Earnings-related pensions are taxable income for which a tax card for pension income is required.
Taxation at the start of the pension
The Tax Administration calculates your personal withholding tax rate for your pension. For calculating the tax rate, the Tax Administration needs your pension decision, information concerning any other possible pensions and income and any withholding tax paid on them.
The Tax Administration will deliver the tax card electronically directly to Keva.
Keva may use, for a period of two months, the withholding tax rate you have reported on your pension application. If the tax information is missing entirely, the withholding tax rate on the pension is 60%.
50% tax is withheld on a pension paid as a lump sum or retroactively from previous years.
When we receive the tax rate for your pension, we will refund you any possible excess tax that we may have withheld. The refund is only possible for pensions paid during the year in progress.
Tax information from the Tax Administration following the first payment year
After the first payment year we will receive your withholding tax rate from the Tax Administration annually.
If your pension or other income changes significantly during the year, you need to contact the Tax Administration in order to adjust your withholding tax rate to correspond with your changed income.
We provide annual information concerning paid pensions to the Tax Administration and the pension recipient. We dispatch the letters to pension recipients at the turn of the year. Based on the information in the letter you can check the data in the pre-completed tax return form.
The taxation of a person living abroad permanently
Pensioners living abroad are taxed the same way as the pensions of persons residing in Finland. The tax rate, deductions and tax return procedure are the same as for persons residing in Finland. The amount of withholding tax paid may be affected by nationality and a tax treaty between Finland and the country of residence.
Keva applies for tax withholding information on behalf of the pension recipient residing abroad when the pension begins.
