The Federation of Finnish Enterprises lends a voice to small and medium-sized enterprises in the debate on taxation policy. The tax system should support entrepreneurship, the growth of business activities and employment. The importance of the SME perspective is further highlighted by the fact that small and medium-sized enterprises are estimated to be responsible for an increasing share of economic growth, jobs and investments.
When developing the tax system, it is important to guarantee that it also encourages individuals to take entrepreneurial risk. The total taxation of the enterprise and its owner is crucial, especially in SMEs, which underlines the significance of dividend taxation that takes the risk into consideration. The FFE has played a strong role in making sure that plans threatening to increase the burden of dividend taxation of non-listed limited companies have been successfully rejected.
Taxation must support all forms of business. The FFE demanded the enactment of an entrepreneur deduction when the corporation tax rate on limited companies was lowered in 2014. Consequently, a five-percent entrepreneur deduction for sole proprietors and self-employed persons as well as partnerships with a natural person or estate as the partner has been in force since the start of 2017.
Smooth changes of ownership should be facilitated with good economic and taxation policy. Finding new entrepreneurs to take over existing companies is important for Finland as a whole. Successful changes of ownership in enterprises secure jobs and enable business growth under the new ownership. In addition to labour market development, changes of ownership also contribute to the vitality of municipalities. Taxation should not prevent or hinder changes of ownership.
The minimum turnover for business operations subject to value-added tax must be increased. The FFE has proposed an initiative to amend the Value Added Tax Act so that the minimum turnover for business operations subject to value-added tax is increased to EUR 20 000 and the maximum limit of the rolling tax relief is increased to EUR 50 000. Increasing the limits would facilitate the operations of small businesses and encourage individuals to establish companies and seek growth in a wider range than with the current VAT limit.