Freelancing and taxes

naila · Post by **naila** » Mon Jul 28, 2014 8:10 pm

Yeah, I know, many a question has been asked about this, but somehow I don't find the matching answers to my questions, so I'll ask again.
I have been a stay-at-home mum for a while (officially: unemployed) and now started working as a freelancer. I had mentioned that I was planning on doing this to the tax officials at some point earlier already and thus received a freelancer tax card for this year.
Now, how exactly do I pay my taxes? Payments come from different sources, so do I just forward all my bills and earning statements from the various clients to Vero?

I read about toiminimi and other business forms all the time, but back when I talked about the freelancing at the Vero-office, I was told I don't need to set up any kind of business if working on the freelancer tax card. So...eh? I have never had to do this kind of stuff before, so excuse me for being stupid. :/

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tjawatts · Post by **tjawatts** » Mon Jul 28, 2014 8:44 pm

What in Finland is refered to as a freelance tax card is just a tax card which is meant to be given to many different employers. That is the employer/client would pay your taxes.

If you want to act like a sole trader and invoice the clients and deduct your costs then you should register to pay prepayment taxes ("ennakkoverot"). You dont have to officially setup any company or toiminimi but you do have to register.

Remember that if you will earn more that about 8500 eur a year you will have to register for VAT and also YEL (compulsory pension).

You should keep your own accounts and report the income and expenses on the annual tax return.

Hope this helps

Tony

naila · Post by **naila** » Mon Jul 28, 2014 9:21 pm

YES, this helps a lot already, thanks!
Right now I don't have any clue yet how much I will be making but I'll just make a wild guess.

betelgeuse · Post by **betelgeuse** » Mon Jul 28, 2014 10:02 pm

If you want to invoice people, there's also the option of a service like http://www.eezy.fi/english (there are multiple like this). There are tax benefits to registering as a sole trader, for example:
http://www.vero.fi/fi-FI/Yritys_ja_yhte ... nus(11826)
However, navigating the Finnish bureaucracy is not too easy for a foreigner.

tjawatts · Post by **tjawatts** » Mon Jul 28, 2014 10:08 pm

It is ok to put a low number for the prepayment tax you just have to pay the extra next year.

But with the VAT and YEL if you hit the minimums you will have to pay it (for the full income), so if you think you will it is best to calculate your prices etc to include enough to cover those.

T

naila · Post by **naila** » Mon Jul 28, 2014 10:42 pm

Yeah, I've heard about those...but I don't make much as it is, working mainly through a freelancer market place plus some other jobs on the side. Not really willing to throw the rest of my earnings at yet another company. If there's nothing left for me, what's the working good for? So I'll just annoy the hell out of a tax official person by having them explain everything to the tiniest detail, and twice.

betelgeuse · Post by **betelgeuse** » Mon Jul 28, 2014 11:01 pm

naila wrote:Yeah, I've heard about those...but I don't make much as it is, working mainly through a freelancer market place plus some other jobs on the side. Not really willing to throw the rest of my earnings at yet another company. If there's nothing left for me, what's the working good for?

The cut of those companies is not huge. It's percentage based so if you make little, you pay little. We are talking about some percents of the sum without VAT.

naila wrote: So I'll just annoy the hell out of a tax official person by having them explain everything to the tiniest detail, and twice.

That's the spirit

Go for it!

cors187 · Post by **cors187** » Tue Jul 29, 2014 8:58 pm

but back when I talked about the freelancing at the Vero-office

Anything vero support can say to you will be backed up by documents, wheres this freelance taxcard regulations in print?

cors187 · Post by **cors187** » Tue Jul 29, 2014 9:06 pm

Not really willing to throw the rest of my earnings at yet another company.

Even if you somehow have correctly dealt with all your employers(1timers or on more occasions than once) and you havent got atleast 7% to give these guys for their bookkeeping etc then you have worse problems than ezy. It maybe that ezy actually make you more money as most discover when they offload some random obligation!

