Tax Guide for Professional Artists

Two tax laws

The taxation of professional artists is based either on the Finnish Income Tax Act (tuloverolaki) or the Finnish Business Income Tax Act (elinkeinoverolaki). The advice given in this Tax Guide primarily applies to artists taxed under the Income Tax Act.

If your main income comes from selling works of art, you are usually taxed under the Business Income Tax Act. If this is how you generate most of your income, it is a good idea to obtain accounting services from an accounting firm. In your case, your art-related activities are regarded as business activities and you can usually claim a tax deduction for your accounting fees. Accounting is best left to the professionals as very few artists have the expertise to do their own accounts properly.  Moreover, outsourcing your accounting allows you to focus on your own work. Accounting firms can also help you make use of tax shelters.

Even if you are taxed under the Business Income Tax Act, much of the advice given in this Guide can be applied to your situation. Anyone taxed under the Business Income Tax Act must file a business tax return via the online MyTax service or by filling in Tax Administration Form 5 Business tax return for business operators and self-employed persons. Detailed instructions for filing this type of tax return can be found on the Finnish Tax Administration website.
 

Artist’s taxation under the Finnish Income Tax Act

If, in addition to selling works of art, you generate income from a paid job (e.g. art-related teaching job or other paid work), you will be taxed under the Income Tax Act. Most artists generate only part of their income from their art sales while their main income comes from paid work in the field of arts or elsewhere.

Artists who are taxed under the Income Tax Act must declare their income and expenses related to their artistic activities in their pre-completed tax returns filed in spring. These income and expenses are declared via MyTax or by filling in Form 10 Grants and Form 11 Production of income.

 

Professional artists are obliged to keep records

Even though artists taxed under the Income Tax Act are not required to maintain actual accounting records, they are obliged to keep their own records of their income and expenses so that they can present this information reliably to the tax authority when asked. If a person is unable to provide reliable records of income and expenses, the tax authority may calculate an estimation of the person’s income and tax the person on the basis of this estimation rather than on the basis of an amount declared. To avoid this, you should always carefully keep all receipts from any expenses related to your artistic activities and art sales. You can meet your record-keeping obligation by simply recording any income and expenses related to your artistic activities in chronological order in your own logbook.

If you are liable to charge value-added tax on sales, your records and receipts must show the price including VAT and the reason for VAT liability. Please note that artists taxed under the Income Tax Act can also be liable to VAT (see section VAT liability).

 

Separate tax cards for different types of income

Tax cards have changed since the beginning of 2021. In future, you will need separate tax cards for different types of income: one for wages, one for trade income and one for compensation of use. This means you can no longer use one and the same tax card for all of these.

Each type of income has one income ceiling for the entire year for that income type. This means that, for example, the same wages tax card can be used with multiple employers and for all of your wages during one year.

However, you cannot use your wages tax card for your trade income because the deductions made from these two income types are different. You will need a different tax card for your trade income. This trade income tax card can again be used with multiple commissioners and for all of your trade income during one year.

There is also a tax card for copyright remunerations or ‘compensation of use’. This is used for all of your copyright remunerations paid during one year.

If you exceed the annual income ceiling set for a particular income type, the additional withholding rate on the relevant tax card applies to the exceeding part.

Artists often generate income from multiple sources, including wages, trade income or compensation of use, i.e. copyright remuneration. This can make it difficult for artists to estimate their income reliably based on previous years or to know how much each income type will generate. This is why it is important to monitor your income throughout the year. If you are about to exceed the income ceiling set for any of your income types, order a new tax card from the tax authority. You can also adjust your tax cards online via MyTax any time during the year.
                                          

VAT liability

If your annual art sales exceed EUR 15,000, your sales are liable to VAT. If this applies to you, you must also register for VAT. In order to register for VAT, you must first obtain a Business ID.

If your annual art sales do not exceed EUR 15,000, your sales are not liable to VAT. The amount of sales is calculated excluding expenses or any other deductions.

You must estimate in advance if your sales will exceed the EUR 15,000 limit. If your estimation is that the limit will be exceeded, you must file a start-up notification with the Tax Administration. You will find instructions on how to file a start-up notification at the Business Information System website (ytj.fi).

