Applying to the VAT registry
Tarmo Toikkanen
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OKFI has started organizing training events in 2019. Tickets are sold to participants. This is clearly business, and not part of the "common good" mission (yleishyödyllisyys) of the association.
Now, this is completely fine and allowed to do, as associations can and often have business-like activities as well. However, if our business exceed 10,000€ yearly, we will be required to pay VAT on all our business income for the entire year. If we come up with other training events or other activities (such as selling t-shirts), we will exceed this limit.
We have the option of voluntarily joining the VAT register. This would essentially mean that our business-like sales would have 24% VAT in their pricing, but on the other hand, any costs we have related to our business, we can deduct the VAT from them.
Again, if our sales exceed 10,000€ yearly, we have no option but to become VAT-compliant and pay any VAT after the fact. We have the option of now voluntarily starting to handle VAT to avoid a nasty surprise towards the end of the year.
Tarmo Toikkanen Sun 31 Mar 2019 9:37AM
I'm collecting opinions and concerns (and objections). The board will make the official decision, but now everyone is welcome to pitch in.
Susanna Ånäs Sun 31 Mar 2019 9:41AM
I support registering and paying/deducing VAT fully, already from the beginning of the term. Learning when it can and cannot be applied requires some learning but I am convinced we can manage this with the robust new accounting processes.
Tarmo Toikkanen Sun 31 Mar 2019 9:43AM
@mikaelseppala , yes, MyData has been not-VAT. Unique events are not business, that is stated clearly in VAT guides. But my understanding is that MyData Global is now applying to be in VAT, since that event is clearly turning into a continuous process and thus becoming business. The size of the activity is not the deciding factor (except for the 10k limit for small scale activities).
Likewise, our training events are continuous. If they (plus any other activities that the tax authority might consider business) reach 10,000€, we will be in a bit of trouble.
Tarmo Toikkanen Tue 2 Apr 2019 5:16PM
@piaadibe , this decision would not affect anything from previous years, so MyData conferences will be unaffected.
Mikael Seppälä Wed 3 Apr 2019 7:15PM
We had a seriously disturbing email discussion with @tarmotoikkanen about this proposal to deduct VAT retrospectively for courses that have already been done and completed before this discussion about VAT even started.
@tarmotoikkanen is making the interpretation that if the board makes the decision to apply for VAT, the association is justified to take an additional 24 % of the income of these courses that were not able to bill the VAT from the payers since VAT was not discussed up front.
From a financial standpoint this means that given @tarmotoikkanen's interpretation the association would be taking 18 % overhead + 24 % VAT = 42 % of total income with a one-sided decision.
We don't feel this interpretation is fair nor legal. It is not fair nor do we believe it is legal for business companions or employers to change agreements one-sidedly. If the board wishes to apply VAT retrospectively to past courses, it should be the association overhead rather than the agreed-upon compensation for the trainers that should account for it.
Tarmo Toikkanen Thu 4 Apr 2019 5:24AM
Just to clarify it's not the association that is taking the 24%. It's the tax authority. OKFI will not get any of that 24%, it's just paid through the association to the tax authority. And the risk here is that if we are lated forced to pay VAT, it's the association's own savings that will be used to pay those taxes. Therefore this is a conundrum. Sorry if you feel the discussion has been "disturbing", I've tried to keep it to the facts, which are quite clear, but apparently have not been successful.
Susanna Ånäs · Sun 31 Mar 2019 9:08AM
Is this vote for a broader audience than the Board?