Private entrepreneurship and royalties
If you wish, you can also direct your personal royalties paid by Teosto to your business. This requires that your business name be registered in the tax prepayment register.
If royalties are paid to your business as a private entrepreneur:
- Teosto will not withhold tax on your royalties. Instead, you must take care of your taxes yourself.
- You can claim tax deductions for your business expenses
A person operating as a private entrepreneur must provide the Tax Administration with an estimate of the result for the financial year in advance. This estimate will be used to calculate the amount of tax that you pay in advance on your result, i.e. prepayments of tax.
Estimating the result in advance can be challenging, but you can revise the estimate you have submitted by contacting the Tax Administration.
If we pay royalties to your business, we will pay them as the gross amount and report your royalties to the Tax Administration as income from a personal source. In this case, the Tax Administration will find out whether you have paid enough prepayment on the result of your business.
As a private entrepreneur, you can also send invoices for compositions, gigs and other kinds of work and claim deductions for your operating expenses.
Notify us every year if you would like your royalties to be paid to your business as a private entrepreneur
If you would like us to pay your royalties to your business, you must notify us at the beginning of each year that you will continue to operate under your business as a private entrepreneur and that Teosto must not withhold tax on the royalties paid to you.
If you do not notify us, we will have to withhold tax on the royalties paid to you in accordance with your tax card. If you have not updated your tax information in our web service, we will have to withhold at 60%.
Notify us about your wish for your royalties to be paid to your business by using the contact form (available only in Finnish). On the form, select I am a composer, lyricist or arranger > I am already a Teosto member > Other. In the subject field of the form that opens, write payment of royalties to a private entrepreneur and state the following in the Other matter field:
- Your company name
- Your Business ID
Please also fill in the contact information fields on the form.
Read more:
Finnish Tax Administration: different types of business and taxation