If you estimate that your art sales for the financial year will remain below the EUR 15,000 limit but your sales actually exceed that threshold, you are liable to pay VAT on your sales for the entire financial year. You must file the start-up notification once you realise that you will exceed the limit.

You can voluntarily register for VAT even if your annual sales remain below the limit.

VAT liability means that you must file both your pre-completed tax return with the necessary appendices and a separate VAT return. As VAT is declared separately, the VAT-deductible prices of your purchases and sales must be shown exclusive of VAT in your pre-completed tax return. For more information on VAT, visit the Tax Administration website (vero.fi).

For many artists, whose work requires making many small purchases, VAT liability means a substantial increase in paperwork. If this is true in your case, you might want to consider outsourcing this extra work to an accounting firm just to save time. VAT legislation with its many exceptions (relief for small businesses, limitations on deductions etc.) can be very complicated. When your annual turnover consistently exceeds EUR 15,000 and VAT liability becomes the norm for you, it is recommended that you contact an accounting firm.

You must declare your income and expenses (expenses for the production of income) to the tax authorities in your pre-completed tax return. Your pre-completed tax return already contains the information that the tax authority has on you, such as your wages or various loans.

If you notice any errors or that any information is missing in your pre-completed tax return, you must add or correct the information via MyTax or by filling in the appropriate form. Example: if your pre-completed tax return shows trade income from your activities for the production of income but the information is wrong, you must correct the information via MyTax or using Form 50A. You also report any expenses related to the income stated on your pre-completed tax return via MyTax or using Form 50A. If all the information on your pre-completed tax return is correct, you do not have to do anything.

The tax authority does not hold information on your income from your artistic activities, such as the sale of works of art. The tax authority also does not hold any information on your expenses related to your artistic activities. Any such information on the income or expenses related to your artistic activities that are missing from your pre-completed tax return must be reported either via MyTax or by filling in Form 11 Production of income. Detailed instructions can be found on the Tax Administration website (vero.fi). This Guide uses example cases typically faced by artists.
 

Pre-completed tax return deadline

You will receive your pre-completed tax return containing information on the previous tax year in the spring. You can view your pre-completed tax return in MyTax around the same time that the hard copies are posted.

Your pre-completed tax return will state your personal deadline for making amendments to your tax return.You must amend your tax return online or on paper no later than by the stated deadline. If you decide to post paper forms, make sure that they are received by the Tax Administration by the deadline stated on your tax return.

You can also request an extension for making amendments. You can request the extension using the Tax Administration Form Application for extension of time to submit tax return. The application must be submitted before your tax return deadline. Usually, the extension granted is no longer than two weeks. The deadline for submitting your tax return can be further extended in special circumstances by written application. This longer extension must also be applied for before the original tax return deadline.
 

No appendices to pre-completed tax return

Currently, it is not possible to attach any appendices, such as receipts or additional information, to pre-completed tax returns.

However, the tax authority may request to see your notes, receipts and appendices. You must be able to show how the expenses you have reported are related to your production of income upon request.

Keeping records

You are responsible for keeping any relevant receipts or notes. You must keep this documentation available for six years (the wording in the legislation says five years from the beginning of the calendar year following the end date of tax assessment).

In the current system, your documentation will only be reviewed by the tax authority if there is something about it that attracts the authority’s attention or you are randomly chosen for closer review. Your 2023 taxes can be reviewed by the tax authority as late as in 2028.

Tax decision

Once you have filed your pre-completed tax return, the tax authority will send you your new tax decision by the end of October.

The tax authority may ask for further information on matters that may affect your taxation. If the tax authority does not accept a deduction you have made, they will usually inform you and give you an opportunity to provide a written statement on the matter. If they still do not accept the deduction, you can file a claim for adjustment.

A claim for adjustment can be filed after your tax assessment has been completed, i.e. after you have received your final written tax decision.  The claim for adjustment is filed with the Tax Administration’s Adjustment Board. Its decision can be appealed to the Administrative Court. The Administrative Court’s decision can be appealed to the Supreme Administrative Court if you are granted leave to appeal.

If any income from your artistic activities during the tax year is missing from your pre-completed tax return, such as income from selling or hiring works of art, you must declare it via MyTax or using Form 11 Production of income. A tax year is the same as a calendar year. You declare your income and expenses from one tax year in the tax return of the following year.

