News about taxation for grantees

Together with the Tax Administration’s experts, the lawyer of the Association of Finnish Foundations has looked into issues reported by members relating to the taxation of grants. Because many of our grantees may also be pondering these same questions, we have collated the information for you here. The solutions below have been reviewed by the Tax Administration.

Grants received from private funders appear in the 2019 tax return as subject to taxation, even though they do not influence the final tax calculation nor, consequently, the tax to be paid, if the total amount of grants received (after deductions) does not exceed the annual amount of the Government’s artist grant. Therefore, the tax return does not need to be corrected, even though grants from private sponsors are misleadingly marked as taxable grants. If the total amount of grants received exceeds the amount of the Government’s annual artist grant (2019: EUR 20,728.44), the part of the taxable income from private entities’ grants that is in excess of the artist grant is considered taxable income, and deductions can be allocated to it.

As regards working groups, it should be noted that the pre-completed tax form may show the grant received by a research or working group as entirely the income of one person. This may be the case if the grant awarded to the working group has been notified in full only to the person named as the person responsible for the group, even though the grant was awarded also to the other researchers in the group. A similar problem may have arisen in a situation where the total amount of the grant has been declared in an annual declaration under the name of the person responsible for the research team, even though the grant has actually been paid to an institute or university, which has paid the research team’s wages or salaries and any other expenses from the grant during the grant period.

In this case, the group leader must correct their pre-completed tax return and mark only their share of the grant as received by them and, if necessary, correct the information about the grant being paid to the group. The group leader may also remove the grant income in question from their total income if they have not received said income at all in the form of a grant. The other members of the group must mark their share of the grant in their own tax returns. The easiest way to correct a pre-completed tax return is at MYTAX. Please note that in matters concerning taxation, you should always contact the experts of the Tax Administration.

This information has been compiled on the basis of the newsletter of the ASSOCIATION OF FINNISH FOUNDATIONS.