Daily allowances for a TMI

[Cipo]

HI guys

I was pondering on the subject. Let's say I start my own TMI in Finland and I get to work on some project which forces me to stay abroad for a long time (outside EU).
I should be entitled to claim from my TMI the daily allowances which will also not be (personally) taxed.
What that will means from the TMI P.O.V. ? Can I have those as cost for the company ? Meaning I will not need to pay company tax on those cos I will be entitle to deduct them from the total annual company income ?
Does it make sense ?
thx

[rinso]

My first impression was; "it's a tax evasion scheme".
There are of course possibilities, but I suspect that the tax office will view your declarations under a microscope.

[MikeD]

You don't pay company tax at all if you have a tmi, all profits are personal income. You can claim daily allowances (päiväraha) when you file your tax form, they're not entered into the company bookkeeping at all (that is, unless you pay them to someone other than yourself). However, if you're spending a long enough time abroad you cannot claim them at all, since you'd essentially be living there.

[Cipo]

Thanks Mike ! Good point. ACtually for this project I might be abroad for more than 6 months (coming back only 1-2 times for few days).
But still the my TMI will invoice the work and I guess I should be entitled to get the allowances which shuldn't be taxed.
No worries about taxman checking my data cos it will be all clear, proofed (no evasion scheme here) and black on white.

[Rosamunda]

If I remember correctly the Per Diem allowances for assignments in foreign countries are different to those in Finland. I think there is a country-by-country list somewhere on Vero.

The best people to answer these kind of questions are Vero. They have all the answers and, personally, I have always received good practical advice from them.

[tjawatts]

I read this that you cant claim if you are away for several months, I think they would classify that as a regular place of work. Of course you can deduct relevant expenses.

http://vero.fi/nc/doc/download.asp?id=3812;139113

T

Nevertheless, travelling or commuting between home and regular place of work is not considered a
'business trip' or 'travelling in business'. This also concerns weekend travel or other similar travel
between home and a temporary place of employment, during a longer work assignment spanning several
work weeks.

[Rosamunda]

There might also be "rules" in the country where you will be working. Some countries will not allow you to stay more than XXX days/weeks without registering as a temporary residant. And some countries don't allow you to line up consecutive stays.

You should check your health insurance cover - I don't know if you can get a European Health card (if you are going to work in Europe) as soon as you get your TMI.

[Cipo]

Thanks for the answers. I will be going mostly outside EU.
Tomorrow I will also check with IF about a total insurance which would cover me as self employed/TMI too.
For the maximum amount of daily allowances I might need to call vero and as directly.
thx

[inkku]

[repeating the link]....

[Rosamunda]

Thanks for the answers. I will be going mostly outside EU.

...in which case you will more than likely be restricted in the length of your assignment according to local regulations. You will most likely need a work permit if the assignment lasts more than 3 months though this might be even less in some countries.

Certainly for salaried employees it is quite common for people to work abroad for many weeks in a year and their "per diem" allowances make up a considerable proportion of their income. I don't see why it would be any different for a TMI. But best to check with the experts.

[Cipo]

I went to "intofinland" and they gave me really great support: very competent people there, great service !
It came out that as a TMI I cannot pay any daily allowances. My situation looked pretty tricky for them and I will need to contact also the tax office in the hosting country.
All the rest is more or less clear. One step ahead
thx4help

[Rosamunda]

Have you thought about setting up a limited company? The capital requirement is 2500 euro. So not HUGE.

[girrll]

Have you thought about setting up a limited company? The capital requirement is 2500 euro. So not HUGE.

And you can use the 2500EUR right away. You can even use it to pay the 350EUR (or so) needed for actually registering the company.

Regarding daily allowance:
In some countries in the EU (Finland included) you can pay an employee daily allowance for quite a long time, but it becomes taxable after a certain period. In Finland, the limit is 2 years - if you work in Finland for more than two years and you are employed by a foreign company that pays you daily allowance, you have to start paying taxes in Finland on the daily allowance. Of course, the rules in the home country apply as well. But the periods are quite long (around 1-2 years) anyway.

[Cipo]

Yeah, I started to think about OY but probably I will wait a while. First will start the TMI and later on will see how things will move on and decide if to move to an OY.
It also depends on how much time I have before starting to travel .....

[Cipo]

Hi

I did open the TMI and it is confirmed that you cannot pay daily allowances in a TMI. Now trying to find a ccountant/tax service company.
thx