Organising artistic work

In Finland, the options include using the same tax card to work for multiple employers, working as a private trader, or setting up a general partnership, limited partnership, limited company or cooperative. These allow artists the flexibility to work as an employee, be self-employed or set up their own company. The different options are descried in more detail below.

Which of these is the right choice for you depends on how you make your income. There are many possible sources of income: sales of artwork, grants, copyright revenue, performance fees or entrepreneurial income. Some artists also do other work besides their art.

For example, the professional sale of artworks on the art market is an activity for which you may need to obtain a Business ID. Being an artist-entrepreneur comes with freedom and independence but also responsibilities. Every self-employed person engaged in business or professional activities is obliged by law to keep accounting records.

If you sell artwork or take commissions, you should carefully consider the rights and liabilities of each party to the transaction, according to your form of operation, and make sure that your contracts, insurance plans and taxes are consistent with them. It is advisable to obtain accounting services from an accounting firm.

You can read more on the implications of different forms of operation for your taxes and social security, and of your status as an entrepreneur or employee, under Unemployment and Pensions.

 

Different forms of operation

Using the same tax card to work for multiple employers

Artists who use the same tax card to work for multiple employers often work under an employment contract and choose not to set up their own business for their artistic work. If this applies to you, report the income you receive from your artistic work, such as income from selling artwork and fees, annually via the MyTax e-service or using Form 11, also report any related expenses incurred in the course of your earnings. Read more on your taxes as a visual artist: General information on taxation of visual artists 

 

Private trader

If you are an individual entrepreneur, i.e. a private trader, you work for yourself and in your own name. You make any business decisions independently and are personally responsible for your financial obligations. You can also be a private trader together with your spouse. However, the trade name is only registered in one spouse’s name even if you set up the business together.

A private trader is personally liable, including all personal assets, for any financial commitments, contracts and all business activities. As a private trader, you are entitled to any profit you make but are also liable for all your losses. You cannot pay a wage to yourself or your spouse, nor are you entitled to any tax-exempt fringe benefits such as meals or a phone. You can use your business profit after paying taxes by making drawings. A private trader’s income earned from business activities is taxed as personal income.

Private traders are obliged to keep accounting records and are liable to pay VAT if their turnover in a 12-month accounting period exceeds EUR 15,000. All self-employed persons between the ages of 16 and 67 are obliged to take out YEL insurance (pension insurance for the self-employed) if their business operations continue for at least four months and their estimated YEL income exceeds the minimum YEL income. You can check the annual minimum YEL income on the Pensions website managed by the Finnish Centre for Pensions.

 

General partnership and limited partnership companies

General partnership and limited partnership companies are so-called partnership firms. A general partnership requires a minimum of two founding partners. A limited partnership differs from a general partnership in that, in addition to having one or more active partners, it also has one or more silent partners contributing financially to the company’s activities.

The partners in a general partnership and the active partners in a limited partnership are personally liable for the company’s obligations. The liability of silent partners in a limited partnership is limited to the capital investment agreed upon in their partnership agreement. The partners in a general partnership and the active partners in a limited partnership exercise their decision-making powers either individually or jointly.

In both a general partnership and a limited partnership, the partners agree on how profits and losses are distributed. Partners may claim a reasonable salary and are entitled to fringe benefits and tax-exempt expense allowances. In practice, partners usually take out their profit as personal drawings.

The business profit in partnership firms is taxed as income for the partners.

 

Cooperative

A cooperative is a joint venture owned by its members for the purpose of providing them with financial means and a livelihood. Cooperatives are increasingly popular among artists. You need one or more natural or legal persons to set up a cooperative, and no capital investment is required.

When a member joins a cooperative, he or she pays a non-fixed membership fee which differs depending on the number of members in the cooperative. Each member in a cooperative has one vote.

Only limited compensation can be paid for the capital invested in the cooperative against any profit it turns. In work cooperatives, members may be paid wages, for example, on the basis of hours worked.

A cooperative is an independent taxable entity whose income is taxed as its own. The members of a cooperative are not personally liable for its debts or other obligations but they do have limited liability. The liability for the cooperative’s obligations is limited to the membership fee paid.

 

Limited company

A limited liability company is the most common type of company in Finland. From the point of view of an artist, a limited liability company may be a good option if you have, for example, your own subcontractors or employees, external loans or a costly production process.

A limited liability company can be set up by one or more natural or legal persons. The ownership in a limited liability company is distributed according to share holdings. You can personally determine the number of shares when setting up a limited liability company.

A limited liability company is a distinct legal entity separate from its shareholders and liable for its own obligations. Shareholders are not personally liable for the obligations of a limited liability company, but their liability is limited to their capital investment. A limited liability company is represented by a board of directors, and running the company can involve some red tape.

A limited liability company is an independent taxable entity whose income is taxed as its own. A limited liability company is obligated to use double-entry bookkeeping and must file financial statements.

 

Setting up your business

Setting up a cooperative, limited liability company, general partnership or as a private trader can be done without any monetary investment or minimum capital. In a limited partnership, silent partners must make a monetary contribution, but the amount is not predetermined.

A company is set up by submitting an electronic start-up notification to the Business Information System (YTJ) maintained by the Finnish Patent and Registration Office (PRH). Instructions on the start-up notification can be found on the YTJ website. You will be provided with a Business ID to identify your business. You will be charged a processing fee when you start up your business. The price list for processing fees can be found on the PRH website. 

LINKS
The Business Information System (YTJ)
Cooperative (Pellervo Coop Center website)