Finland

[Changaco]

Email received two days ago:

Hello,

I'm a creator on Patreon, but I would like to use Liberapay as well (ideally I'd move to Liberapay exclusively, but at this point I'm not sure that's a good idea). The main problem with moving to Liberapay is that rewards to supporters don't seem to be allowed. I don't like rewards myself either, but the Finnish law doesn't allow individuals to ask for donations for themselves, so I need to sell something. On Patreon I'm selling early access to my monthly reports about my open source software development work (the reports are later published on my public blog).

Would Liberapay consider granting an exception for us poor Finns who have to suffer the silly law? At least when the reward is only a small token whose only purpose is to make the use of Liberapay not-obviously illegal. (I'm not sure the token reward actually makes my use of Patreon or Liberapay legal, but clarifying that would probably require a court case, and I don't expect anyone to have any incentive to sue me.)

My response:

Hi,

I'm sorry to say that there isn't much we can do right now. Even if we granted an exception to individuals from Finland our platform simply doesn't provide any way of rewarding patrons. Moreover allowing any kind of selling through Liberapay may not be legally possible without first implementing the collection of VAT from EU-based buyers, like Patreon does.

May I copy-paste your message to our public issue tracker for future reference? If not I'll summarize/paraphrase instead.

Their response:

Yes, you may use my message in any way you like.

The lack of support for rewards in the Liberapay UI should not be a problem in my case. I can instruct my supporters to contact me by email if they want the reward. I won't be able to verify that they are actually giving me money, but I don't mind.

If allowing rewards results in legal problems for Liberapay, then that's of course an understandable reason to not grant any exceptions.

[bisqwit]

I am not a lawyer, but I think one can skirt around the problem with Finnish law concerning uncompensated payments (donations) and the stringent regulation thereof by not explicitly asking or soliciting for donations. Rather, it is provided as a question-answer here-it-is style.

Note that token compensations such as badges and stickers still fall in the uncompensated fundraising category in terms of law. The issue with compensations is a different one, and raises questions about entrepreneurship (again, regulated), and indeed taxes as Changaco already mentioned.

[Changaco]

Clearly the problem on our side is VAT. If we could be reasonably certain that we're not obligated to collect it for the kind of transactions in question, then I would have no problem granting an explicit exception to individuals in Finland, and I assume the other co-directors would agree.

[Changaco]

+1 from https://social.coop/@Stoori/99150103837842976

[tanuk]

As @Stoori mentioned in that discussion, individuals with income less than 10k€/year don't need to pay VAT. That seems like a thing that could solve the VAT problem in most cases, although it might get messy if someone starts out with smaller income and then later surpasses the 10k€ mark.

Regarding the speculation that the law could be worked around by careful wording: this blog post (in Finnish) mentions a case where the highest court apparently decided that the lack of an explicit request for donations isn't sufficient for avoiding the need for a fundraising permit. I tried to search for more information about that case, but I didn't find anything.

[Changaco]

The VAT exemption for small businesses is not enough to rid us of the problem. If we were to fall within the criteria for mandatory VAT collection we would have to charge all EU-based patrons, using the tax rate of the patron's country, regardless of who is receiving the money (even non-EU based creators).

[Changaco]

(Also note that the income threshold for VAT exemption is country-specific.)

[Changaco]

Relevant resources I found with a simple web search:

• VAT: businesses supplying digital services to private consumers - GOV.UK
• Telecommunications, broadcasting & electronic services - European Commission

[Changaco]

Also: How does VAT work on Patreon?

[Mikaela]

Copy-pasting my comment from another issue tracker:

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I was just wondering money collection elsewhere and I was linked to what the Police says on it, Arpajaishallinto - Joukkorahoitus ja rahankeräyslaki which has an interesting section in the end:

Aion käyttää kansainvälistä joukkorahoitussivustoa. Tarvitsenko silti luvan?

