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Thousands accidentally pay taxes to Finland

  • 2014-02-20
  • From wire reports, TALLINN

Thousands of people who work both in Estonia and Finland pay social insurance taxes to both states. This can cause problems in payment of state benefits, reports Public Broadcasting.

The golden rule is that employers have to pay taxes for an employee to just one state – the one where a person works more, reports LETA.

The majority of Estonians who work in Finland work in construction, but there are also many medical workers and customer service staff. According to Finnish data, around 57,000 Estonians have accumulated pensions in Finland. These people may not receive the pensions and compensations if social tax has been paid for them at the same time in Estonia too.

The Finnish Pension Board international affairs specialist Marjaana Lundqvist said that according to European Union laws, a person can have social insurance only in one state. "This is the main rule and has to be fulfilled. If a person works and pays taxes in two states, then it has to be determined which country is the right one. This has to be ascertained even after the fact."

Many Estonians work partly in Estonia, and partly in Finland. The issue concerns people like medical workers who have shifts in one country and some in the other.

An employee has to ascertain which country's social insurance he benefits from before starting to work.

According to Finnish data, hundreds of double insurance situations are currently under investigation.