Tax on freelance extra income ?

[GmoDelft]

hello,

I am doing permanent job here in helsinki. But sometimes i do some freelance work which is irregular and i get around 100 to 500 euro on my paypal account for those work like make tutorial video on software learning, etc . Does this need to be tell to the tax office ? If I dont declare , is it problem ? When i receive payment on paypal there are already 5% transaction fee taken as per eu rule. Just want to know that will not be an issue in future.

Thanks much.

[Rosamunda]

It is taxable personal income and you need yo declare it.

[betelgeuse]

I am doing permanent job here in helsinki. But sometimes i do some freelance work which is irregular and i get around 100 to 500 euro on my paypal account for those work like make tutorial video on software learning, etc . Does this need to be tell to the tax office ? If I dont declare , is it problem ? When i receive payment on paypal there are already 5% transaction fee taken as per eu rule. Just want to know that will not be an issue in future.

What EU rule is this? Are you sure it's not a paypal cost? Any way in Finland you declare anything that is not explicitly exempt and the list of exemptions is quite short (includes things like non professional berry picking). Otherwise you are committing tax fraud.

[Piet]

I am doing permanent job here in helsinki. But sometimes i do some freelance work which is irregular and i get around 100 to 500 euro on my paypal account for those work like make tutorial video on software learning, etc . Does this need to be tell to the tax office ? If I dont declare , is it problem ? When i receive payment on paypal there are already 5% transaction fee taken as per eu rule. Just want to know that will not be an issue in future.

What EU rule is this? Are you sure it's not a paypal cost? Any way in Finland you declare anything that is not explicitly exempt and the list of exemptions is quite short (includes things like non professional berry picking). Otherwise you are committing tax fraud.

I have to agree on that,.. however when these "earnings" are not structural and below a certain amount, no tax payment is required (like selling stuff on tori(.)fi) but you should definitely check with the tax office what criteria must be met in that case....

[betelgeuse]

I have to agree on that,.. however when these "earnings" are not structural and below a certain amount, no tax payment is required (like selling stuff on tori(.)fi) but you should definitely check with the tax office what criteria must be met in that case....

There is no minimum. Everything must be declared. However, they they are unlikely to give you a hard time for a couple euros. Selling used things on tori.fi would not result in taxable income because most likely you are selling the items at a loss in comparison to the purchase price.

http://pellavasydanjamervi.blogspot.fi/ ... veroa.html

[Rosamunda]

...unless you are selling e.g. handicrafts or new, imported stuff on tori in which case it is definitely taxable income.

Everything must be declared. I used to get a nominal sum of money for attending school governors meetings at my kids' school. That was also taxable income. Gifts, royalties, revenue from advertising etc are all taxable income.

If this revenue is not a regular source of income and is below 8500 e/12-mth period, there is no need to register for VAT and you do not have to create a business for yourself (eg a toiminimi or an Oy), but you still have to declare it as personal income.

[Piet]

I guess when all money you get is seen as income, you can deduct from the money you get first all the costs you made to create that money, i.e. buying a camera, buying a computer, travel expenses etc..

But it seems that mister tax, did a good job closing all loopholes...(I know some countries that could learn from this..) that's why I said, you gotta check with the tax office for the exact rules of the game...

I guess in above example if the OP did not create it himself but only sold it as second hand goods, there would be no problem... so if he creates it himself and gives it for free to his friend and this friend sells it and they go to a bar 4 times a month, both drink free and the only tax you pay is VAT and alcohol TAX

[Tiwaz]

I guess when all money you get is seen as income, you can deduct from the money you get first all the costs you made to create that money, i.e. buying a camera, buying a computer, travel expenses etc..

But it seems that mister tax, did a good job closing all loopholes...(I know some countries that could learn from this..) that's why I said, you gotta check with the tax office for the exact rules of the game...

I guess in above example if the OP did not create it himself but only sold it as second hand goods, there would be no problem... so if he creates it himself and gives it for free to his friend and this friend sells it and they go to a bar 4 times a month, both drink free and the only tax you pay is VAT and alcohol TAX

Except you cannot deduct all costs at full unless device is purchase mainly to obtain considerable side income. If you have use for it in obtaining side income you can deduct 50% of it's value in 25% annual portions unless purchase price is below 1000 euros.

2000 euro computer = 500 euro deduction on first year -50% if not used mainly for significant income. Next year you have 1500 euros from which you can deduct 25% which you again have to divide by two and so forth.

[betelgeuse]

I guess in above example if the OP did not create it himself but only sold it as second hand goods, there would be no problem... so if he creates it himself and gives it for free to his friend and this friend sells it and they go to a bar 4 times a month, both drink free and the only tax you pay is VAT and alcohol TAX

There's no exception for second hand goods. If you make a profit, you declare it. Your scheme is not legal, just hard to detect. It's not a gift, if you are getting something in return. In the example, you are being paid in beer for the goods.

