Service description – OP Light Entrepreneur service

General description of the service

The Service is an invoicing service offered by OP Palvelut Oy (hereinafter ”Service Provider”), which is part of OP Pohjola. The Service offers an alternative to light entrepreneurship invoiced through another company. It is a new-era invoicing service where users are no longer light entrepreneurs without a business ID but light entrepreneurs with a business ID.

The Service provides the User with the possibility to create and send invoices to companies and private persons that are the User's customers. The User sends invoices through a cloud service maintained by a third party. Invoices can be sent via email, in paper copies or as e-invoices.

The Service creates the User's accounting based on the transactions of the customer asset account. The User must direct all invoices sent by them to be paid into the Service's customer asset account. Invoices paid into the Service's customer asset account constitute the income from the User's business activities. The User is responsible for providing the Service with the expenses of business activities without delay, by the end of the tax period at the latest. The User shall record expenses through the Service's user interface and attach a copy of the receipt as a file. The User is responsible for itemising expenses according to the correct VAT.

Accounting shall be conducted on a premium basis. The Service shall file the reports mentioned below to the Tax Administration based on the accounting of receipts submitted to the Service. The User must record the transactions of business activities and their receipts to the Service during the correct calendar year to form the year's accounting in the right manner.

Reports to the Tax Administration based on accounting

When the income from the User's business activities exceeds the YEL limit, the Service helps the User purchase YEL insurance. The User enters their paid pension insurance premiums in the Service as expenses for business activities based on receipts. The Service will take paid pension premiums added to the Service as expenses, and their receipts, into account in reports to the Tax Administration. Pension premiums decrease taxable income.

After the calendar year or financial year, the Service shall provide the Tax Administration with the business tax return based on receipts entered in the Service. Accounting formed by receipts will indicate the taxable income of the User. The Service will deduct prepayment tax from each invoice to the customer asset account based on the tax rate provided by the User. The User is responsible for changing the tax rate whenever required. If the Tax Administration sends prepayment tax bills to the User due to increased business activities or another reason, the User is responsible for paying them.

The Service will settle the prepayment taxes deducted from the User's invoicing to the Tax Administration at the end of the year, or back to the User to pay taxes. Depending on the User's overall taxation, total income and tax rate reported to the Service, the User's prepayment taxes withheld on the Service's customer asset account can be more or less than the business prepayment tax provided by the Tax Administration.

The Service is suitable for all private traders who can use single-entry bookkeeping in their business activities.

Accounting Act, Section 1 a, Obligation of a natural person to keep accounting records

"Notwithstanding the provisions of section 2 of this chapter, a person carrying on a profession or a business shall not be obliged to apply double-entry bookkeeping, where at a maximum, one the following three thresholds was exceeded in previous financial year and the one immediately preceding it: 1) total assets in excess of 100,000 euros; 2) turnover or comparable income in excess of 200,000 euros; 3) average personnel amounting to more than three."

If the User does not have a business ID yet, the Service will help establish one. If necessary, the Service will issue the following notifications to the Tax Administration related to the User's business ID:

Process description

Registration

  1. The Customer identifies themself with strong electronic identification and registers with the Service by accepting the Service's Terms and Conditions and authorises the Service to obtain a business ID if the Customer does not have one yet.

  2. Whenever required, the Service will obtain a business ID for the User with an authorisation from the User.

  3. After the business ID has been granted, the User gives the Service a Suomi.fi mandate.

  4. The User can start invoicing through the Service

Invoicing

  1. The User sends an invoice through the Service (example: €100 + VAT 25.5% = €125.50, VAT 25.5%)

  2. The Service receives a payment on the customer asset account (unique reference number).

  3. The Service withholds a service fee of 5% from the invoiced amount, and a service fee, VAT 25.5% (example: €5 + VAT 25.5% = €6.28, VAT 25.5%).

  4. The Service withholds possible VAT for the invoice on the customer asset account (example: €25.50).

  5. The Service withholds the User's prepayment tax from the invoice's VAT-free amount based on the tax rate provided by the User (example: tax rate 10%, prepayment tax €100 * 0.10 = €10)

  6. The Service pays the difference between the invoice and withheld amounts to the bank account provided by the User (€125.50 - €6.28 - €25.50 - €10 = €83.72).

  7. After these transfers, the monetary transactions of the €125.50 VAT 25.5% invoice is as follows:

a) €83.72 to the account provided for the Service by the User
b) €6.28, VAT 25.5% service fee to the Service's account
c) €25.50 of the User's VAT remain on the customer asset account
d) €10 of the User's prepayment tax remain on the customer asset account

  1. When the VAT return is submitted, the VAT returned to the User is transferred to the User's account.

For the sake of clarity, please note that the Service does not include the following

Pricing, invoicing and customer asset account

You can log into the Service and register as a user with TUPAS credentials free of charge. You can establish a business ID and specify changes in the Service free of charge. Users can also invoice free of charge.

When the User's customer pays an invoice, the amount is entered in the Service's customer asset account. The Service withholds a service fee of 5% + VAT 25.5% from the VAT-free invoice amount. For example, for an amount of 1,000 euros (VAT 0%), the service fee is 50 euros + VAT 25.5% or 62.80 euros (VAT 25.5%). This means that the Service has no fixed fee, but one based on transactions.