New business 4K profit. Requirements for Vero, pension, etc?

Useful advice on jobs, careers and entrepreneurship in Finland. Find job postings, job information, work permits and more.
Post Reply
te14gb
Posts: 8
Joined: Tue May 23, 2017 1:52 pm

New business 4K profit. Requirements for Vero, pension, etc?

Post by te14gb » Tue May 23, 2017 2:19 pm

Hoping someone from here can help. I just spoke on the phone with VERO but the person I spoke to was all over the place, probably due to my limited Finnish and his limited English. I may go into VERO to visit to get the answers I'm looking for, but hoping some here can guide me.

I'm planning to start doing some side work just to earn some extra income - very limited just to earn myself an extra few thousand Euros a year --in the area of EUR 2,000 - EUR 4,000 annually. My business model is that I offer a service (not a physical product).

I'm here on a permanent residence and already full-time employed 37.5 hours/week earning about 70,000 EUR. I have no intention of leaving that nor do I have time to realistically earn more than a few thousand Euros a year right now doing this side business every now and then. Few questions:

--What is legally required from me here for tax purposes, pension, insurance, etc. considering the limited income I'd make?

--Am I required to go through the official business name/Toiminimi process even if I plan to earn only a couple of thousand dollars?

--I've seen some posts on here from several years past that mention that if I were to earn under EUR 8,000 annually, I wouldn't owe Vero any tax. Does this mean I wouldn't collect tax from my customers?

--When I bill clients, aren't I required to collect VAT from them and provide them with my business ID number on all invoices? This is something they're going to ask for is my business ID and tax ID, I'd assume.

--If it is mandatory, what is the cost to get myself the business name/ID and tax ID to start the process? Vero had mentioned using YTJ.fi, but it seemed so inappropriately over the top for the amount of money I'd be making from this, plus there was no clear step-by-step process or cost estimate or if it was even something that's required in my case.

In my home country, there's an option for sole proprietors in cases like this to just do so as a DBA (Doing Business As) first name last name, where I'd then report the income at the end of the calendar year with my own personal tax ID /social government number. Is there not such an option here?

As mentioned, I'm full-time employed already with 4 younger children, so this isn't about quitting my job to replace or double my income. Longer term when I have more time and my kids are grown up more, but no way in the next 5 years or so. It's about just earning a few thousand dollars (at the most) a year and trying to do so in the least bureaucratic way possible, while still doing legally and in a way that I can provide my services out there for a handful of existing companies.



New business 4K profit. Requirements for Vero, pension, etc?

Sponsor:

Finland Forum Ad-O-Matic
 

Upphew
Posts: 9962
Joined: Tue Apr 08, 2008 10:55 pm
Location: Lappeenranta

Re: New business 4K profit. Requirements for Vero, pension,

Post by Upphew » Tue May 23, 2017 4:39 pm

te14gb wrote:Hoping someone from here can help. I just spoke on the phone with VERO but the person I spoke to was all over the place, probably due to my limited Finnish and his limited English. I may go into VERO to visit to get the answers I'm looking for, but hoping some here can guide me.

I'm planning to start doing some side work just to earn some extra income - very limited just to earn myself an extra few thousand Euros a year --in the area of EUR 2,000 - EUR 4,000 annually. My business model is that I offer a service (not a physical product).

I'm here on a permanent residence and already full-time employed 37.5 hours/week earning about 70,000 EUR. I have no intention of leaving that nor do I have time to realistically earn more than a few thousand Euros a year right now doing this side business every now and then. Few questions:

--What is legally required from me here for tax purposes, pension, insurance, etc. considering the limited income I'd make?

--Am I required to go through the official business name/Toiminimi process even if I plan to earn only a couple of thousand dollars?

--I've seen some posts on here from several years past that mention that if I were to earn under EUR 8,000 annually, I wouldn't owe Vero any tax. Does this mean I wouldn't collect tax from my customers?

--When I bill clients, aren't I required to collect VAT from them and provide them with my business ID number on all invoices? This is something they're going to ask for is my business ID and tax ID, I'd assume.

--If it is mandatory, what is the cost to get myself the business name/ID and tax ID to start the process? Vero had mentioned using YTJ.fi, but it seemed so inappropriately over the top for the amount of money I'd be making from this, plus there was no clear step-by-step process or cost estimate or if it was even something that's required in my case.