[Tiwaz]

I guess in above example if the OP did not create it himself but only sold it as second hand goods, there would be no problem... so if he creates it himself and gives it for free to his friend and this friend sells it and they go to a bar 4 times a month, both drink free and the only tax you pay is VAT and alcohol TAX

There's no exception for second hand goods. If you make a profit, you declare it. Your scheme is not legal, just hard to detect. It's not a gift, if you are getting something in return. In the example, you are being paid in beer for the goods.

Correct. Helping someone do something can be taxable income too. You are considered to have received the benefit of their work as income/gift.

[Rosamunda]

There are special (VAT) rules for trading in secondhand goods called the secondhand goods margin scheme. The tax rules depend on whether the goods are bought from a VAT-registered entity or a private person and are quite complex. For example, UFF and FIDA sell goods with a reduced rate of VAT (they pay nothing for the goods they collect, however they incur logistics costs) but as far as I remember the VAT is not shown on the sales receipts (and cannot be deducted for B2B transactions).

It is quite complicated. But - at the end of the day - it is incorrect to assume that secondhand goods trading is tax-free.

[Piet]

I guess in above example if the OP did not create it himself but only sold it as second hand goods, there would be no problem... so if he creates it himself and gives it for free to his friend and this friend sells it and they go to a bar 4 times a month, both drink free and the only tax you pay is VAT and alcohol TAX

There's no exception for second hand goods. If you make a profit, you declare it. Your scheme is not legal, just hard to detect. It's not a gift, if you are getting something in return. In the example, you are being paid in beer for the goods.

Correct. Helping someone do something can be taxable income too. You are considered to have received the benefit of their work as income/gift.

So if I do the laundry for the crippled neighbour and it takes me 2 hours, he has to pay tax over that???
What about voluntary workers doing work for free?
So the gifts the church gives to the homeless are taxable too? or are churches exempt from taxes?
So even helping out other people is taxed in Finland? No wonder why Finns are so grumpy greedy selfish people.

So what about me finding an old LCD screen in the trash, I repair it my self so I have received benefit of my own work, I have to pay income tax over the added value of the first broken and now working LCD screen???

[betelgeuse]

Correct. Helping someone do something can be taxable income too. You are considered to have received the benefit of their work as income/gift.

So if I do the laundry for the crippled neighbour and it takes me 2 hours, he has to pay tax over that???
What about voluntary workers doing work for free?
So the gifts the church gives to the homeless are taxable too? or are churches exempt from taxes?
So even helping out other people is taxed in Finland? No wonder why Finns are so grumpy greedy selfish people.

The quote form Tiwaz is misleading. For it to be taxable you must get something in return (for example the other person doing something of for you). The tax authority instructions are here:

https://www.vero.fi/fi-FI/Syventavat_ve ... naa(29568)

So what about me finding an old LCD screen in the trash, I repair it my self so I have received benefit of my own work, I have to pay income tax over the added value of the first broken and now working LCD screen???

You do not.

[Piet]

The quote form Tiwaz is misleading. For it to be taxable you must get something in return (for example the other person doing something of for you). The tax authority instructions are here:

https://www.vero.fi/fi-FI/Syventavat_ve ... naa(29568)

So what about me finding an old LCD screen in the trash, I repair it my self so I have received benefit of my own work, I have to pay income tax over the added value of the first broken and now working LCD screen???

You do not.

Ok that is clear so far, but what if I help my neighbour to move, and in return he helps me to move? if I read your comment correctly, this would be for both of us considered taxable income?

Or a little different situation, I repair a TV for my neighbour (his TV) and in return he repairs an antique wooden chair for me (my chair).

(I have had all situations in real life so these are examples from daily life)

Forgive me, my tax-law related Finnish language skills are not that good, actually my Finnish partner thinks it is Hebrew and understand even less from it than me

The result would be that if I help others when they help me, we both have to pay Tax... another explanation why Finns are so selfish and greedy.. if they are not, they get punished by the Tax-laws.....which were made by the ones most Finns voted for...

[betelgeuse]

Ok that is clear so far, but what if I help my neighbour to move, and in return he helps me to move? if I read your comment correctly, this would be for both of us considered taxable income?

See 5.1.2 in the guide. You would need to check with the tax people whether it qualifies as "ordinary and low in value". Possibly not since when bought commercially it is relatively costly. Personally I don't require my friends to help me in return so taxation is not an issue and usually the moves are quite temporally apart any way.

Or a little different situation, I repair a TV for my neighbour (his TV) and in return he repairs an antique wooden chair for me (my chair).

Quite special/skilled work so possibly.