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Finland Issues Guidance Easing Burden on Cross-Border Workers

Rosemary Birardi | 21 Jun 2022

The tax authority of the government of Finland has issued two sets of guidance related to the double taxation of cross border workers.

Revised guidance published 27 April 2022 was issued to clarify instructions in Section 3.3 concerning reverse crediting and Section 3.4 regarding the exemption method used under the treaty. The guidance also implements a decision of the Finland Supreme Administrative Court in April 2021 providing that income derived from services to international bodies, such as the United Nations, must be excluded when determining the gross income of an employee.

Guidance published 28 April 2022 addressed changes to the Nordic Tax Treaty on cross-border commuters from Finland, Denmark, Norway, and Sweden. These updates are effective from 1 January 2022 until further notice.

The guidance of 28 April revises the provisions of Section 6 of the treaty making changes to the rules on how health insurance contributions are paid. An update to Section 8.2 reflects changes to the tax treatment of cross-border commuters' other income. Also, a new Section 8.3 allows the tax authorities of Denmark, Finland, Iceland, Norway, and Sweden to transfer taxes among themselves, making it easier for cross-border workers to have tax payments credited to their country of residence.

Edward Kowalski, Esq., is Manager, Payroll Information Resources, for the American Payroll Association