Taxation
The municipal tax is a flat income tax that is levied on lower income levels than state taxes, which in contrast are progressive taxes. The lowest tax of 16% is found in Kauniainen, while a 20% tax is the other extreme. Municipalities also receive funding directly from the state (valtionapu). Municipalities levy a property tax on property, which is comparatively low. It is higher for summer cottages or other property intended for leisure. Corporate tax called yhteisövero, "community tax", is also a source of income. Some functions are funded both by the municipality and the state, e.g. AMK schools.
The municipal tax, although in principle a flat tax, is affected by deductions, such that the real average tax percentage is lower than the nominal rate. Municipal taxes are collected by the state (Verohallinto) and paid to the municipalities.
Read more about this topic: Municipalities Of Finland
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