Registering as a full time freelance - Confusion

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abraraamer
Posts: 2
Joined: Mon Jul 23, 2018 2:27 pm

Registering as a full time freelance - Confusion

Post by abraraamer » Mon Jul 23, 2018 2:38 pm

Hello everyone,

I have full time freelance work from an online job portal so technically I don't have my own clients as these are just random people from over the internet and mostly from USA and Canada.

I had been living in Finland prior to my freelance work as a student and since I started to freelance I have been paying advance taxes. I noticed that everyone was confused about my work situation as I didn't have my own registered business nor a dedicated employer. Seeing that I registered a toiminimi since I never saw an option to register as a freelance.

I would like to know if there is such a thing as a full time freelance work which would be different than a toimini without having to do a lot of book keeping?



Registering as a full time freelance - Confusion

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betelgeuse
Posts: 4350
Joined: Thu Aug 29, 2013 1:24 am

Re: Registering as a full time freelance - Confusion

Post by betelgeuse » Tue Jul 24, 2018 10:18 am

abraraamer wrote:
Mon Jul 23, 2018 2:38 pm
I would like to know if there is such a thing as a full time freelance work which would be different than a toimini without having to do a lot of book keeping?
There is not with your definition. In Finland freelancing is defined as working for multiple employers with a special tax card. This means the client has to take care of all the employment bureaucracy.

Badger_Lady
Posts: 7
Joined: Tue Jun 27, 2017 3:32 am

Re: Registering as a full time freelance - Confusion

Post by Badger_Lady » Fri Jul 27, 2018 3:59 pm

OK, now I'm confused :-(

I'm currently transitioning from employed to 'entrepreneur'. My current employer will become one of my clients, as there's a lot of work they'd like me to continue doing for them.

But my work is very international, so there's a good chance I'll also have clients in the UK, Australia and in African countries... which should be fine, right? I do the work, they wire me the money, I record it and pay my taxes accordingly..?

Please don't say that my clients will have some kind of administrative burden, just because I choose to live in Finland :shock:

Rosamunda
Posts: 10650
Joined: Fri Jan 02, 2004 12:07 am

Re: Registering as a full time freelance - Confusion

Post by Rosamunda » Sat Jul 28, 2018 8:34 am

No. You misunderstood the previous post.

The term "freelancer" in Finland refers to someone who is employed simultaneously by several employers. There is a special tax card for this. The employers treat "freelancers" like any other employee. They deduct all the tax and social security contributions from the salary and give the employee a salary slip.

The term "toiminimi" in Finland refers to someone who is self-employed. The person has their own clients and invoices them for the services provided in a B2B or B2C relationship. The provider (toiminimi) does their own paperwork: invoicing, tax declarations, social security contributions etc.

(You are going to work as a "toiminimi" not as a "freelancer" according to the Finnish definitions. )

Rosamunda
Posts: 10650
Joined: Fri Jan 02, 2004 12:07 am

Re: Registering as a full time freelance - Confusion

Post by Rosamunda » Sat Jul 28, 2018 8:47 am

Have you looked at Eezy
https://www.eezy.fi/en/

They can do the paperwork for you but obviously they take a percentage.
Alternatively, you could hire a bookkeeper.

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Kössi K
Posts: 110
Joined: Wed Jan 14, 2015 7:06 pm

Re: Registering as a full time freelance - Confusion

Post by Kössi K » Wed Aug 08, 2018 7:23 pm

Badger_Lady wrote:
Fri Jul 27, 2018 3:59 pm
OK, now I'm confused :-(

I'm currently transitioning from employed to 'entrepreneur'. My current employer will become one of my clients, as there's a lot of work they'd like me to continue doing for them.

But my work is very international, so there's a good chance I'll also have clients in the UK, Australia and in African countries... which should be fine, right? I do the work, they wire me the money, I record it and pay my taxes accordingly..?

