Country overview

#18
Finland

Country stats

Rating Points
339
This indicator describes the overall rating of a given jurisdiction on several parameters according to cryptocurrency operations - market volume, crypto regulation, business climate, taxation framework.
Crypto Penetration
1.4%
Estimated percentage of crypto users out of the country's total population based on public data.
Legal Entities
139
Number of crypto companies registered in the country based on regulator data if available or other types of public data.
Regulation Points
200
An overall assessment of the granularity of crypto regulation in a given country. A high score is also given to countries where cryptocurrency transactions are highly regulated.
Amount of crypto users
77 000
Total amount of crypto users out of the country's total population based on public data.
Taxation points
11
This figure, according to our analysts' calculations, indicates the overall level of tax burden for cryptocurrency transactions in a given country. The higher the indicator, the lower the burden.
Market volume points
108.4
A rough estimate of this jurisdiction's retail crypto market relative to the rest of the world. The higher the indicator, the higher the market potential.
Status of crypto
Legally allowed
General status of cryptocurrency regulation in this jurisdiction.
Crypto payments
Legally allowed
The legal status of cryptocurrency payments for goods and services in a given country based on information from regulators, public data and feedback from our community.
Security Level
Minor danger
The overall level of security in a given country based on open data.
Crypto Salaries
No info
The legal status of cryptocurrency salaries to employers in a given country based on information from regulators, public data and feedback from our community.
Business Climate
Good
Overall assessment of the friendliness of this country for crypto-business. This indicator takes into account the cost of obtaining a license and the attitude towards crypto entities in the country.
Stablecoin Regulation
Basic
This indicator is evaluating the regulation of stablecoins in a given country. Complex regulation means that it is possible to issue steiblcoins and obtain a license for this activity. Basic regulation means that the issuance of stablecoins is possible, but not all legal aspects are defined in the law. Standard regulation means that there is a legal practice of steylcoin circulation in a given country.
Bad Factors
No
This section describes the unfavorable economic factors for crypto-business in a given country. These are countries that are under sanctions or on the FATF grey list and other factors.
Types of licenses
Crypto-to-crypto
This license type allows VASP to provide legal exchange from one cryptocurrency to another.
Crypto-to-fiat
This type of license regulates the exchange from cryptocurrency to fiat.
Wallet/Custody
This country has a legal licensing procedure for companies that store cryptocurrency - - crypto wallet providers and custodians.
ICO/STO
This indicator describes legal procedures for token sales and security token issuance. This country has a clear regulation framework and licensing procedures for entities that provide this activity.
Stablecoin issuer
This indicator means that a special license/license is required to issue stablecoins in this jurisdiction, and the procedure for obtaining it is specified in the legislation.
Good
Medium
Bad
intro

Finland has had a clear crypto regulation framework for a long time. It’s famous for the crypto exchange platform Local Bitcoins, which is headquartered in the country.

Security level

Finland has a minor danger security level according to our rating. The jurisdiction has 73.5 points (from 100) for safety level in Numbeo crime rating (1). Homicide level (2) is 1,6 per 100,000 inhabitants a year. Story of firearm-related death (3) 2.41 per 100,000 inhabitants a year.

Crypto Payments

According to the VERO guide (4), it’s legally allowed to provide crypto payments in Finland. VERO is the Finnish Tax Authority.

Some businesses accept virtual currency as a means of payment. From the perspective of taxation, using virtual currency to pay for goods or services constitutes an exchange transaction based on a mutual agreement. As noted above, this is a situation where taxpayers use their units of virtual currency, and it causes a tax calculation to be made in order to determine the exact capital-gain or capital-loss amount.

Crypto Salaries

We need data about crypto salaries/wages status in the country. But, since individuals can get virtual currencies as payment for goods and services, this means that at least it’s possible to pay freelancers and provide additional rewards to employers in crypto.

Legal

According to Coinpanda (5), The Finnish Tax Administration (VERO) considered crypto as “a type of personal asset that can be traded freely on the open market”. The official definition from VERO is that cryptocurrencies are a form of digital value (6) that:

Can be used by a person to settle a liability

1. No central bank or other public authority has been the issuer, and which is not considered legal tender for payment purposes.

According to Hannesnellman's overview (7), FIN-FSA licenses crypto entities in the country based on federal law implemented in 2019. Licenses include exchange services (crypto to crypto & crypto to fiat), custodian wallets, and token sales. AML legislation is based on the Act on Bank and Payment Account Monitoring System (571/2019).

Private blockchain networks and entities that provide crypto services occasionally don’t need any license.

Quote

The Finnish Financial Supervisory Authority (the FIN-FSA) acts as the registration authority and supervisory authority for crypto-assets and related services under the Finnish Act on Virtual Currency Providers (572/2019) (Laki virtuaalivaluutan tarjoajista).” It also regulates payment services under the Act on Payment Institutions (297/2010) and asset managers by the Act on Investment Services (747/2012).

The Finnish Virtual Currency Act regulates the provision of "virtual currency services" in Finland. Under the Virtual Currency Act, "virtual currency services" are defined as: • the issue of virtual currency, • the provision of virtual currency exchange services; and • the provision of custodian wallet services. Anyone who offers any of the above virtual currency services in Finland must register with the FIN-FSA.

Companies licensed by FIN-FSA include Northcrypto (8) and Localbitcoins.

Finland also has licensed (9) EUR stablecoin provider Membrane Finance

There are 139(9¹) legal, and financial entities

Taxation
Tax nameIndex
PIT tax Max54,75%
PIT tax Min22.5%
Corporate tax (CIT)20
Min Individual CGT (for crypto)20
Max Individual CGT (for crypto)34
Wealth tax Min0
Wealth tax Max0
Mining tax 0
TDS tax 0

A detailed guide from VERO (10) that contains most cases of possible crypto taxation in the country.

PIT

PIT up to 55% for residents and 35% - nonresidents

According to the VERO guide above, you pay PIT for mining and staking income. Also, the individual gets crypto as a payment for the service. According to Coinpanda (11), there is a tax-free allowance of 19,000 EUR. The max PIT rate is 54,75%, including federal taxes between 6% and 31.25% and municipal tax rates between 16.5% and 23.5%.

And bad news for holders: You need to pay income for crypto profit before you exchange it for fiat.

CGT

CGT - 30-34% or 20% acquisition cost for crypto purchases;

Income received from spending and exchanging virtual currencies is taxed as capital gain, which is considered capital income. Taxable income is accrued when

you exchange virtual currency for euros or some other official currency

you exchange virtual currency for another virtual currency

you use virtual currency to pay invoices

you pay for goods or services with virtual currency.

According to Coinpanda (12)

Capital gains from the selling of shares, equities, or cryptocurrencies are generally included in the taxable capital income that is subject to a 30% tax rate on the amount up to €30,000, and a 34% tax rate for any amount exceeding this.

Profits from exchanging or selling cryptocurrency are considered capital income for tax purposes and are therefore taxed as Capital Gains Tax. The general rule is that each time you spend or otherwise dispose of a cryptocurrency, you need to pay Capital Gains Tax on the resulting profits.

CIT

CIT rate is (13) 20%, including CGT for entities