Income from selling works of art must be declared in your tax return for the tax year in which you generated the income, i.e. the year you received or had access to the money.

If you have no income from sales, you must still file the tax return if you had expenses from your artistic activities in the tax year. It is very common for income from the sale of a work of art to be generated in a different year than the expenses directly resulting from producing that work of art.

If you are employed, your employer will inform the tax authorities of your wages. Pensions are also usually shown in the pre-completed tax return. This means that you only have to enter your wages or pension if, for some reason, this information is missing or incorrect in your pre-completed tax return. If you want to use a physical form to add or correct your wages or pension, you must fill in Form 50A.

You must also check and declare any trade income, which means compensation paid for work or a service that is not considered wages. You can also use Form 11 to declare trade income.

Allocating and declaring expenses

Deductible expenses must be allocated to a specific income type (e.g. wages, grant, income from artistic activities) depending on how the expenses were incurred. In MyTax, you enter your expenses allocated to different income types under different headings. The same applies when using paper forms: you need a different form for each income type.

Expenses from your artistic activities, i.e. expenses for the production of income, are declared under Expenses for the production of income or using Form 11.

You must declare expenses from your artistic activities in the tax year they were incurred, i.e. when you made the payments.

Note that some of the deductions are made from the tax and others from the income. This is why you will not automatically receive as a tax refund the deductible amount you reported. For example, travel expenses are deducted from your earned income before your tax is calculated.
 

The most common expenses for the production of income for artists

Home office or studio

If you have rented an office, studio or storage room for your works separate from your home, you can deduct the full rent. Any related electricity or heating expenses are also deductible in full.

Expenses from an office or studio that is in your home can also be deducted. If your home office or studio is only used for working and it cannot be used for any other purposes, for example due to a large number of tools and supplies or because it is designed for a particular activity (oil painting, carpentry, etc.) or other similar reason, the tax authority may accept a deduction based on the relative size of the office/studio. In this case, you should determine the surface area of your home office or studio in relation to the surface area of your entire home and then calculate the share of the office/studio from your total housing costs (rent, electricity, heating).

Example: An artist uses his studio for oil painting and for storing his unfinished and finished works, paints, solvents and various tools and supplies. His studio is not and cannot be used for any other purpose. The studio surface area is 20 m2 and the surface area of his entire home is 100 m2. Therefore, the studio makes up 20% (20/100=0.20) of the artist’s entire home. The artist’s total monthly housing costs (e.g. rent and electricity) are EUR 800. This means that his monthly home studio deduction is 20% of this amount or EUR 160 (800 x 0.20). His annual home studio deduction is EUR 1,920 (12 x 160).

It is advisable to make detailed notes on how you use your home office or studio for your work. You might need this information when your tax return is reviewed more closely or if you want to make a claim for adjustment. Your records might include a floor plan of your home that shows your home office/studio and other rooms. Photographs taken of the home office/studio may also be helpful.

If you do not want to provide such details to claim actual expenses, you can claim the standard workspace deductions. The annual amounts for the standard formula-based deductions can be found on the Tax Administration website (vero.fi).

If spouses use the same home office for income production, both spouses can claim the standard home office deduction as described above. If spouses claim deductions based on actual expenses, the deductible amount is divided between the spouses according to the information they provide on their use of the home office.
 

Materials and supplies

All art materials and supplies are fully deductible.
 

Tools

Any tools that you need in your work are deductible as a lump sum (one-off depreciation) or as annual declining-balance depreciations (annual depreciations). If the estimated useful life of a tool is over three years, its acquisition cost is deductible as annual depreciations. Depreciations are done for each tool individually.

The maximum amount of annual depreciations is 25% of the remaining acquisition cost in the tax year. If the tool’s acquisition cost was no more than EUR 1,000, its estimated useful life is considered to be no more than three years. So it is deducted as a one-off depreciation.

