Three quarters of these dividends are exempt from tax and one quarter is subject to capital gains tax.
Heikki Scarfemeritus professor of company law from Aalto University, stated Helsingin Sanomat last Wednesday that the provision can create situations where the entrepreneur’s income is taxed at 26 percent, which is taxed at more than 50 percent for the wage earner.
This encourages entrepreneurs to take their income as a dividend instead of a salary.
Arrangement identified report However, the corporate responsibility watchdog takes it a step further: the business owner sets up a holding company that acquires shares in their business to grow the company’s value based on revenue potential – or “wishes and projections” as it describes it. written by Niskakangas.
“They thus create a balance sheet almost from nothing,” he summed up for the newspaper. “It [goes against the spirit of the law].”
In this way, entrepreneurs can mark the value so that they can withdraw the maximum amount of 150,000 euros as a dividend.
According to Finnwatch, three companies used the arrangement. WTD Media, owned by Natalia SalmelaOwned by SP Lifestyle Sedge and Mikko Parikkaand Aurika Cleaning, which he owns Auri Kananen.
Salmela has defended the arrangement on social media. “How many different tax tricks are used in the IT, logistics, construction and manufacturing sectors by all kinds of old men and uncles?” he asked on Instagram.
Niskakangas reminded Helsingin Sanomat that unlisted companies in such industries rarely have to establish a holding company, because they have the necessary wealth to take advantage of the offer as much as possible.
Kananen, on the other hand, said that the corporate structure was created with the help of a professional to protect against possible legal actions in the United States. The arrangement’s tax benefits came as “a bit of a surprise,” he said YLE interview September 5th.
“You can use a holding company to protect your money. If you get sued, you won’t lose all your money, but they’re safe there,” he told the broadcaster.
“Of course I took out all the dividends I could, it just makes sense.”
Industry lobbyists and policy makers have described the tax treatment of dividends as an entrepreneurial incentive that strengthens the solvency of companies and encourages entrepreneurs to accumulate wealth in the company before they are rewarded for their work with reduced tax rates. Juha-Pekka RaesteHelsingin Sanomat’s political and economic editor told analysis on Monday.
The tax relief mainly applies to wealthy, successful or entrepreneurs who use different means to increase the value of their company. Treasury stated in this year’s tax survey, that the benefits are enjoyed almost exclusively by entrepreneurs in the highest income brackets.
Unlisted companies paid a reduced tax rate of EUR 2.5 billion in dividends in 2021.
Aleksi Teivainen – HT
Source: The Nordic Page