Upphew · Post by **Upphew** » Tue Jul 29, 2014 9:48 pm

naila wrote:I read about toiminimi and other business forms all the time, but back when I talked about the freelancing at the Vero-office, I was told I don't need to set up any kind of business if working on the freelancer tax card. So...eh? I have never had to do this kind of stuff before, so excuse me for being stupid. :/

Workers don't bill. They give employer their tax card and get paid wages. Companies send out bills. They also pay taxes and pay wages to their worker(s).

Rosamunda · Post by **Rosamunda** » Thu Jul 31, 2014 9:39 pm

naila wrote:Yeah, I know, many a question has been asked about this, but somehow I don't find the matching answers to my questions, so I'll ask again.
I have been a stay-at-home mum for a while (officially: unemployed) and now started working as a freelancer. I had mentioned that I was planning on doing this to the tax officials at some point earlier already and thus received a freelancer tax card for this year.
Now, how exactly do I pay my taxes? Payments come from different sources, so do I just forward all my bills and earning statements from the various clients to Vero?
I read about toiminimi and other business forms all the time, but back when I talked about the freelancing at the Vero-office, I was told I don't need to set up any kind of business if working on the freelancer tax card. So...eh? I have never had to do this kind of stuff before, so excuse me for being stupid. :/

As already stated, you give a copy of your freelance tax card to each of your employers and when they pay you at the end of the month they will deduct income tax using the rate given on that card. They will also deduct other contributions like pension and social security, as they would for any salaried employee. Basically, if you are using a freelance tax card you are working as an EMPLOYEE and you are paid a salary. The term "freelance" in this case just means that you can more than one employer.

If you are billing your clients (ie you are not their employee, you are a SUPPLIER) then you need to start up a toiminimi and register for VAT, pre-payment of taxes and social security contributions. This is much more complicated if you have never been self-employed before: many self-employed people use bookkeepers to manage the paperwork and taxes.

I think the confusion you and many others has, comes from the misconception that a Finnish freelancer tax card is used for people who are self-employed. This is NOT the case: the Freelancer tax card is for people who have multiple employers (eg EFL teachers who work for three or four different language schools simultaneously). In my opinion Vero should maybe call it something else but it's just one of those things that everyone has got used to.

betelgeuse · Post by **betelgeuse** » Thu Jul 31, 2014 9:53 pm

Rosamunda wrote: I think the confusion you and many others has, comes from the misconception that a Finnish freelancer tax card is used for people who are self-employed. This is NOT the case: the Freelancer tax card is for people who have multiple employers (eg EFL teachers who work for three or four different language schools simultaneously). In my opinion Vero should maybe call it something else but it's just one of those things that everyone has got used to.

It does fit the Merriam-Webster definition: "a person who pursues a profession without a long-term commitment to any one employer"

http://www.merriam-webster.com/dictionary/freelance

I do agree that it would be more self explanatory if they just called it "multi employer tax card" or something like that.

cors187 · Post by **cors187** » Sat Aug 02, 2014 9:50 pm

Actually "freelance" is based on the word "self ".
It ties to "sole-trader ,like a branch of a tree.

Finland has calculator rules
Normal taxcard worker must give taxcard to employer, when employment is over, the employer must give taxcard back.
Employee must offer vero a reasonable prediction on future earning (normaly based on hrs or monthly salary) so that the tax% is correct.
When the taxcard is issued it has the nominal tax%.
If you get another job i think you need to get another taxcard printout for the second employer, the next taxcard has a larger tax% compared to the first taxcard.
Theres no cutting the hrs on job 1 and doing those extra hrs on job2, the calculator doesn't have that function.
You cant work both jobs at once can you?Not according to vero. If you were cutting the hrs down on job1 to work at job2, then you need to get a new updated taxcard1, after that get the correctly adjusted taxcard2.

This freelance taxcard is just another exception in VERO world THATS full of rules with exceptions, much like the language.

Carol Anne · Post by **Carol Anne** » Mon Sep 01, 2014 4:36 pm

Can anyone recommend an english speaking accountant or service that can advise how to prepare VAT paperwork and end of the year taxes for a toiminimi? I have so many questions on what is tax deductible and what is not. What do you think I should expect to pay to the accountant? Thanks!!

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