Example: You bought a work camera which cost EUR 800. This amount is deducted as a one-off depreciation. You bought a video projector which cost EUR 1,500 in 2023. This amount is deducted as annual depreciations in the following way: in the year of acquisition, you deduct EUR 1,500 x 25 % = EUR 375. The remaining acquisition cost in the tax year 2023 is EUR 1,125 (1,500–375). The deduction in 2024 is EUR 281.25 (1,125 x 25%). The remaining acquisition cost in the tax year 2025 is EUR 843.75. When the remaining acquisition cost is about EUR 500, you can write-off the remaining amount as a one-off depreciation after which the tool has been fully deducted.

If the tax authority request additional information, you should be able to show how the tool is relevant to your work so that the tool can be accepted as a deductible cost.

If you use the tool both for your income-generating work and for other purposes, this must be taken into consideration. In the case of computers, for example, the Tax Administration guidelines state that when you can show that some of the use is work-related, you can make a 50% deduction, and when you can show that the use is primarily work-related, you can make a full deduction. When your tool is used mainly for generating income, you can deduct it fully either as a one-off depreciation or as annual depreciations depending on its acquisition price. For example, if you use your work computer to pay personal bills, the computer is still considered a work computer.
 

Phone and internet

You can only deduct your phone and internet expenses if they are related to your artistic activities. If you have the same phone or computer for your personal use, you should estimate how much of the total use is personal and how much is work-related. Make a record of how you arrived at your estimation. The same principle that is used to deduct your computer expenses is also used to deduct the cost of the internet connection you use for the production of income. In practice, you estimate how much of the total use is work-related: either 50% or 100%.

If you have an office or studio that is not in your home, and you have phone and internet connections there, you can deduct expenses from these connections in full.

 

Other office and organising expenses

When you organise your work in an office, you have various expenses, from printer paper to paperclips. These are expenses incurred in the process of producing or maintaining income and can be deducted. If the nature and extent of your artistic activities means that you require the services of an external accountant or accounting firm (e.g. when you are liable to VAT), the resulting expenses are deductible.

 

Framing and casting

Any actual framing and casting expenses are fully deductible.

 

Transport

Any actual expenses from transporting your works of art are fully deductible.

 

Website

If you have a website related to your artistic activities, the expenses from designing, creating and maintaining the website are fully deductible. Moreover, any expenses from being included in an online catalogue of artists can be fully deducted.

 

Advertising

Advertising expenses from promoting the sale of your own works are fully deductible. The same is true for any PR expenses (e.g. business cards) related to your income-generating activities. Entertainment expenses are only deductible if you are taxed under the Business Income Tax Act and even then, there are many restrictions.

 

Membership fees

Fees paid for memberships in trade unions or artists’ associations are deductible if your membership can be regarded as related to and promoting your own work.

 

Exhibitions

Actual expenses from hiring galleries and producing invitations and posters, etc., are fully deductible. If you are responsible for the catering at your exhibition opening, these catering expenses should also be deductible provided that you can show they were related to your production of income as an artist.

 

Gallery commissions

Any incurred gallery commissions are fully deductible. Normally, the gallery will provide a receipt where the gallery’s provision has already been deducted from the final selling price so you do not have to make the deduction. Be sure to check the VAT rate used for sales by a gallery and how to take that into consideration in your own taxation.

 

Pension insurance (YEL/MYEL)

Any YEL pension insurance contributions as well as MYEL pension insurance contributions paid by grant recipients are fully deductible. You can find more information on YEL insurance by contacting your insurance company. For more information on MYEL insurance, visit the Mela website (mela.fi).

 

Other work-related insurance

Insurance premiums covering an office/studio outside the home are fully deductible. If you have insurance that covers your works, storage space or expensive tools, for example, these premiums can be fully deducted. If you have an extensive insurance package that includes both work-related and personal coverage, you must make a distinction between the two and only claim deductions for work-related insurance premiums.

 

Documentation of works

Documenting your works is necessary for many reasons. Any expenses incurred from such documentation (e.g. pictures taken of your works) are fully deductible. Again, you must distinguish between work-related and personal pictures even if they were invoiced under one invoice. You can only deduct the expenses from work-related pictures.

 

Professional literature

Expenses from professional literature (books and magazines) are deductible in full. Newspapers and generic magazines are not deductible.

 

Visits to exhibitions and museums

As an artist, you have to visit exhibitions and museums to support your own professional development. This allows you to gain inspiration for your own creative work. The tax authority will decide on these expenses on a case by case basis, and they can be determined to be either partly or fully deductible. Usually, they are fully deductible.

