Important legislative amendments from start of 2024
SY presents a summary of the legislative amendments in force from the start of 2024.
Producer responsibility for packaging expands
Producer responsibility for waste management expanded at the start of the year. It now applies to all professionally operating companies that place packages on the market. The previous limit of one million euros in turnover, under the amended Waste Act, has been removed by EU regulation, and the obligations now extend to all professional operators.
The producer responsibility for packaging applies to companies which place packages on the Finnish market. These companies must arrange the waste management of the packages they place on the market.
In addition, producer responsibility applies in future to manufacturers and importers of ‘service packaging’ (such as takeaway food containers) and agricultural packaging (such as topsoil sacks). The Pirkanmaa ELY Centre estimates that the change will have applied producer responsibility to an additional 20,000–30,000 companies since the start of the year.
At the same time, companies placing less than 50 tonnes of packaging material on the market have a lighter reporting model since the start of the year.
What is packaging?
Regulations define packaging as disposable or reusable products used to preserve or protect substances or items, ease presentation, or facilitate processing or transport. In addition to sales packaging, types of packaging include multipacks and transport packages.
‘Service packages’ are types of packaging used at a point of sale to pack foodstuffs and other purchases for consumers to take away. They include carrier bags, takeaway food packaging, and other packaging used in service establishments.
Agricultural packaging is types of packaging used to pack unprocessed agricultural and garden products sold directly from a farm.
Now, when a cup of coffee is bought to go or a paper bag is used to carry a new pair of jeans out of a shop, the producers of those packages are their manufacturer or importer, not the businesses that sell them, unless they also manufacture or import them. That is according to a press release from packaging sector service company Rinki.
The Pirkanmaa ELY Centre is the authority tasked with oversight of producer responsibility. The ELY Centre says that the easiest way to fulfil producer responsibility is to join a packaging producer association.
There are two approved packaging producer associations in Finland: Sumi Oy and Suomen Pakkaustuottajat Oy. A company may choose which association to join: Suomen Pakkauskierrätys Rinki Oy (Rinki) can help a company do this. Packaging producer associations charge their members annual recycling fees, which are based on the number of packages the member company places on the market.
Read more about the producer associations and how to join one
To whom does producer responsibility for packaging apply?
The producer responsibility for packaging applies to the following operators which place packages on the Finnish market in a professional capacity:
- packers, that is, companies which pack their products or have their products packed on the Finnish market (excluding ‘service packages’ and agricultural packages)
- importers, that is, companies that import packaged products to Finland
- distance sellers, that is, foreign companies that remotely sell packaged products directly to a Finnish consumer
- manufacturers of ‘service’ or agricultural packages, that is, companies that manufacturer these packages for the Finnish market
- importers of ‘service’ or agricultural packages, that is, companies that import these packages to the Finnish market.
If an operator based in Finland is not VAT-liable, its operations are not considered professional, nor does it bear producer responsibility.
Changes to unemployment security
The qualifying period for unemployment security increased from five days of unemployment to seven at the start of the year. Periodization of holiday compensation has returned. When a full-time employee loses a full-time job that lasted over two weeks, any holiday compensation they were paid stops them from getting unemployment benefit for a time equivalent to the holiday compensated for.
Child supplements are no longer paid on unemployment benefit. When adjusted unemployment benefit is paid, there is no longer an exempt amount, that is, a part of income which is not calculated when calculating adjusted unemployment benefit. These changes will apply from 1 April 2024.
In future, only an employee’s income from insured, salaried work will count towards the entitlement to unemployment benefit. In addition, an employee will have to have been in work for 12 months instead of the current six or so. The changes to what entitles an employee to unemployment benefit will be applied from 2 September 2024.
Tax changes
Income tax
Employees’ taxation will be reduced, with a focus on low and middle earners. The credit for work income will increase. An increased credit for work income for each child will be introduced. In addition, tax credits will be index-linked.
An age-based, increased credit for work income will be reintroduced for people aged 65 and over.
The ‘solidarity tax’ will continue: the upper limit will be increased to €150,000 (from €85,800).
The excess for the travel expense deduction is increasing from €900 (from €750 at present).
The qualifying period for key foreign employees is increasing from four years to seven.
The household expense tax credit is being expanded to include licensed physiotherapy and licensed occupational therapy. The increased credit for domestic and care services is being extended to 2024.
Other taxation
The capital gains tax percentages are decreasing. The tax rate when buying properties is decreasing from 4% to 3%, and for shares in housing associations and other property associations from 2% to 1.5%. The tax rate for other securities (corporate stocks) is decreasing from 1.6% to 1.5%. The tax rate changes will be applied retroactively to 12 October 2023 or to any contractual transfers made after that date.
First-time buyers will no longer be exempt from capital gains tax on housing.
The deposit limit on equity savings accounts rises from €50,000 to €100,000.
The lower rate of property tax on land will rise from 0.93% to 1.3%.
The payment term for inheritance tax will increase to ten years. Unpaid inheritance tax will not be recovered by distraint, will not be used to apply for the taxed person’s bankruptcy, and will not be entered into the tax debt registry until ten years have passed since the first tax due date. The interest charged during the payment term will be the reference interest rate plus 3.5%.
Fuel tax will reduce by almost 4 cents/litre.
Nicotine pouches will be subject to tobacco tax.
The alcohol tax on wine, other fermented beverages, intermediate products and the ethyl alcohol beverage group will increase. However, the tax on wines and other fermented beverages of at most 5.5% alcohol content will not rise. The alcohol tax on beer will decrease.
The forest tax credit will increase to 75% (from 60%).
The smoothing provision for agriculture will increase to €25,000 (from €13,500).