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Linnanmäki: Tax haven in the heart of Helsinki

Helsinki's Linnanmäki amusement park has enjoyed significant tax benefits for 40 years. Enjoying super-non profit classification means that the proceeds of the fun park are exempt from business income tax.

matkustajia linnanmäen vuoristoradassa, kierros on juuri tullut loppuun ja ihmiset iloisia
Hair-raising fun on Linnanmäki's famous wooden roller coaster. Image: YLE

The organisation that maintains the park, the Children’s Day Foundation, says that profits are used to finance child welfare programmes. However, the State Auditor's Office believes it possible that the long-term granting of the benefit could be unfairly distorting competition.

There are over 400 comparable super non-profit organisations registered in Finland at present. Public records only indicate the organisation’s name and the year in which the tax authorities granted them relief from business income taxes. The amount of the subsidy in euros is classified information.

The Children’s Day Foundation head, Risto Räikkönen, told the Yle current-affairs programme A-studio that Linnanmäki has received yearly tax benefits of approximately 1.5 million euros.

The amount of benefits given to non-profit organisations are presently being assessed by the European Commission after complaints were made to the body in 2009. Last spring the commission gave a preliminary response indicating that such state subsidies could be forbidden.

15 percent of income donated to child welfare

Linnanmäki amusement park’s turnover has swelled consistently throughout the 2000s. At the same time, the park has been advertising proportional increases in donations to children's welfare.

Last year the Children’s Day Foundation gave some 3.5 million euros to six organisations – all of which are founding members of the organisation – working in child welfare.

However, the sum distributed is only 15 percent of the park’s total revenue, with the largest share of revenue going towards development and investment. Last year 5.6 million euros was sunk to that end. The exception to this high level of yearly investment was in 2010, when only 1.9 million euros were earmarked for such purposes.

Räikkönen says that investment in the future of the park is a necessary expense. He also says that he wants to increasingly bring the park towards having a steady year-round plan.

"Let’s do hard business,” he says, "so that we can keep helping children in need.”

The foundation's head also stated that next season their goal is to donate 3.7 million euros of the park’s profits to help children and families in Finland.

Not all fun and games

Marketing, cleaning and provisions of food and drink are sizable and steady expenses year by year, but according to the park’s management, salaries are the largest expense for the business. Its operations employ over 600 young people per year, particularly in seasonal jobs.

Yet kid-friendly policies can only go so far when the bottom line is at stake – last month the park's management announced the scrapping of cheaper park entry rates for children.

Linnanmäki will open its gates to the public from April 27.

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