 

Work clothes

There are no steadfast rules about deducting work clothes. Normally, expenses from work clothes are considered non-deductible living or personal costs. If you need protective clothing, these might be deductible. If you have to have such protective clothing cleaned professionally, these expenses are also deductible. On the other hand, clothes you might buy to wear for an exhibition opening are usually non-deductible. This is because you can also wear such clothes for private functions, so they are not considered to be related to your work. However, if you hire a tuxedo/dress for a work-related function, this can be viewed differently. Hired clothes will be returned, and you will not be able to wear them for private functions. In such cases, the hiring expenses should be deductible.

 

Travel

Commuting between home and office/workplace

If you have a separate office or studio, declare any expenses from the commute between your home and that office/studio via MyTax or using Form 1A. You are allowed to claim expenses by the least expensive means of transportation. In 2023, your own liability threshold is EUR 750 and there is also an upper limit to these deductions. Only in exceptional circumstances will the tax authority accept deductions for commuting by some other means than the least expensive means of transportation.

 

Business trips

Actual travel expenses from irregular work-related trips, such as travelling to acquire materials/supplies, hang works in a gallery, conduct negotiations, paint or do other work-related activities, are fully deductible. If you use your own car for such trips, you can claim so-called kilometre allowance. The tax authority does not have an established position on how it views work-related trips by artists. Sometimes the tax authority accepts the standard employers’ tax-exempt kilometre allowance as the basis for calculating kilometre allowance for artists. Sometimes only a deduction of EUR 0.30 per kilometre (in 2023) when using your own car for work-related trips is accepted. If this is the case, you are not required to show the actual expenses but only the number of kilometres of work-related travel. If you want to play it safe, you should claim the smaller deduction (EUR 0.30 per kilometre).

You should keep records of your daily trips in a travel diary. However, the tax authority may also accept an estimate of your work-related trips based on your total annual travel volume. If you want to do this, you should give a detailed description of the number of work-related trips you make during ‘a normal working week’ and claim deductions based on this for the entire tax year.

You can also claim deductions based on the actual expenses from your work-related travel. If you can show, based on your travel diary and receipts, that your travel expenses are more than EUR 0.30 per kilometre, you should claim deductions based on these actual expenses. This method can be quite laborious as you are required to save all receipts (petrol, maintenance etc.) and record all trips during the year and calculate the deductions.

You can also deduct accommodation and increased living expenses during your work-related trips (see Increased living expenses).
 

Excursions

Excursions may or may not be deductible. It is quite common that citizens and the tax authority do not always agree on whether an excursion has been work-related or not.

For your excursion to be deductible, you have to show a clear connection between it and your work. The tax rules state that any excursion must be ‘justifiably and clearly’ work-related. Expenses from an excursion can be either partly or fully deductible. The tax authority will be specifically interested in how much of your time was spent in work-related activities and how much leisure time there was. If a substantial part (e.g. 50%) of the excursion was reserved for leisure activities, the tax rules would not allow expenses from this part to be deducted. You can use the excursion schedule or similar document to show the amounts of work and leisure. If the excursion is deemed primarily work-related, travel expenses are deductible even if there were a few leisure activities.

Deductible expenses from an excursion include travel, accommodation and increased living expenses on the same basis as other work-related trips.

 

Increased living expenses

Increased living expenses means any meals, laundry, communication and similar expenses incurred during your work-related trip to the extent that they exceed your normal living expenses. According to the Tax Administration, you can only deduct these expenses if you can reliably show that your living expenses have indeed increased. You should keep records of this. Your records should include details of your activities during the trip and where and how the increased living expenses were incurred.

You should use the actual expenses when claiming these deductions. If you have no receipts for the actual expenses but you can reliably show that there must have been increased expenses, you can claim so-called per diem allowances. Per diem allowances for travel in Finland and abroad are set annually by regulation, and they are also used to calculate employees’ per diem deductions.

Per diem allowances are payable only for such days when the temporary workplace is located more than 15 kilometres away from either your regular workplace (such as a studio) or home, depending on where the trip begins. Moreover, the temporary workplace should be more than 5 kilometres away from both your regular workplace and home. Each year’s per diem allowances are found on the Tax Administration website (vero.fi).

