Employment, Estonia, EU – Baltic States, Financial Services, Legislation, Markets and Companies, Taxation
International Internet Magazine. Baltic States news & analytics
Tuesday, 03.03.2015, 22:18
Thousands Estonians pay taxes to the wrong state
The golden rule is that employers have to pay taxes for the employee to just one state – the one where a person works more.
The majority of Estonians work in Finland in construction sphere but there are also a lot of 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.
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 a part of the time in Estonia, a part in Finland. This concerns people like medical workers who have some shifts in one and some in the other state.
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.