The 2012 tax card and deductible travel costs

Do you pay more than €600 in daily commuting costs (for your trips between home and work)? If you have reported your travel expenses for deductions in your 2012 tax card, you do not have to report them again on your tax return form for 2012.

Your own liability for travel expenses in 2012 is €600. If you pay more than €600, you are entitled to deduct up to €7,000 (or €7,600 counting the 600-euros).

Always report your total cost, do not subtract the €600 yourself.

Ticket prices valid during the tax year can be found at www.matkahuolto.fi and on the websites of some municipalities and transport companies.

For more information on ticket prices, see the following article (in Finnish):  

• Alueelliset matkakulutiedot ja seutuliput, vuosi 2012.

When you request a revised tax card, we will ask about your travel costs in a new way

Select one of the alternatives below to match your actual commuting or travel habits and situations:

A. Travel expenses to and from work 

B. Is your home located in one district and you spend weeknights in another district where your work is located?
(Tax-deductible trips for the weekend)

C. Do you work in varying locations?
(Tax deductible trips in special industries)

D. Is your workplace located in two separate districts?
(Tax-deductible trips to secondary workplace)

We recommend that you make an estimate and report your probable travel expenses during the tax year, in order to have them included as early as possible in the official calculations for your tax card (the withholding allowance certificate). 

If you have more than €600 of deductible costs, they will have an impact on your tax rate. If you have reported your estimated amounts, the Tax Administration will also include them in the pre-filled information to be shown on your 2012 Pre-Completed Tax Return Form.

Do you use public transportation?

If you are a daily commuter and use public transportation, your total costs will be based on the number of working days, the means of transportation used, and the actual prices of tickets.

• You can have a deduction based on the least expensive means of transportation.
• Public transportation is usually the least expensive means of transportation.
• Report your costs so as to reflect your actual situation and behaviour.
• Work out the total costs based on the least expensive means of transportation even if you actually used a more expensive ticket type or drove your own vehicle.
• Monthly tickets, 44-trip tickets and regional tickets are usually the least expensive (including their extension options).
• The regular workweek is 5 days, and there are usually 22 work days per month.
• Taking account of annual vacations, the number of work months is 11.
• Thus, the number of work days per year is usually 242 days.

Do you have an employer-provided commuter ticket?

If an employer-provided commuter ticket covers part of your commuting costs, you should only report the remaining part that you pay yourself.

Please note that the taxable value of an employer-provided commuter ticket is pre-filled in the Pre-Completed Tax Return. This is because of your employer's mandatory reporting requirement. For more information, see Työsuhdematkalippu (in Finnish).

Do you drive to work?

If you use your own car you can apply the kilometre cost to your tax deduction claim if:

• No public transportation is available, or  
• The one-way distance is at least 3 kilometres to walk to the nearest bus stop/station, or
• The waiting time during a round trip (including transfer wait) is at least 2 hours in total.

The applicable cost is €0.25 per kilometre for a privately owned car, and €0.20 for an employer-provided car that you can use under a limited-company-car benefit scheme (this scheme is called käyttöetu in Finnish; förmån att använda bil in Swedish).

Do you only use your car for a part of your trip to work?

Example: You drive your car to a railway station, take the train, get off and either walk or use public transportation to reach your place of work. (The distances walked must be shorter than 3 kilometres.)

• The only distance for which you can claim a deduction for driving is the distance between your house and the railway station.
• The costs of the other parts of your trip to work are deductible as based on public transportation.
• However, if no parking facility is available to park your car safely for the day, you can claim a deduction for using your car for the entire trip to work.

Please note that no deductions based on using your car are permitted in tax assessment if your reasons for driving are similar to the following rationalizations:

• It is faster to drive to work than to take the bus.
• To have my car ready for use is necessary during the day due to work-related reasons.
• Giving the children a car-ride to school or daycare is necessary before the trip to work.

Remember to give a detailed explanation for your claim. If you drive, and you either have your own privately owned car or an employer-provided car, but public transportation is also available, see Do you use public transportation? above.

If your home is in a different district from where you work (and sleep overnight) on work days, you may deduct your travel costs depending on the permanence of your work and your family circumstances.

The grounds for deducting travel expenses differ, depending on whether you have a family or do not have a family. Your family circumstances are legally defined for the purposes of taxation. Thus, for the purposes of taxation, you are considered to have a family if you are married, or if you live together with a partner with whom you have, or have had, a common child. In other cases, you are considered in taxation to be without a family, i.e. single.

If you work in another location while your family continues to live where your permanent home is, then

Report any local commuting or travel costs in the municipality where you work. Use the normal reporting rules for daily commuting, for more information, see A. Travel expenses to and from work above.

You may also deduct the trips that you make to your home in another district. The assumption is that this will occur once a week. If, however, you make this trip more frequently, please explain the trips on your tax return.  

If you can realistically use public transportation for making the weekend trips home, you will be granted a deduction based on the cost of public transportation only.

If you work in another location and you have temporary quarters there (and your family is not staying there with you)

Report any local commuting or travel costs in the municipality where you work. Use the normal reporting rules for daily commuting, for more information, see A. Travel expenses to and from work above. No deductions are offered for any weekend trips to visit your family back home.

If you work in another location on a temporary basis, and you continue to have your permanent home in the municipality where you usually live, you are entitled to tax deductions that are unaffected by your family circumstances.

