Former Prime Minister Sanna Marin (SDP) has been forced to defend her use of corporate tax planning rules that she had staunchly criticised before she left Finnish politics and joined the Tony Blair Institute.
Marin has a company together with Tuulia Pitkänen, who was her special advisor during her term as PM. Pitkänen serves as Managing Director of the MA/PI limited company, and owns 10 percent of the firm's shares.
The latest accounts have raised questions from Kauppalehti analyst Ari Rajala, among others, about the tax planning involved in the company's dividend payments.
The outfit's turnover was 665,705 euros in the first six months of operation (the second half of 2023), with profits of 386,720 euros — an operating margin of 58 percent.
Some 24,243 euros were paid in dividends, which is around 7.5 percent of the company's balance sheet. It therefore stays below the level at which taxes are levied at a higher rate.
The lower tax rate applies to dividend payments worth less than eight percent of the company's balance, up to 150,000 euros. That ensures the tax rate is 7.5 to 8 percent rather than the normal capital gains tax rate of 30-34 percent.
Marin criticised tax planning as PM
Helsingin Sanomat's analysis suggests that Marin's company uses the tax perks applying to unlisted companies, even though Marin herself had criticised these perks.
Marin said in February 2023 that there were issues with the taxation applied to dividends from unlisted companies. At the time, she was prime minister.
"We have first and foremost said that we will close off loopholes in the tax system," said Marin. "Taxation overall could rise, but we are not proposing higher taxes for low and middle income workers but rather seeking more tax revenues by taxing property."
The Finnwatch NGO has previously criticised social media influencers for using loopholes in their corporate arrangements.
Finnwatch estimates that the tax advantage conferred by this corporate arrangement could be worth as much as 20,000 euros per year.
Values unchanged
Marin defended her tax arrangements on X, the social media network previously known as Twitter.
"I draw a salary from my company as wages, I do not draw salary as capital income via dividends, and I pay the correct income taxes and pension payments on my income according to the higher limits," wrote Marin.
"Outside of that, dividends are paid separately and taxes are paid according to the tax legislation in Finland. In my view, making Finland's tax system more just is still part of my values and ideological worldview, even though I do work internationally and have my own company."
Marin became the youngest prime minister in the world when she took office in 2019, and became a global celebrity as social and traditional media interest in her career took off.
She resigned as leader of the SDP and as an MP after the last election, when her party finished third and was left out of the governing coalition.
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