Has being an entrepreneur become easier?

The Tax Administration has once again updated their guidelines on the difference between wage income and entrepreneurial wage.  This makes entrepreneurship easier, as the changes will further strengthen the opportunities for small business owners according to the Fiscal Affairs Director of the Federation of Finnish Enterprises Anna Lundén. According to her, the Tax Administration has updated its guidelines for when work carried out by a subcontractor is be carried out by an entrepreneur or by an employee of a company.

The modified guidelines allow for more jobs to be done by entrepreneurs. According to the Tax Administration, the updated guidelines allow for payments from individual assignments to be regarded as work compensation in taxation more often. Former and retired employees can now sell their services to their former employees if characteristics for an agency relationship are met. This was not possible before.

Anna Lundén advises entrepreneurs to revise previous conflict situations due to the change in guidelines as the Tax Administration will apply the new guidelines to determine whether a transaction is considered wage income or entrepreneurial wage. Entrepreneurs should inform their sponsors that the guidelines have been changed so that interpretation disputes can be re-evaluated. It is possible to apply for a preliminary ruling in accordance with the new guidelines. The latest case law supports the view that the solution is no longer made solely on the basis of the individual characteristics of an employment relationship; this is an important change. According to the guidelines an agency relationship is there when the work is done by a company or entrepreneur who has ensured that all basic steps have been taken for the company to be registered, at least in most cases.