{"id":1699,"date":"2016-04-11T12:24:11","date_gmt":"2016-04-11T12:24:11","guid":{"rendered":"http:\/\/impact-phs.eu\/?page_id=1699"},"modified":"2016-04-12T11:44:45","modified_gmt":"2016-04-12T11:44:45","slug":"finland-tax-credit-domestic-help","status":"publish","type":"page","link":"https:\/\/impact-phs.eu\/cz\/pratiques-nationales\/finland-tax-credit-domestic-help\/","title":{"rendered":"Finland \u2013 Tax credit for domestic help"},"content":{"rendered":"

<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u00a0<\/strong><\/td>\nCriteria<\/strong><\/td>\nDescription<\/strong><\/td>\n<\/tr>\n
Description of the measure <\/strong><\/td>\nMeasure<\/strong><\/td>\nTax credit for domestic help \u201ckotitalousv\u00e4hennys<\/em>\u201d<\/td>\n<\/tr>\n
Country<\/strong><\/td>\nFinland<\/td>\n<\/tr>\n
Managing Authority<\/strong><\/td>\nFinnish Tax Administration<\/td>\n<\/tr>\n
Legal Basis<\/strong><\/td>\nAct on Domestic Work Temporary Tax Deduction (\u201cLaki Kotitalousv\u00e4hennyksest\u00e4<\/em>\u201d)<\/td>\n<\/tr>\n
Launched in year<\/strong><\/td>\n2001 (pilot project was launched in 1997)<\/td>\n<\/tr>\n
Main objectives<\/strong><\/td>\nDiscourage undeclared work and encourage formal employment in domestic services.<\/td>\n<\/tr>\n
Nature and type of public intervention<\/strong><\/td>\nThe support acts on the demand side by granting users a tax deduction\/credit up to \u20ac2 400 per year per person (\u20ac 4 800 per household) for expenses over \u20ac 100 to cover :<\/p>\n
    \n
  • 45% of the expenses when users bought the service from an organisation,<\/li>\n
  • 15% of the wage and 100% of the employer social contribution when users employ directly the worker.<\/li>\n<\/ul>\n

    Eligibility is restricted to users which have not already been supported through care policies. There were 390 000 users of the tax credit scheme in 2013.<\/td>\n<\/tr>\n

Type of service providers and the competition between them <\/strong><\/td>\nBoth profit and non-profit organizations are providing services within the tax credit scheme. It seems that no authority has a comprehensive picture of the total household sector and its personnel. However, it has been estimated that in 2011 there were:<\/p>\n
    \n
  • 3 353 household work service enterprise employing 27 200 workers,<\/li>\n
  • 27 700 workers in the third sector service producers.<\/li>\n<\/ul>\n

    The household tax deductions covers only 40% of their turnover.<\/td>\n<\/tr>\n

The price level and price setting mechanism<\/strong><\/td>\nPrices are market-rules based. Competition in terms of price in the household services is known as being extremely high.<\/td>\n<\/tr>\n
Type of employment relations<\/strong><\/td>\nWorkers can either be employed by private provider (i.e. triangular relationship) or directly by the user (i.e. direct employment relationship).<\/p>\n

Over 90% of the household involved purchased the service from a private provider and only 10% employed the worker directly.<\/td>\n<\/tr>\n

The administrative framework and the role of the public authority<\/strong><\/td>\nThe National Supervisory Authority for Welfare and Health (Valvira) and Regional State Administrative Agencies (AVIs) are in charge of supervising household works in terms of work quality and sufficient manning of working places.<\/td>\n<\/tr>\n
Type of services<\/strong><\/td>\nThe following activities are allowed :<\/p>\n
    \n
  • cleaning,<\/li>\n
  • gardening,<\/li>\n
  • renovation and home repairs,<\/li>\n
  • care for an elderly person or a child in the home,<\/li>\n
  • installation and maintenance of support of information technology and telecommunication in the home.<\/li>\n<\/ul>\n<\/td>\n<\/tr>\n
Target groups (users and workers)<\/strong><\/td>\nEmployers\/purchasers<\/td>\n<\/tr>\n
Effects<\/strong><\/td>\nEmployment<\/strong><\/td>\nThis scheme covers about 10,000 working hours per year.<\/p>\n

Many measures and incentives apply to the PHS sector which makes it difficult to attribute employment effects to a single measure or incentive. It has been estimated that there were 4,903 persons working under different titles relating to the household services in 2012.<\/td>\n<\/tr>\n

Creation and\/or fostering of PHS activities<\/strong><\/td>\n10 000 FTE jobs created of which around 1 000 FTE in the housework sector.<\/td>\n<\/tr>\n
Reduction of undeclared work<\/strong><\/td>\nShare of undeclared work decreased from 60%to around 25%.<\/td>\n<\/tr>\n
Better working conditions<\/strong><\/td>\nNo information found.<\/em><\/td>\n<\/tr>\n
Better conciliation of work-life balance<\/strong><\/td>\nNo information found.<\/em><\/td>\n<\/tr>\n
Budgetary effects<\/strong><\/td>\nPublic costs<\/strong><\/td>\nTaking only into consideration household services (i.e. excluding home repairs), the total cost of the tax incentives was \u20ac11 million in 2004.<\/p>\n

The cost of each new job created in gross terms (9 950 gross jobs) is superior to \u20ac11 000.<\/td>\n<\/tr>\n

Earn back effects<\/strong><\/td>\nFor the year 2004, the earn-back effects were estimated at \u20ac12,7 million.<\/td>\n<\/tr>\n
Net cost<\/strong><\/td>\nAs such, it results in a net benefit for the State estimated at \u20ac1,57 million.<\/p>\n

The net cost of each new job created (3 550 net jobs) in net terms (i.e. jobs that would not exist in the absence of the tax incentive) is more than \u20ac31 000. However, taking into account the diverse earn-back effects of each \u201cnet\u201d job created, each new created job would return \u20ac3 800 to the State.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

<\/p>","protected":false},"excerpt":{"rendered":"

\u00a0 Criteria Description Description of the measure Measure Tax credit for domestic help \u201ckotitalousv\u00e4hennys\u201d Country Finland Managing Authority Finnish Tax 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