Going abroad for work always brings extra costs. When
an employee from another country comes to work in Finland, their employer may
pay or reimburse some of those extra costs without tax implications. This also
applies to certain costs while working in Finland, as well as when moving from
Finland after termination of employment.
There are several employer-provided services and
benefits that concern all employees working in Finland. This article discusses
such services and benefits that specifically relate to employees moving from a
foreign country to Finland.
Expenses paid by an employer may be tax-exempt under
specific provisions of the Income Tax Act, on the basis of its general provisions,
case law, or established tax practice. As a rule, an employer cannot reimburse an
employee’s expenses without tax implications. Should the employer pay or
reimburse the employee’s ordinary living expenses, the payable amount would be considered
taxable income.
As a rule, the employer must pay expenses directly to the
service provider because in principle monetary payments to employees are taxable.
However, in some cases the employer may reimburse the employee for the costs
against receipts.
The employer may pay passport, visa and work and residence
permit fees as well as certain other costs related to entry into the country
without tax implications. There will likewise be no tax implications if the
employer turns to an external service provider to obtain the necessary
documents.
As of 2025, an employer may pay an employee’s and
their family members’ (marital spouse or cohabiting partner, as well as any
child of the same household) travel and moving costs to Finland without tax implications.
It makes no difference whether the employee is posted to Finland or signs a regular
local employment contract with a Finnish employer.
Expatriate insurance taken by an employer for an
employee and their family members is also regarded as a non-taxable benefit.
Any training expenses paid by the employer are not generally considered taxable
income in Finland if the training serves the employer’s interests. With the
amendments to the lncome Tax Act that came into force at the beginning of 2025,
cultural, language and other similar training arranged for a foreign employee is
also regarded as serving the employer’s interests. Therefore, the employer may
pay such training costs without tax implications to the employee.
So-called relocation service providers offer a wide
range of services for companies to help foreign employees and their families enter
and settle into a new country. As long as those services only provide
assistance in mandatory paperwork and guidance through the process, as well as any
training mentioned above, this constitutes no taxable benefit for the employee.
However, should a relocation package include services such as assistance in
finding housing, making a rental agreement and dealing with an employee’s
personal bank, social security or tax matters, the costs paid by the employer
are considered taxable income for the employee.
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