 

Artist residency

Expenses from working as an artist-in-residence are deductible. Travel and accommodation expenses can be deducted in full.  If your residency trip also includes a private holiday or substantial leisure time, you should take this into account when claiming deductions just like with excursions.

You can also deduct your increased living expenses during the trip (see Increased living expenses). Because residency accommodation is usually very home-like, the tax rules usually only allow for deductions equal to 50% of the relevant per diem allowance.

If the tax authority asks you to give a more detailed account of your residency, you should describe your residency in detail, including listing any works you have completed during the residency. Naturally, you should also show how much of your residency was purely work-related.
 

Keep detailed records of trips

In order to distinguish excursions and business trips from non-deductible holidays, you should write down in your records a description of each trip, at the latest when you are filing your tax return. Your description should include an hourly or daily schedule and detailed reasons for the trip as well as an explanation of how the trip was relevant for your artistic activities. To avoid any ambiguity, it is a good idea to give a detailed explanation of how a particular trip promoted your professional development so that the tax authority does not interpret your trip as a non-deductible holiday. It is also advisable to keep any receipts related to living expenses during the trip. Receipts are not needed if you are basing your increased living expenses deductions on standard per diem allowances.

Non-deductible expenses (living expenses)

You are not allowed to deduct any expenses that are not incurred in the process of producing or maintaining income. This means that regular personal living expenses are not deductible. Living expenses include, for example, rent and expenses from taking care of your children and home. Moreover, normal clothing, hobbies and personal consumer expenditure are considered living expenses. As explained above, acquisitions may be for both personal and work-related use. In such cases, deductions can only be claimed for work-related use. Personal use is included in non-deductible living expenses.

The two basic types of grant are project grants and working grants. There are also grants where the artist is awarded grants to cover both living expenses and other expenses. You should keep detailed records of the types of grant you have received and what expenses you have covered with each grant. You should also keep a copy of any decisions by which you have been awarded a grant.

Working grants are awarded to allow artists to focus on their work. The purpose of a working grant is to fund the recipient's ordinary living expenses, such as housing, clothes, food and leisure.

Working grants include state artist grants (1.5–5 years), public display grants and annual grants awarded by private foundations in support of the artist’s work.

Project grants are designed to cover specific costs, such as a trip or an exhibition.

It is advisable to keep your expenses covered by a project grant separate from any other expenses incurred from your income-generating activities, and also keep their respective receipts separate. If you have used the entire project grant for its intended purpose, there is no taxable income left. In this case, you should be able to show receipts of expenses that match the amount of the grant. If the expenses of the project for which you were awarded a grant exceed the amount of the grant, the exceeding expenses can be deducted as normal production of income expenses.

If your grant is meant to cover both a project and living expenses, you should keep separate records of these two types of expenses. If the party awarding the grant did not do this in the award decision, you must itemise and allocate the relevant expenses.

 

Party awarding grants and taxation of grants

The granter is relevant when deciding if your grant is tax exempt or not.

Grants awarded by public sector organisations are fully tax exempt regardless of how big the amount is either individually or in total.

Public sector organisations include the state, municipalities, the Nordic Council, regional arts councils, state research councils, joint municipal authorities, Arts Promotion Centre Finland, the Evangelical Lutheran Church of Finland and the Finnish Orthodox Church, the Social Insurance Institution of Finland and the Bank of Finland. Note that a foreign state or public sector organisation is not a public sector organisation whose grants are always tax exempt within the meaning of the Income Tax Act.

Grants awarded by private granters have limited tax exemption. Grants awarded by private granters constitute taxable income to the extent that the total amount of the received scholarships, study grants, other grants or awards awarded by public sector organisations or the Nordic Council, after deducting any expenses incurred in the process of producing and maintaining income (net amount), exceeds the annual amount of the state artist grant in the tax year in question. You can check the amount of the annual state artist grant from the Arts Promotion Centre website (taike.fi).

Grants awarded and reported by private granters may have been recorded as taxable income in your pre-completed tax return even if they are below the state artist grant mentioned above. However, they are still not taxable income unless they exceed the limit, and you do not have to pay tax on them.

