Buying services for the household
For example, if you buy domestic cleaning from a business enterprise or from a self-employed home cleaner, it is important to check whether they have a valid registration for tax prepayment. If they have not registered for prepayment, your household is responsible for a number of obligations. The obligations may concern both private individuals and estates of deceased persons.
If registration is valid
When you buy a service (e.g. cleaning) from a business or from someone who is self-employed and is registered for prepayment of taxes, you have no other obligations than to pay the invoice. There are two ways to find out whether a registration for tax prepayment is valid:
- Search at the Business Information System website (www.ytj.fi). The search is free of charge, and either the company name or its ID can be typed in the search field.
- Call our Telephone Service at 029 497 051 (standard call rates apply).
If the service provider is a prepayment-registered business or a self-employed trader, the household qualifies for a tax credit for domestic expenses, provided that all the other conditions for it are met.
If registration is not valid
If the business or self-employed is not on the prepayment register, the amount paid for work done will affect the obligations you have. The euro amounts below are thresholds that apply specifically to each payer. They concern both individual taxpayers and estates of deceased individuals.
If the business/self-employed is not registered, and you pay max. €1,500 a year for the work, your obligations are outlined as follows:
- No need to withhold tax
- No need to pay health insurance contributions and mandatory insurance premiums because the services are performed by a business
- No need to file tax returns on employer's contributions
- No need to file annual information to the Tax Administration (no need to file the Employer Payroll Report form).
If you have withheld tax on the payment, for example because the business/self-employed has asked you to withhold tax, you must file and pay it on to the Tax Administration by the 12th day of the following month. You can take care of filing and payment in MyTax (tax.fi/mytax).
If the service provider has not registered for prepayment and if the amount paid for work done exceeds €1,500 a year, you must
- Withhold tax on the paid amount
- File and pay on the withholding to the Tax Administration by the 12th of the calendar month following the date of payment
- File the Employer Payroll Report once a year (use the 'H' Type of Payment, indicate the amount paid and the amount withheld).
You can file and pay the withholding in MyTax (tax.fi/mytax) under Employer's contributions.
You must file the Employer Payroll Report by the end of January after the end of a year when you have paid a service provider. Alternatively, you can file it as soon as you've paid them for the final time, provided that you are not going to make any further payments to the same beneficiary. Please note that whenever you file a new Employer Payroll Report, we treat is as a replacement of an earlier one. For this reason, we recommend that you send us all the annual information for the entire calendar year on one single report.
Withholding as instructed on the worker's tax card
If the service provider has not registered for prepayment, the household must withhold tax according to the rate stated on the service provider's tax card.
- For individuals who fail to present a tax card, the withholding is 60 % of the amount paid.
- When the work is done by a business or an organization (such as a limited liability company, cooperative, general partnership or partnership), the withholding is 13%.
Before you calculate the amount to be withheld, the VAT must be subtracted from the final sum of the invoice. On the other hand, expenses for travel and materials are not subtracted from the invoiced sum when withholding is calculated.
Note: A household will not qualify for the tax credit for domestic expenses if the service provider has not registered for prepayment. Some caregiving services are an exception from this rule.