Please don't say that my clients will have some kind of administrative burden, just because I choose to live in Finland :shock:
HI. You as an entrepreneur can also work as 'toiminimi' ('Business operator and self-employed person'). You can look up quite a bit of info about all that in vero.fi site, they also have good pages in English. Here's a good starting point: https://www.vero.fi/en/businesses-and-c ... _business/

International clients are not a problem at all. As you said, they'll transfer you the money, and you just pay your taxes here in Finland.
You'll need to register at Vero, and you'll get a business ID number, so you can start invoicing and paying taxes (yay). One of the easiest formats imho is toiminimi, with simpler bookkeeping etc. And register in the Ennakkoperintärekisteri, Prepayment Register, so you can start billing and companies don't need to withhold tax for you but you pay it yourself. (Also many client companies may require that you're in that register, so they don't have to deal with those extra tax calculations etc.) Check out more in that above like, re: Tax admin's registers.

Just remember, if you go for VAT registration (alv-velvollinen) if you are VAT liable, i.e. income is over 10K/year, (and you can still register for VAT liability voluntarily with less income, too. I'd recommend it, so you can deduct the VATs of all kinds of office costs from supplies to devices), but then you also need to file VAT reports regularly, regarding your Finnish and all customers abroad (you can set the reporting periods from a few options, like eveyr month, every quarter, once a year), now handled nicely online.
Also, if you have EU customers, you must file VAT EU Recapitulative Statement (for selling goods and services in the EU) for what you've charged each client individually, every month (by the 20th), also handily done online in the OmaVero (MyTax) service, they have a handy form for it. For this, you need to find out your EU clients' VAT ID numbers. And urgh, alwaysalways verify new clients' validity through the VIES service http://ec.europa.eu/taxation_customs/vies/ , or there's trouble for you if they haven't been properly listed in their countries, and you may end up paying for some extra VATs, while otherwise within EU that is 'intra-community supply of goods and/or services' and no vat added.

That link will provide a whole lot of useful info, and you can always call your local tax office or go visit, if you have questions. Starting out, it might seem like a whole lot to do and find out, but it will get easier. :)
Joha mie sanoi, vaikken mittää virkkant.

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Kössi K
Posts: 110
Joined: Wed Jan 14, 2015 7:06 pm

Re: Registering as a full time freelance - Confusion

Post by Kössi K » Wed Aug 08, 2018 7:41 pm

Badger_lady:
OH yes, I forgot: more about what Rosamunda said: the social security contributions. As an entrepreneur, and if your income is over approx. 7650 e (this year, it varies) you must apply for YEL insurance contributions. It is mandatory, but you can somewhat control how much you pay (for higher possible sick-leave pay from Kela, or for higher pension), but there's a minimum percentage of that minimum income.
However, it is tax deductable, and as a first-timer you get 22% off the payments for the first 4 years.
See Ilmarinen for example, for more info: https://www.ilmarinen.fi/en/self-employ ... ributions/
Joha mie sanoi, vaikken mittää virkkant.

MC Deli
Posts: 162
Joined: Thu Nov 08, 2007 4:10 pm
Location: Helsinki

Re: Registering as a full time freelance - Confusion

Post by MC Deli » Fri Aug 24, 2018 10:44 am

Just to throw in, I have been registered TMI for over 5 years.

To give you an idea of the costs I face:
- I am registered close to lowest level for insurance contributions but I pay @2200 a year to Ilmarinen
- Union fees add another @150
- If your GROSS turnover is between 30-100k annually you will have to make quarterly ALV returns (you can avoid this in year one by giving a low estimate)
- It has cost me 600-700 for a bookkeeper when I have made annual ALV returns - but jumps to 1800 a year for quarterly :( Good bookkeeper though is useful for e.g. amortisation of existing work assets, like your old laptop etc etc. This stuff pays for itself in the first 1-2 years and I don't know if there's an online service that can handle that without extra time/money.

I have not used an invoicing service as I only make 20-30 invoices per year.
I have no suppliers, no sub contractors and only @200 expense items every year - so it would make a lot of sense if I could use an online bookkeeping service if it could cut the bookkeeping costs.


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