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Even Santa needs to pay taxes in Finland

To the outrage of some, the Tax Administration has issued a reminder to freelance Santa Clauses of their obligation to pay income tax on their earnings.

Jultomten i Rovaniemi 2017 dricker ur en kåsa
File photo of Santa Claus. Image: Kaisa Siren / All Over Press Finland

A message from Finnish tax authorities issued earlier this month reminded part-time Santas about their tax obligations, a matter of law which raised heated discussion on social media.

Some wondered whether the tax administration might have more important things to do than hunt down white-bearded, potential tax evaders.

Many families across the country hire a red-suited local to hand out gifts on Christmas Eve and pay the costumed guest.

The Tax Administration's senior advisor Minna Palomäki said the agency regularly receives inquiries about the legal implications of greasing Santa palm for a personal home visit.

"That's why we decided to issue the reminder. It's nothing new, one is not permitted to work off-the-books," Palomäki said.

But starting next Christmas - following major adjustments to the country's tax system in January - families who pay for the cheerful visits will be required to notify the national income registry about how much they paid the ersatz St. Nick.

"The only change is that the payment notification will come from the payer, not the recipient. And all Santas have to do is to check that the details are correct," she said.

The dark underbelly of tax-evading Santas

There are likely thousands of tax-dodging Santas in Finland, according to the president of the country's Santa Claus Association Mika Väkeväinen, who said he thinks only a fraction of the temporary Kris Kringles actually pay taxes on their income for the work.

He said that he doubts the situation will change next year, as well, saying it has become a common custom in Finland not to ask a visiting Santa Claus about their tax declarations.

"Those who want to avoid paying taxes often work anonymously, they answer their telephones with the greeting 'Santa Claus' and arrange their appointments using prepaid SIM cards or use anonymous email addresses," Väkeväinen said.

But some of those secretive practices are also part of maintaining the mystique of their large-bellied roles, he said.

Despite the situation, Väkeväinen said he thinks it was a good idea that the tax office sent out their message about the appropriate way to hire a Santa.

"Of course, their job is to see that everyone pays taxes to the benefit of all, and I don't see why there should be an exception for us Santas," he said.

Santa's secrets

Thor-Fredric Karlsson has worked as a Santa at large company parties and in people's homes since the 1980s.

The last time he visited a home in his red suit was about five years ago he said, saying that he racked up as many as 22 visits on a single Christmas Eve. Back then he said he received 80 euros per visit.

"You earn a humble monthly salary in one day, but that money has to last an entire year," Karlsson joked.

He's plied his trade in Rovaniemi as well as abroad and soon is heading to South Korea where he's scheduled to make a personal appearance for a large company.

He said during his decades-long career visiting homes as Joulupukki, as he's known in Finland, he's never identified himself nor documented payments for his services.

End of Santa's tax avoidance next year?

"Should Santa first dole out the presents and then take off his beard and then write out a receipt?" he asked.

Karlsson was uncertain about whether or not Santa Claus is actually a tax evader.

"Well... If you pay for something that 'doesn't exist,' is it taxable then? The imaginary world and its economic realities don't really have any commonality," he said.

Karlsson confirmed Väkeväinen's assertion that when Santas get together, they never talk about money or taxes, but said the changes at the Tax Administration will affect Santas around the country.

"Yes, Finns are very law-abiding, so it could very well be that things will be different next year," Karlsson said.

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