Light entrepreneurship means that you employ yourself and use an invoicing service company. Light entrepreneurship is possible without starting a business. However, activities resemble full entrepreneurship, as light entrepreneurs are usually similarly responsible for their actions, as well as tax and other obligations.
As a light entrepreneur, you send invoices to buyers through an invoicing service, which they then pay directly to the invoicing service company. The invoicing service company pays the invoiced amount to you as regular wages or non-wage compensation for work. Contact your invoicing service company to check which type of income you receive and identify the type of tax card you require. Separate tax cards are used for wages and non-wage compensation for work.
Read more about how to apply for a light entrepreneur’s tax card (vero.fi).
The use of invoicing services carries a separate charge. Contact invoicing service companies directly to ask for their prices. While the income you receive through invoicing services is shown in the pre-completed tax return, remember to check that your income and other details are correct. You can deduct the expenses resulting from your activities as a light entrepreneur in your taxation. These expenses include the invoicing service company’s charges and equipment expenses. Add them to the tax return as required.
Light entrepreneurs are usually responsible for their earnings-related pension contributions, as invoicing service companies do not normally collect them from the amounts they pay. In practice, you need to take out pension insurance for the self-employed, i.e. YEL insurance. Insurance is mandatory when certain conditions are met. These conditions are related to the duration of the activities pursued and the amount of income earned from them. Visit tyoelake.fi/en to see when YEL insurance is mandatory. YEL contributions can be deducted in taxation.
As a light entrepreneur, you may also have a VAT liability. You have a VAT liability if these two conditions are met:
- You receive non-wage compensation for work, not wages, from your invoicing service company.
- The amount of non-wage compensation for work is more than €15,000 during 12 months.
If you expect both conditions to be met during the first 12 months, you have a VAT liability from the beginning of your light entrepreneurship. As a light entrepreneur with a VAT liability, you have an accounting obligation, and you need to complete a business tax return next spring.
Keep track of the amount of non-wage compensation for work you have received, even if you do not have a VAT liability. If you still expect to receive more than €15,000 in non-wage compensation for work during 12 months, get registered in the VAT register as quickly as possible.
This is how you apply for VAT registration (vero.fi).
Are you already in the prepayment register?
If your company is in the Finnish Tax Administration’s prepayment register and you still want to use an invoicing service company, you do not need to send your tax card to it. Instead, you need to see to your business taxes yourself by making tax prepayments.
Read instructions for new entrepreneurs for tax payments (vero.fi).