Foreign dividend taxation in Finland

General information, not tax advice. Verify your own situation or consult a professional.

Finnish residents are taxed on worldwide dividends

If you are a Finnish tax resident, you pay Finnish tax on all your dividends regardless of where the paying company is located. Dividends are capital income: the rate is 30% on capital income up to 30,000 euros per year and 34% on the part above that.

For dividends from Finnish listed companies (typically nominee-registered, listed shares) 85% is taxable and 15% is tax-free. This relief does not apply to foreign dividends in the same way, so keep the two cases separate.

Withholding tax — the source country takes its cut first

A foreign dividend rarely reaches your account in full. The source country levies its own tax — the withholding tax — before the money moves. A tax treaty between Finland and the source country usually caps that rate at a reasonable level, very often 15%.

US shares carry an important detail: the default withholding rate is 30%, but by filing a W-8BEN form with your broker you get the treaty rate of 15%. Interactive Brokers requests the form when you open the account, so for most Finnish investors US dividends are already withheld at 15%.

The credit only reaches the treaty rate

Finland does not tax the same dividend twice: tax paid abroad is credited against your Finnish tax. There is a crucial limit, though — the credit is granted only up to the treaty rate, typically 15%.

If the source country withheld more than the treaty allows, the excess is not credited in Finland. It has to be reclaimed from the source country's tax authority with a separate refund application. In practice, over-withheld tax easily becomes a loss for the investor if you don't know to claim it back.

Worked example: a US dividend

Suppose you receive a gross dividend of 100 dollars on a US share, with a valid W-8BEN on file:

• Gross dividend 100 USD, withholding 15% = 15 USD taken at source. You receive 85 USD.
• Both amounts are converted to euros at the ECB rate on the payment date. At a rate of 1.10, for example, the gross is about 90.91 EUR and the withholding about 13.64 EUR.
• In Finland the dividend is taxed as capital income: at 30% the tax is about 27.27 EUR.
• The foreign 15% withholding (about 13.64 EUR) is credited in full because it does not exceed the treaty cap. About 13.63 EUR remains payable to Finland.

Had the withholding been 30% without a W-8BEN, only the 15% share would be credited and the remaining 15% would have to be reclaimed from the United States.

How to report it in MyTax (OmaVero)

You always report the gross dividend plus the tax withheld in the source country — not the net amount. Figures in euros at the payment-date rate. The Tax Administration calculates the foreign tax credit within the treaty cap, so the correct gross figure and the correct withholding amount are the heart of the report.

How PnlTrack does it for you

• Imports IB dividends automatically and separates the gross dividend from the withheld tax
• Applies the treaty cap: shows the creditable part and any excess that must be reclaimed from the source country
• Converts every item to euros at the correct payment-date ECB rate
• Produces ready MyTax figures — gross dividend and foreign tax by country

At a glance you see how much of the tax is actually credited and how much money is sitting abroad waiting for a refund.

General information, not tax advice. Verify your own situation or consult a professional.