legislation. Municipal tax is paid on earned income to the municipality of residence. The municipality of residence is that where the taxpayer was registered at the start of the tax year. The result of the business activity of a self-employed person is determined according to the act on taxation of business income. Taxable income in business activity is in principle all income received as money or monetary benefit. Deductible expenses are expenses and losses caused by the acquisition or maintenance of income in business activity. Taxable income of a self-employed person in agriculture is determined on the basis of the act on taxation of agriculture. Agricultural income refers to the sum of pure income from agriculture. Pure income from agriculture is derived when expenses caused by the acquisition or maintenance of income are deducted from pure income obtained as money or monetary benefit during the tax year. In connection with the tax reform in 1993, taxation on income derived from forestry was amended to be based on actual income and expenditure. Proceeds from forestry sales are taxed as capital tax, except for the value of acquisition work. However, acreage-based forest taxation that was previously applied to all forest owners remained as a parallel system during the transition period from 1993 to 2005 until its final abandonment in 2006.

Taxable incomes

With certain exceptions, all income received in money or monetary benefit is subject to tax. Some social assistance, pensions, daily allowances and compensations are not subject to tax. Such are child benefit, housing allowance and social assistance. The statistics do not either include interest income subject to withholding tax. Grants and scholarships received from general government are neither liable to tax. Taxable income of a natural person and decedent's estate are divided into earned and capital income. The income tax act contains in principle an exhaustive list of capital income. Earned income is other than capital income. Tax is paid to the State only on capital income, while in addition to State income tax, municipal tax and sickness insurance contribution are determined on the basis of earned income.

Institutional mandate (SIMS 6)

Quality assurance (SIMS 11.1)

Release calendar (SIMS 8.1)

User access (SIMS 8.3)

Confidentiality - policy (SIMS 7.1)