Value-added tax (VAT)
Finland is a member of the EU and the same international VAT legislation is applied as in the other EU countries.
The standard VAT rate is 24%. This rate also applies to record sales.
Music performance fees are VAT free. It is also VAT free for agencies to sell performances to promoters or other agencies.
The transferring of copyrighted artistic material (like recordings) between parties is also VAT free, as well as payments for use of copyrighted material to the copyright holder. However, if such payments are made to an organisation representing the copyright holder, they will be eligible for VAT (10%).
Importing goods and services
There are separate rules for fixed establishments in Finland and foreign businesses. If you stay less than six months in Finland your business is considered as ‘foreign’.
Foreigners who conduct business through a fixed establishment in Finland are VAT liable in Finland and entered in the VAT register, just as a Finnish business would be.
When the seller is a foreign business with no fixed establishment in Finland and has not applied for VAT registration in Finland, it is the Finnish buyers of goods and services who are liable to pay and report the VAT (reverse charge). The threshold for VAT liability is €8,500 – although this is not applicable to foreigners with no fixed establishment in Finland.
Reverse charge procedures for VAT are not applicable in the following situations. Instead, the foreign seller always has to register for VAT in Finland if:
1. The buyer is a foreigner (i.e. not from Finland) with no fixed establishment and no VAT registration in Finland.
2. The buyer is a private individual.
3. Sales of goods from another EU member state are taking place to private individuals in Finland.
4. The services being sold involve entrance permission granted to a business to attend cultural events, fair or exhibitions or other similar activities; as well as services related directly to the entrance, provided the event is carried out in Finland.
5. The services being sold involve: consumer services related to cultural events, fairs and exhibitions, or other similar activities, as well as organisation of these events; provided the activity is carried out in Finland.
If a foreign business has no tax domicile and no fixed establishment in any EU country, then they need tohave a representative approved by Finnish Tax Administration to qualify for VAT liability. The representative should be domiciled in Finland and prepared to take care of the administrative obligations regarding VAT on behalf of the foreign business.
Income tax for foreign artists
Any artist who is paid to perform in Finland is eligible for income tax. The tax rate is 15% and is charged regardless whether the payment is made as a salary or as another kind of payment. Even if the payment is made to a foreign agency the tax is still charged.
The 15% income tax for foreign artists is not deductible. However, it is possible to apply for tax-free refunds from an employer for verified costs for travelling and accommodation.
If you have only been performing and already paid the artist income tax then you do not need to file your taxes in Finland. In this case you are entitled to a certificate by your employer, showing that you have paid your taxes. The certificate can be useful when you want to avoid double taxation when returning to your home country.
It is recommended that you check best practices with your accountant.
Useful and practical tax information about taxation of Nordic citizens in all Nordic languages can be found on Nordisk eTax.
Sources and additional information (in English, Finnish and Swedish):
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