Report any local commuting or travel costs as costs for the production of income. In this case, the de minimis (the €600) does not apply. Similarly, the maximum deduction (the €7,000) does not apply.

• When the temporary work assignment is ongoing,
  you can claim deductions for weekend trips to visit your family that stays in the municipality of your permanent home. For tax purposes, these trips that are usually made once a week are regarded as commuting — in other words, travel from home to work and back — and you are entitled to deduct the costs as based on the least expensive means of transportation. If you have taken this trip more frequently than once a week, complete the tax return form to give details.
  If you can realistically use public transportation for making the weekend trips home, you will be granted a deduction based on the cost of public transportation only.
• When the temporary work assignment is aborted,
  you can claim deductions for weekend trips home as costs for the production of income, as based on the means of transportation actually used.
  Examples of situations where an assignment is aborted are sickness leaves of the employee, annual vacations, weekend closures of the temporary quarters arranged by the employer.

If your employer pays you coverage for your weekend trips home, and the work assignment is ongoing, the employer must comply with their information-reporting requirement and notify the Tax Administration on these payments. Consequently, they will show on your 2012 Pre-Completed Tax Return Form as your income. You are entitled to deduct these costs (even though you did not pay them yourself) as based on the least expensive means of transportation.

It is recommended that you give the following details on your tax return: Points of departure and destinations of your work-related trips, including trip length, and the numbers of trips to every destination.

For more information, see subsection 2.10.4.2 of the following bulletin in Finnish: Verohallinnon yhtenäistämisohjeet vuodelta 2010 toimitettavaa verotusta varten.

Does your work consist of many engagements, appearances and gigs?

Are you a freelancer? Are you a musician, area representative, field mechanic, technician, chimneysweep? Or are you an artist or a professional whose work involves 'gigs' and as a result, you change locations constantly?

Do you have a place where you receive your job assignments and keep clothes, tools or materials, or a motor vehicle? If there is such a place, you are entitled to deduct your commuting costs between your permanent home and this place. This is a deduction based on the least expensive means of transportation, which will be either public transportation or your own car.

For precise information, see the above sections
Do you use public transportation? or
Do you drive to work?

However, if you travel from your permanent home to your work locations directly, you are entitled to deduct your costs that are above €620 as costs for the production of income. In the case of this deduction type (for costs for the production of income, tulonhankkimisvähennys in Finnish; avdrag för inkomstens förvärvande in Swedish) the tax authorities automatically grant a €620-deduction to all wage earners. Similarly, the maximum travel-costs deduction (the €7,000) does not apply.

Please note that special tax rules apply to work assignments within the building, construction, installation, forestry and earthmoving industries.

For more information, see subsection 2.10.4.2 of the following bulletin in Finnish: Verohallinnon yhtenäistämisohjeet vuodelta 2010 toimitettavaa verotusta varten.

Secondary places of work refer to locations — additional to the primary place of work — where wage earners are performing work from time to time on a regular basis. To coincide with the definition, secondary places of work must be far enough away (in another district) from the primary place of work.

For more information, see sub-heading 4 of Matkakustannukset verotuksessa – ohje palkansaajalle (in Finnish).

Travel expenses - student taxpayers, unemployed taxpayers

Have you been unemployed during the tax year?

Report your work-related travel in the usual way, write the full amount, and do not subtract any de minimis. For more information on this rule, see above.

In order to compensate for the period that you have been unemployed, the tax assessment calculation will reduce the de minimis amount. While the usual de minimis equals €600, the de minimis for an unemployed taxpayer is €110 to €600, as a pro-rata value reflecting the months of unemployment.

Thus, the Tax Administration performs the assessment with a de minimis reduced by €55 per each full month of unemployment (21.5 days) with unemployment allowance received.

Please note that no tax deductions are offered for any trips you make for purposes of securing your unemployment allowance, and also for purposes of searching jobs and going to job interviews.

Have you been in labour market training?

Training arranged by a public employment office involves payment of a maintenance allowance (ylläpitokorvaus in Finnish, amounting to €9 per day) of which 50% is considered a travel allowance portion.

Are you a student?

Travelling between your family home and the municipality where you are a student does not qualify for tax deductions, because it is not directly connected with the production of income.

However, you are entitled to tax deductions for commuting costs if they are related to summertime employment or student jobs that you may have during the term. If you have a traineeship or a work-study program, you are entitled to tax deductions for commuting costs if you are paid. If you are not paid, you cannot claim a deduction.

Report your costs if they reach above the de minimis amount of €600. Report the total cost, do not subtract the €600 yourself. The Tax Administration will perform the necessary calculations for you.

What is the impact of these costs on your final tax assessment?

Your deductions for travel or commuting affect your gross income. So, they indirectly also affect your tax. Your earned taxable income that serves as the base of your tax is made smaller, taking into account that there is a de minimis (the €600) that you must reach.

Individual taxpayers' withholding rates are based on calculations that include:

• The rate of the progressive scale of State income tax;  
• The municipal tax rate depending on the town, city or rural area where you live;
• Church tax rate (if you are a member of the churches that collect tax)
• Healthcare contribution payments.

The tax deduction that you get for travel costs is reflected in your withholding rate. You receive a benefit in the form of a lower withholding rate.

The withholding rate printed on your tax card should be a close approximation of your final personal tax rate. For more information, the Tax Rate Calculator is available on our website.