Freelance and Tax question - complicated?

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SGaudreau
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Freelance and Tax question - complicated?

Post by SGaudreau » Tue Nov 18, 2003 8:47 pm

Folks:

I am well on my way to arriving in Helsinkin on 2 December and have a few questions.

I have lined up a free-lance teaching position with a firm in Helsinki and will be working for them on that basis.

Also, a firm I am associated with here in the States has asked me to free-lance for them while in Helsinki because of the existing raport and professional relationship over the last several years.

Now...what the hell do I do about the taxes with the US company? I am maintaining a bank acct in the states. If I have them pay my fee to my US acct, do I have to declare that to Finland?

Also, as a freelancer in Finland for the finnish firm, who is responsible for paying the tax to the gov (meaning do I pay directly or do they deduct from my pay?)?

Any advice would be greatly appreciated.

Stephanie

Freelance and Tax question - complicated?

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Hank W.
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Re: Freelance and Tax question - complicated?

Post by Hank W. » Wed Nov 19, 2003 11:28 am

SGaudreau wrote:Now...what the hell do I do about the taxes with the US company? I am maintaining a bank acct in the states. If I have them pay my fee to my US acct, do I have to declare that to Finland?


officially:
http://www.vero.fi
In Finland, resident individuals are taxed on their world-wide income. Residents are taxed according to progressive tax rates for national tax purposes and flat rates for municipal ones (including even church tax and social security payments).

I'd say:
Image
Cheers, Hank W.
sitting here like a lemon looking for a gin.


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Re: Freelance and Tax question - complicated?

Post by Guest » Wed Nov 19, 2003 12:16 pm

Hank W. wrote:I'd say:
Image



Hank, you're absolutely, indoubtedly the best! :lol: :lol:


dusty_bin
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Post by dusty_bin » Wed Nov 19, 2003 12:21 pm

The US also has worldwide taxation.

This can lead to dual taxation. IIRC there is an allowance from the US of $75k before the US taxes fall due. Some countries I think have arrangements with the US so that US citizens do ot pay dual taxes.

Methinks you need to talk to a tax accountant in the US, before you leave. You might need to investigate your options in respect of NOT being tax resident here. This will depend upon your anticipated earnings though.

I would guess that if you are a freelance teacher, all the above will be moot because you will earn below the US tax threshold anyway.


Tom and Jerry

Post by Tom and Jerry » Wed Nov 19, 2003 1:09 pm

quite complicated.

your employer cannot pay you, if you haven't find out about your taxes. Otherwise they will charge you for 50%.

One option is to go to the Finnish tax office, say that you will work for less than 6 months and get a paper that you need to pay 35% (the lähdevero). That will give you time to sort things out, until you know what the real percentage should be.

You may also go to the Finnish tax office and ask them what would be the best solution. You may find them extremely helpful to point out the best solution for you.


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Post by Hank W. » Wed Nov 19, 2003 1:16 pm

60%

and not so complicated

Taiteilijan ja freelancerin tulot
Jos henkilö saa samanaikaisesti palkkioita usealta palkkionmaksajalta, hänen kannattaa pyytää verotoimistosta ns. freelancerverokortti. Verokortissa olevaa pidätysprosenttia sovelletaan kaikkiin henkilön saamiin palkkioihin ja työkorvauksiin. Verokorttia ei tarvitse antaa alkuperäisenä palkkion maksajan säilytettäväksi, verokortin esittäminen tai valokopio riittää.
Freelancer liittää veroilmoitukseensa lomakkeen 15, jossa selvitetään freelancerina toimivan tulot ja tulon hankkimisesta aiheutuvat kustannukset. Lomakkeen täyttöohjeesta selviää mm. mitkä tulot ovat veronalaisia ja mitkä verovapaita.

Lomake 15 ja sen täyttöohje löytyvät Veroilmoituslomakkeet -sivulta.
Cheers, Hank W.
sitting here like a lemon looking for a gin.


Tom and Jerry

Post by Tom and Jerry » Wed Nov 19, 2003 1:22 pm

Dear Hank,

You can't find everything from the internet. The text doesn't mention that the tax office doesn't accept everybody as free lancer. There is a minimum of 9000 euro/year, and there are also other conditions.

Now for a foreigner coming in December, I don't know whether it is even useful to get a tax card for one month.

But, the people at the tax office will explain that to SGaudreau.


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Post by Hank W. » Wed Nov 19, 2003 1:27 pm

Tom and Jerry wrote:
The text doesn't mention that the tax office doesn't accept everybody as free lancer. There is a minimum of 9000 euro/year, and there are also other conditions.


The tax office doesn't accept. (<=period) -which is very much common knowledge. I can't get !"#¤% accepted in Vantaa. I'd expect most employers demanding of having a "toiminimi" anyways, in order to skirt the employer's fees. The outcome is the same though.

I agree on the "getting a tax card for 1 month" part. Though if there is a company that wants to have the payment go out in December, then its going to be something... 40-60% I'd guess...
Cheers, Hank W.
sitting here like a lemon looking for a gin.


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Post by brendan_uk » Wed Nov 19, 2003 1:46 pm

Some countries I think have arrangements with the US so that US citizens do not pay dual taxes.