In my home country, there's an option for sole proprietors in cases like this to just do so as a DBA (Doing Business As) first name last name, where I'd then report the income at the end of the calendar year with my own personal tax ID /social government number. Is there not such an option here?

As mentioned, I'm full-time employed already with 4 younger children, so this isn't about quitting my job to replace or double my income. Longer term when I have more time and my kids are grown up more, but no way in the next 5 years or so. It's about just earning a few thousand dollars (at the most) a year and trying to do so in the least bureaucratic way possible, while still doing legally and in a way that I can provide my services out there for a handful of existing companies.
2-4k might be easiest to use www.ukko.fi/en/ or like. If you start to buy stuff and/or making more money, then it might be best to set up your own business.
http://google.com http://translate.google.com http://urbandictionary.com
Visa is for visiting, Residence Permit for residing.


Rosamunda
Posts: 10624
Joined: Fri Jan 02, 2004 12:07 am

Re: New business 4K profit. Requirements for Vero, pension,

Post by Rosamunda » Tue May 23, 2017 6:00 pm

te14gb wrote:Hoping someone from here can help. I just spoke on the phone with VERO but the person I spoke to was all over the place, probably due to my limited Finnish and his limited English. I may go into VERO to visit to get the answers I'm looking for, but hoping some here can guide me.

I'm planning to start doing some side work just to earn some extra income - very limited just to earn myself an extra few thousand Euros a year --in the area of EUR 2,000 - EUR 4,000 annually. My business model is that I offer a service (not a physical product).

I'm here on a permanent residence and already full-time employed 37.5 hours/week earning about 70,000 EUR. I have no intention of leaving that nor do I have time to realistically earn more than a few thousand Euros a year right now doing this side business every now and then. Few questions:

--What is legally required from me here for tax purposes, pension, insurance, etc. considering the limited income I'd make?
As a side "hobby" with annual turnover (ie sales) under 10K€ you do not have to register for VAT, pension, insurance...
--Am I required to go through the official business name/Toiminimi process even if I plan to earn only a couple of thousand dollars?
No
--I've seen some posts on here from several years past that mention that if I were to earn under EUR 8,000 annually, I wouldn't owe Vero any tax. Does this mean I wouldn't collect tax from my customers?
The threshold is now 10,000€. That is the threshold for VAT. However, you must still declare your TOTAL INCOME to Vero for personal income taxation. So, if you sell services for 4,000€ you need to add that amount to the 70,000€ you are already earning on your tax return. You will be taxed on the whole amount.
--When I bill clients, aren't I required to collect VAT from them and provide them with my business ID number on all invoices? This is something they're going to ask for is my business ID and tax ID, I'd assume.
You can write an invoice with zero VAT - in which case you must add a note stipulating that your business is not registered due to the annual income being under the threshold (you can find the precise wording on Vero somewhere).
--If it is mandatory, what is the cost to get myself the business name/ID and tax ID to start the process? Vero had mentioned using YTJ.fi, but it seemed so inappropriately over the top for the amount of money I'd be making from this, plus there was no clear step-by-step process or cost estimate or if it was even something that's required in my case.
Not mandatory, but registering as a toiminimi is a one-off payment of 75 euro (over the top?), if you do it online. If you want to have a business ID, then you would have to take that option. https://www.ytj.fi/en/index/notificatio ... rader.html (in English, quite straightforward?) But for such a low amount of revenue (2-4K€), I'm not sure I would bother.

If you really want to register as a limited company (OY) you need to put up capital of 2500€ (this is start-up capital, not a cost). If you are not familiar with bookkeeping etc, you might need to get a bookkeeper to help you with the accounting. You would have to register for VAT and add it to your invoices and do an annual tax return etc. Overkill for your purposes.
In my home country, there's an option for sole proprietors in cases like this to just do so as a DBA (Doing Business As) first name last name, where I'd then report the income at the end of the calendar year with my own personal tax ID /social government number. Is there not such an option here?
See above. You can do this here, either as a toiminimi or without.
As mentioned, I'm full-time employed already with 4 younger children, so this isn't about quitting my job to replace or double my income. Longer term when I have more time and my kids are grown up more, but no way in the next 5 years or so. It's about just earning a few thousand dollars (at the most) a year and trying to do so in the least bureaucratic way possible, while still doing legally and in a way that I can provide my services out there for a handful of existing companies.
If you are working in a company, try asking some of your colleagues what they do. A lot of Finnish people have income from a sideline activity, hobbies etc and could give you some advice.


te14gb
Posts: 8
Joined: Tue May 23, 2017 1:52 pm

Re: New business 4K profit. Requirements for Vero, pension,

Post by te14gb » Wed May 24, 2017 10:05 pm

Thank you for clarifying all of this. Very much appreciated it, cleared up a lot of me. My thinking with the over-the-top fee was with the LLC (OY/AB), which I obviously don't need here. I was under the impression this was the only route I'd have to go. For a one-time EUR 75 fee, it's a no brainer to also lock in a business name.