Rahankeräyslupa tulee olla, mikäli keräys kohdistuu Suomeen. Keräyksen katsotaan kohdistuvan Suomeen silloin, kun lahjoituksia on tarkoitus saada Suomessa oleskelevilta henkilöiltä. Näin ollen esimerkiksi kansainvälisen nettisivuston käyttäminen tai lahjoituspyynnön esittäminen muulla kielellä kuin suomeksi tai ruotsiksi ei vielä tarkoita sitä, että keräys voitaisiin toteuttaa ilman rahankeräyslupaa. Sen sijaan jos lahjoituspyynnöt on selvästi kohdistettu muualle kuin Suomeen, ei kyseessä ole Suomessa toimeenpantava rahankeräys eikä rahankeräyslupaa siten edellytetä.

The beginning translates roughly to "I am going to use international crowdsourcing site, do I still need a permit"?

"Permit to collect money must be had while the collecting focuses on Finland. The collecting is seen as focusing to Finland when it's possible intented to receive donations from people located in Finland."

In the discussion we interpreted this that if issues were opened to LiberaPay and similar to block donations from Finland, it would be legal and OK to use services such as LiberaPay as long as Finns are unable to donate.

What do you think, would this be worth following?

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(end copy-paste)

I don't know if it helps the person who has sent that original email, but do you have plans allowing receivers to block donations from specific countries which seems like it could allow Finnish creators to use LiberaPay for at least receiving donations from abroad?

[tanuk]

Thanks @Mikaela for the very useful information! (I'm the person who sent that original email.) My interpretation of that section on the Arpajaishallinto page is that it's fully legal to use Liberapay in Finland as long as the profile page clearly asks Finnish residents to not donate.

Now that my activity on Liberapay is suddenly legal (after I update my profile page), I can ask the tax authorities whether the donations should be taxed as gifts or income from work...

[Changaco]

In the discussion we interpreted this that if issues were opened to LiberaPay and similar to block donations from Finland, it would be legal and OK to use services such as LiberaPay as long as Finns are unable to donate.

Sounds a little like liberapay/liberapay.com#1102.

[Mikaela]

My interpretation of that section on the Arpajaishallinto page is that it's fully legal to use Liberapay in Finland as long as the profile page clearly asks Finnish residents to not donate.

I am not entirely sure on that, because Liberapay website is full of "lahjoita" (donate) suggestions in Finnish, so I think it would be likely to lose without Liberapay blocking it or saying that the user won't receive donations from Finland.

In the Feneas issue I commented:

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I am not sure, but if they require the country information on LiberaPay donor profile, I think that could be used.

In my opinion common sense would say that if Feneas blocks Finnish people from donating and the people start changing their country once a month without Feneas telling them to do that, it's the same as people went to state treasury contact details page and found the State Treasury IBAN numbers and decided to send money there. I guess in addition to the block the profile could say that donations aren't sought from Finnish users or something like that.

On the State Treasury IBANs, remember the rahankeräyslaki:

Rahankeräyslupaa eivät voi saada valtio, kunta tai kuntayhtymä.

Money collecting permit cannot be received by state/country, municipality or municipal-merger(? I have no idea what this word is in English)

So the difference between acceptable and not acceptable isn't very clear in my opinion, but I am also not a lawyer so I guess it's possible that lawyers or courts would interpret this differently.

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Sounds a little like liberapay/liberapay.com#1102.

I think that would be the solution except that the current issue text is the opposite of situation in Finland 😀

[bisqwit]

I am the primary contributor of the Finnish translation of Liberapay. Feel free to suggest changes to the translation if you feel words like “lahjoita” (lit. imperative of “to donate”) are likely to cause trouble.

[Mikaela]

Since 2019, the Arpajaishallinto page has moved under Poliisi.fi (Finnish Police) and is also available in English. Currently the official English version is:

We intend to use an international crowdfunding platform. Do we still need a money collection permit?
A money collection permit is always required if your donors are in Finland. Your donors are deemed to be in Finland if you are appealing to the Finnish public.

Simply using an international website or making your appeal in a language other than Finnish or Swedish does not mean that you can run your campaign without a money collection permit or without filing a small-scale money collection notice. However, if you are clearly limiting your appeal to an audience outside of Finland and your campaign is deemed not to be taking place in Finland, then no money collection permit is required.