I think the general rule is you have to pay tax somewhere aslong as you have proof that you are paying "worldwide" tax in one country then the other will usually let you off or rebate you if you are taxed at source.

If you choose to pay tax in Finland and fail to declare your US earnings in Finland then you will have no proof to show the US tax service that your US earning are being taxed and they will tax you there aswell.

If you want to be above board get a tax accountant. Suppose you could only declare each portion in each country, but its not what they ask for and I couldnt see the benefit.

You you want to go black economy then your best bet is keeping stum about one countries earnings but with registration and bank details available to the tax services (in each country) its a risky business.

For peace of mind I would declare everything "worldwide" in 1 country and pay the taxes that are due, you might have hassle getting any rebates back from the other country but it will be legit.


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Post by Dara » Wed Nov 19, 2003 1:55 pm

What about Double-Tax treaties? You should also check on them really.
As an example how it works in my country:

According to the amendments in Bulgarian TAX PROCEDURES CODE, promulgated in State Gazette No 42 of 9 May 2003, there are new requirements for application of Double Tax Treaties (DTT).

A foreign person/company with annual Bulgarian source income of above BGN 2000 may apply a DTT only after receiving a preliminary opinion from the tax authorities that there are grounds for application of the respective DTT.
The foreign person/company or his/its representative should submit a request for application of a DTT to the tax office in which the payer of the income is registered or to the Sofia Territorial Tax Directorate, if the payer is not registered for tax purposes.
Documents, evidencing the kind, the amount and the grounds on which the income is payable, should be attached to the application (e.g. in case of dividends – a decision of the general meeting of the company and a coupon for paid dividends). The foreign person/company should submit an application each time when applying a DTT in respect of Bulgarian source income. An exception to this rule is provided for income realized by a foreign person/company under ongoing contracts or realized during the respective year on one and the same grounds (except income from dividends). In these cases the application should be submitted only once before the expiry of the first deadline for payment of the due tax.

The tax authorities should reply to the request for application of a DTT within 30 days as of its submission. If there is no reply within that term, the request is deemed to be refused.


Ok, this was an explanation I had to write some months ago to one of our own free-lancers. Of course this is only how things work here in Bulgaria. But just wanted to give you an example of how things MAY work.

Dara


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Post by Hank W. » Wed Nov 19, 2003 2:29 pm

There is a tax agreement with the USA and Finland.

Tax treaty USA-Finland:
http://ftp.fedworld.gov/pub/irs-trty/finland.pdf

Don't ask me what this means in reality.
Cheers, Hank W.
sitting here like a lemon looking for a gin.


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Post by SGaudreau » Wed Nov 19, 2003 4:24 pm

Folks:

Thanks so much for the information. Have I failed to mention I HATE Tax law? I have no comprehension of the gobblygook they deem as "clear". THIS is why I always pay someone ELSE to do my taxes..grrrrrrrr...


THanks again for the help gang. I may just have to forego the free-lance position from the States due to the complex Tax issues associated with it (but I will check with a tax attorney/accountant first).

Cheers!
Stephanie


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Re: Freelance and Tax question - complicated?

Post by Caroline » Wed Nov 19, 2003 5:18 pm

SGaudreau wrote:I have lined up a free-lance teaching position with a firm in Helsinki and will be working for them on that basis.

Stephanie



Freelance teaching..... firm in Helsinki .....That sounds suspiciously like....the Kids´Club? Is it Fun Languages? For your sake I hope not. :?
Former expat in Finland, now living in New Hampshire USA.

Remembah whea ya pahked ya cah!


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SGaudreau
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Post by SGaudreau » Wed Nov 19, 2003 5:35 pm

Caroline:

Definitely not. It is a respected firm and it does Adult Language Traning for buisnesses (financial institutions etc.), IT, Customer Service instruction (although I hear that is a questionable thing in Finland ;) ),Finnish Language instruction for immigrants and the like. I started my adult-post-university life as a teacher and sort of fell into the IT thing (late 80's early 90's in MA was NOT a good time to graduate from college as a teacher and try to find work - I am sure you are aware). I was very careful in my search for work in Helsinki as a teacher. I've read some of the horror stories about the Kid's Club so I was sure to avoid that kind of thing.

Thanks so much for the concern though :)

Stephanie
*who is desperately trying to get all of her *ahem* done before she gets on that flight*


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Post by Caroline » Wed Nov 19, 2003 6:34 pm

SGaudreau wrote:Caroline:

Definitely not. It is a respected firm and it does Adult Language Traning for buisnesses (financial institutions etc.), IT, Customer Service instruction (although I hear that is a questionable thing in Finland ;) ),Finnish Language instruction for immigrants and the like. I started my adult-post-university life as a teacher and sort of fell into the IT thing (late 80's early 90's in MA was NOT a good time to graduate from college as a teacher and try to find work - I am sure you are aware). I was very careful in my search for work in Helsinki as a teacher. I've read some of the horror stories about the Kid's Club so I was sure to avoid that kind of thing.

Thanks so much for the concern though :)

Stephanie
*who is desperately trying to get all of her *ahem* done before she gets on that flight*



GOOD! :D
Former expat in Finland, now living in New Hampshire USA.

Remembah whea ya pahked ya cah!


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