Qestions about selling goods outsite Finland

[tam]

Hello everyone and thanks for the great info here!

I am planning to set up my own business, still haven't decided yet T:mi or Oy so I would like to here your advices for my situation.

As the purpose is to retain my status in Finland (living in Finland) but my target market is Estonina or Sweden, so:

1. Is this better if I open one company in Finland and another one in Estonia/Sweden?

2. If only one company in Finland, would anyone know about the accounting issues in this case? How I invoice my customers? As Finland is 24% tax, estonia 20% and sweden is 25%?

3. Could anyone clear me more about the fact that income below 8500 euro/year doesn't need to inform tax office? Is this the thing that I myself estimate the income or do I need to show by evidence, with whom should I talk to...

4. If I open a T:mi but do not have income, do I need to pay YEL, inform tax every month/quater...?

Please help !

Cheers, Tam

[Adrian42]

As the purpose is to retain my status in Finland (living in Finland) but my target market is Estonina or Sweden, so:

1. Is this better if I open one company in Finland and another one in Estonia/Sweden?

2. If only one company in Finland, would anyone know about the accounting issues in this case? How I invoice my customers? As Finland is 24% tax, estonia 20% and sweden is 25%?

You definitely have to talk with an accountant about such issues.

You also need to be aware of all the legal issues regarding selling goods. E.g. when selling new goods in the EU to private customers you have to give at least 2 years warranty, and when buying online the customer has the right to send the goods back to you within 2 weeks and get the money back.

3. Could anyone clear me more about the fact that income below 8500 euro/year doesn't need to inform tax office? Is this the thing that I myself estimate the income or do I need to show by evidence, with whom should I talk to...

http://www.vero.fi/en-US/Companies_and_ ... ations/VAT

If a company operates a business for which VAT is payable, requesting for VAT registration will be mandatory. However, no registration is required if turn over for the accounting period (12-month) stays below €8,500.

Note that this is only about VAT, income taxation applies in any case.

[Pursuivant]

If you compare - the Estonian Oü fares far better taxationwise - you pay.. whats it 13% corporate tax but thats only when you take anything out of there. Might be worth giving it a look.

[Adrian42]

If you compare - the Estonian Oü fares far better taxationwise - you pay.. whats it 13% corporate tax but thats only when you take anything out of there. Might be worth giving it a look.

21% (plus 33% social security tax for residents)

But since he wants to continue having his residence in Finland, he might still have to pay taxes and social security on the money he takes out of the company in Finland.

With € 8,500 turnover (not even profit) being seen as a relevant figure, the costs and efforts of setting up and maintaining multiple companies in multiple countries are likely not worth it.

[rinso]

and when buying online the customer has the right to send the goods back to you within 2 weeks and get the money back.

and you probably have to pay for the return postage.

[Adrian42]

and when buying online the customer has the right to send the goods back to you within 2 weeks and get the money back.

and you probably have to pay for the return postage.

That has to be paid by the customer (national legislations that said otherwise have to be changed in 2013).

[Pursuivant]

If you compare - the Estonian Oü fares far better taxationwise - you pay.. whats it 13% corporate tax but thats only when you take anything out of there. Might be worth giving it a look.

21% (plus 33% social security tax for residents)

But since he wants to continue having his residence in Finland, he might still have to pay taxes and social security on the money he takes out of the company in Finland.

With € 8,500 turnover (not even profit) being seen as a relevant figure, the costs and efforts of setting up and maintaining multiple companies in multiple countries are likely not worth it.

Ah they've raised it... but in Finland you pay the tax on the turnover regardless if you take the money out or not. Of course, nobody lives on thin air, so you get shafted by taxes in any case.

[Adrian42]

but in Finland you pay the tax on the turnover regardless if you take the money out or not.

On the profits, not on the turnover.

[Rosamunda]

Re: YEL. There is a minimum work-income threshold for these contributions so you don't have to contribute if your business is really small (I can't remember the exact figure but around 7K€ / year.

I pay mine once per year but you can pay it twice a year or even monthly (just means more paperwork).

There is a discount of 25% during the first four years.

