Instructions for the applicant
This guideline applies to grants, which are paid directly to the beneficiary of the grant.
Payment requests for the grants shall be submitted electronically via the Foundation’s grant service, If the grant is not retrieved within one year of its issue, it will lapse, unless there is no other agreed with the Foundation.
The taxation of grants is regulated in the Income Tax Act (1535/1992, TVL) 82 §. A grant which has been received for the purpose of scientific research, artistic activity or studies is tax-free. If the total amount of grants (and equivalents) exceed the amount of maximum annual grant for artists (20 070,64€ in 2015), the surplus income is taxable income (TVL 82 § 2. Subsection).
According to the provisions of the Taxation Procedure Act and the Tax Administration, the Foundation is required to submit a notification of the grants approved per beneficiary to the tax authorities. Grant recipients must follow the regulations concerning the taxation. Further details of the taxation and regulations can be obtained from the tax authority.
Since the beneficiary is not an employee of the issuer of the grant, grants do not provide a social security. The grant recipients themselves must take care of their own and hired staff’s pension contributions, insurance and other matters related to the employer’s obligations during the grant period.
More information on taxation: www.vero.fi
Grant recipients’ social and pension insurance
The social welfare and pension provisions of the grant recipients is structured from 1.1.2009 by the Farmer’s Pension Amendment (22.12.2006/1280). The Act applies to the grants given after the passage of the Amendment. By law, the insurance obligation is held by the beneficiary of the grant, but the provider of the grant has the responsibility of reporting all the receivers of the grants to the Farmer’s Social Insurance Institution Mela. The giver of the grant has no other responsibilities regarding the fees or supervision. The obligation to notify applies to the grants provided for working in Finland, which’ duration period is continuously at least 4 months and the amount of the grant exceeds the minimum threshold.
Practically, of the Foundation’s grants, the insurance obligation concerns grants given to research and the part of the research groups founder’s grants that is used as a grant to individual work. Taking an insurance is mandatory when the conditions are met.
An insurance based on the working grant can be applied through Mela’s online services, when the beneficiary has been informed that he will be receiving the grant and has started working with the grant. The insurance must be applied for the latest within three months of starting the work. The insurance premiums are about 14% of the amount of the grant. Pension insurance contributions are tax deductible.
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