I think I found the page you mentioned where it says I need to state that I won't collect the 24% sales tax from my customers here looking at part number 11: http://www.vero.fi/en-US/Precise_inform ... ces(15591). Does this mean that the buyer is exempt from paying any taxes on my services or does it just mean they're responsible for paying the tax ("reverse charge"?) to Vero themselves? I guess I'm not sure which of the statements there on that page I'd include in my invoices as to the reason there's no VAT on the invoice.

Big big help, thank you again.


User avatar
Cory
Posts: 3639
Joined: Wed Jun 18, 2003 11:51 pm
Location: Turku

Re: New business 4K profit. Requirements for Vero, pension, etc?

Post by Cory » Mon Jan 22, 2018 10:28 pm

Penny... If one chooses not to register a Tmi, because trade is below 2-4K, does one need to negotiate this with the client? Are they able to pay an invoice to an unregistered subcontractor without difficulty?
Image


betelgeuse
Posts: 2666
Joined: Thu Aug 29, 2013 1:24 am

Re: New business 4K profit. Requirements for Vero, pension, etc?

Post by betelgeuse » Mon Jan 22, 2018 11:36 pm

Cory wrote:
Mon Jan 22, 2018 10:28 pm
Penny... If one chooses not to register a Tmi, because trade is below 2-4K, does one need to negotiate this with the client? Are they able to pay an invoice to an unregistered subcontractor without difficulty?
The client does have more obligations if you are not in the prepayment register, so you will want to agree on this beforehand.

https://www.vero.fi/en/businesses-and-c ... _register/


User avatar
Cory
Posts: 3639
Joined: Wed Jun 18, 2003 11:51 pm
Location: Turku

Re: New business 4K profit. Requirements for Vero, pension, etc?

Post by Cory » Fri Jan 26, 2018 3:22 pm

betelgeuse wrote:
Mon Jan 22, 2018 11:36 pm

The client does have more obligations if you are not in the prepayment register, so you will want to agree on this beforehand.

https://www.vero.fi/en/businesses-and-c ... _register/
Thank you!
Image


Rosamunda
Posts: 10624
Joined: Fri Jan 02, 2004 12:07 am

Re: New business 4K profit. Requirements for Vero, pension, etc?

Post by Rosamunda » Fri Jan 26, 2018 11:35 pm

Yes, thanks for that link. I find the wording rather convoluted but it's just about intelligible. I wonder though, is the onus 100% on the payor? Betelgueuse, you say "you will want to agree this beforehand" but is that discussion an obligation?


tavastia
Posts: 263
Joined: Tue Mar 08, 2016 1:54 pm

Re: New business 4K profit. Requirements for Vero, pension, etc?

Post by tavastia » Sun Jan 28, 2018 9:19 pm

Just as a side comment, that small own Tmi which you plan to use to make 2-4k / year in case you get unemployed from the current job will create you a lot of issues with TE/Union/Kela, etc. You can of course close it right away but if you buy some assets on the company (to reduce your profit and taxes) you will need to sell them... and even you close it TE will ask why you close it now? and not before...
Last edited by tavastia on Mon Jan 29, 2018 7:33 am, edited 1 time in total.


betelgeuse
Posts: 2666
Joined: Thu Aug 29, 2013 1:24 am

Re: New business 4K profit. Requirements for Vero, pension, etc?

Post by betelgeuse » Sun Jan 28, 2018 10:05 pm

Rosamunda wrote:
Fri Jan 26, 2018 11:35 pm
Yes, thanks for that link. I find the wording rather convoluted but it's just about intelligible. I wonder though, is the onus 100% on the payor?
It is the duty of the payor to check the status.
Rosamunda wrote:
Fri Jan 26, 2018 11:35 pm
Betelgueuse, you say "you will want to agree this beforehand" but is that discussion an obligation?
There is no law that says you must discuss it specifically. However, it is impossible to fairly agree on a price without that discussion.


Post Reply