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Rounding of the public broadcasting tax a problem for those on low incomes

Deputy-Ombudsman Sakslin criticises the Finnish Tax Administration

Deputy Ombudsman Maija Sakslin finds it inappropriate that persons on the lowest incomes must wait for a refund of the public broadcasting tax collected in excess until tax refunds are due.
- The lower your income, the more significant the financial impact of the tax.

According to Sakslin, especially in situations such as these the tax should primarily be withheld on the grounds laid down in the act.

Public broadcasting tax at 0.68 % is also withheld from low incomes that otherwise are not taxable. As the withholding rate is calculated at the accuracy of one half of a percentage point, it is rounded up to 1.0 %. Any tax paid in excess is only refunded a year later.

Sakslin also criticises the Finnish Tax Administration for the fact that its instructions concerning the public broadcasting tax do not explain how taxpayers can avoid the excess tax collected as a result of the rounding rule.

The Deputy-Ombudsman requests the Tax Administration to report on actions taken in response to her decision by 29 August 2014.

In early 2013, the Office of the Parliamentary Ombudsman received numerous complaints criticising the public broadcasting tax.

Tax also collected from citizens living abroad

Some of the complaints concerned the liability of Finnish citizens living abroad to pay public broadcasting tax.

Sakslin did not see this as illegal, as according to the Finnish Tax Administration's modified interpretation, the public broadcasting tax now is a tax referred to in income tax treaties. Consequently, it is taken into account as a tax from which taxes paid abroad can be deducted.

However, Sakslin considered the so-called three-year rule of the Income Tax Act questionable in terms of the principle of equality and prohibition of discrimination in the Constitution.

According to this rule, a Finnish citizen is deemed to be living in Finland until three years have elapsed from the end of the year in which he or she left the country.

- When this rule is only applied to Finnish citizens moving out of the country, it is problematic as reverse discrimination, says Sakslin.

The full text of Deputy-Ombudsman Sakslin's decision no 76 and 165/4/13 and no 58, 238, 313, 826/4/13 was published on the Parliamentary Ombudsman's website at, (in Finnish).