Private granters include the Finnish Cultural Foundation, the Alfred Kordelin Foundation, the Swedish Cultural Foundation in Finland, Oskar Öflunds Stiftelse and other private foundations and associations. State universities and higher education institutions are regarded as private granters.

When the taxability of your grants is determined, project grants awarded by public or private granters are not included in the total amount of grants if you can show that you have used the entire grant for its intended purpose.

 

Taxation of grants is decided case by case

All payments made under the name of grants are not grants within the meaning of the Income Tax Act. In order for a grant to meet the requirements set in the Income Tax Act, it must be awarded in support of art-related activities. Any grants that are not truly grants in this sense will be taxed in full.

Taxation of grants is decided on a case-by-case basis. The tax authority will pay particular attention to who awarded the grant, whether there was an open competition, whether the grant is actually compensation for work, what information the applicant had to provide and whether the granter a non-profit organisation or a business.

It is very unlikely that the tax authority will raise any questions concerning established grants, such as the state artist grant, public display grant or the working and project grants awarded by major foundations. However, to avoid any complications, it is best to be aware of the circumstances around any grants you might be awarded.

 

Declaring grants

To declare your grants on a paper form, use Form 10 Grants. The form has separate sections for declaring taxable and tax-exempt grants. Use Form 1A Statement on foreign income (earned income) to declare grants awarded by a foreign granter.

In MyTax, any grants that the tax authority is already aware of are stated under Pre-completed income and deductions. If none of your grants are already listed here, enter the information under Other income. Declare your taxable and tax-exempt grants separately as well as the expenses allocated to each grant.

If you fail to declare your grant, the tax authority may treat it in a way that is unfavourable to you. This means that your tax-exempt grant may be taxed or that the wrong expenses may be allocated to it.

As of the 2019 tax year, grants must be declared in the same tax year in which they are paid.

Sometimes grants are awarded in such a way that it is not possible to know or deduct expenses related to the grant until much later. In such cases, the tax authority will allow you to accrue the expenses that will be allocated to your grant.

Example: In October 2023, an artist received a EUR 5,000 project grant for her upcoming exhibition. However, the exhibition will not run until May 2024. Some of the expenses (EUR 2,000) will be incurred in November when she makes a prepayment for a gallery and pays for the invitations but she will use the remainder (EUR 3,000) in the 2024 tax year. The artist creates an accrual and declares EUR 2,000 in her 2023 tax return. She uses the remaining EUR 3,000 to pay for the gallery and exhibition opening expenses in May–June 2024. In her tax return for the tax year 2024 (filed in the spring of 2025), the artist declares the accrued expenses, i.e. the EUR 3,000.

If your grant is a project grant, you should deduct the expenses related to the grant and declare the difference.

If the Tax Administration asks for more information on a working grant, you should show that it was used for non-deductible living expenses.
 

Pension insurance when working under a grant

As of 2009, pension insurance contributions are required of anyone working under a grant. If you are a recipient of a grant that was awarded in Finland and under which you are working in Finland for at least four consecutive months, you must apply for a MYEL pension insurance. As a grant recipient, you should always contact an insurance company to check if you are legally required to get insurance. For more information on MYEL insurance, visit the Mela website (mela.fi).

Your statutory insurance contributions will be around 13%–25% of your grant. Your contribution is based on your age and so-called MYEL earnings which will be calculated for you and stated in your insurance decision.

Moreover, a health insurance contribution and a public broadcasting tax will be levied based on your MYEL earnings. The health insurance contribution consists of a medical care contribution and a daily allowance contribution. You can check the annual amounts of the contribution on the Tax Administration website (vero.fi). Your public broadcasting tax will depend on your income and is EUR 0–163 per year. If you receive less income than EUR 14,000 per year, you do not have to pay public broadcasting tax at all. The tax is 2.5% of the part of your work income under MYEL insurance that goes over EUR 14,000.

The original guide was created by Henri Nieminen in May 2014, Lawyer, Master of Laws with court training/AAF

Updated in April 2018, Anna Kuusi, Lawyer/AAF

Updated in April 2019, Aura Lehtonen, Lawyer/AAF

Updated in October 2021, Viivi Kuosa, Legal Advisor/AAF

Last updated in July 2023, Viivi Kuosa, Lawyer/AAF