YEL contributions are calculated based on your own estimation of your work income. So, if your estimated income (not profit) is ZERO then you pay zero.

If you are planning on living permanently in Finland (ie you will retire here) then YEL contributions are a no-brainer. It would be crazy to avoid them or even under-subscribe. Your pension is calculated based on what you have paid in. So if you contribute zero, you get nothing back.

But, there is an "arm's length" clause that states that your work-income for YEL purposes must be equal to or greater than the equivalent income of someone doing the same job as a salaried worker.

[Adrian42]

RIf you are planning on living permanently in Finland (ie you will retire here) then YEL contributions are a no-brainer. It would be crazy to avoid them or even under-subscribe. Your pension is calculated based on what you have paid in. So if you contribute zero, you get nothing back.

Finland has a guarantee pension, currently € 732 per month.

Even if you contributed zero you will get at least that.

[Upphew]

and you probably have to pay for the return postage.

That has to be paid by the customer (national legislations that said otherwise have to be changed in 2013).

I'd expect that nothing changes here though. Legislation, yes; way things work, no.

[Adrian42]

and you probably have to pay for the return postage.

That has to be paid by the customer (national legislations that said otherwise have to be changed in 2013).

I'd expect that nothing changes here though. Legislation, yes; way things work, no.

Companies won't voluntarily offer to pay the return postage when they are not legally required to do so (they will already have paid the postage to the customer without having sold anything in the end).

[Upphew]

Companies won't voluntarily offer to pay the return postage when they are not legally required to do so (they will already have paid the postage to the customer without having sold anything in the end).

They already have deal with itella/matkahuolto. Finnish customers expect free returns. Cost of those is already calculated in their prices. Drop the customer service level with or without prices and see how the market reacts, we'll see which mail order company is the first to try and will it move the customers away. (my guess H&M)

[cors187]

Hello everyone and thanks for the great info here!

I am planning to set up my own business, still haven't decided yet T:mi or Oy so I would like to here your advices for my situation.

As the purpose is to retain my status in Finland (living in Finland) but my target market is Estonina or Sweden, so:

1. Is this better if I open one company in Finland and another one in Estonia/Sweden?

2. If only one company in Finland, would anyone know about the accounting issues in this case? How I invoice my customers? As Finland is 24% tax, estonia 20% and sweden is 25%?

3. Could anyone clear me more about the fact that income below 8500 euro/year doesn't need to inform tax office? Is this the thing that I myself estimate the income or do I need to show by evidence, with whom should I talk to...

4. If I open a T:mi but do not have income, do I need to pay YEL, inform tax every month/quater...?

Please help !

Cheers, Tam

Its better to have a Finnish company and direct all business profits to personal income .

If you make 100k profit for the year.
Self employed business=the 100k can only be directed to personal income(progressive%Tax), or you can use some or all of it for more equipment,real estate etc etc(Tax deductible).

Company=Your start up comapny is worth 2500euro and you own some or all the shares valued at 2500e.
You can also work in the company as an employee aswell as being a share holder(immigrants standard operating procedure).

The 100k profit can be directed to you as personal income(progressive%tax), or you can use some or all of it for more equipment,real estate etc etc(Tax deductible).
You can also direct some or all of the 100k to your company(24.5%tax).
If you directed 40K of that years profits to your company, now your company worth is 30200(9800tax)+2500(startup)=32700 portfolio for shareholders.

[Rosamunda]

If you make 100k profit for the year.
Self employed business=the 100k can only be directed to personal income(progressive%Tax), or you can use some or all of it for more equipment,real estate etc etc(Tax deductible).

No, for a toiminimi (sole trader) part of the income is taxable as earned personal income (progressive tax rate) but part of it is considered as capital income. Taxation of the capital income is fixed at 20% of the net assets of the company (previous year). However the sole-trader can, if he wishes, elect to pay all the tax as personal earned income. It is a simple calculation to figure out which is the most advantageous.

The 100k profit can be directed to you as personal income(progressive%tax), or you can use some or all of it for more equipment,real estate etc etc(Tax deductible).
You can also direct some or all of the 100k to your company(24.5%tax).

Company tax will be reduced to 20% as of beginning 2014.