With the recent decision of the Supreme Administrative Court (Supreme Administrative Court), JYP Jyväskylä Oy will have to shell out approximately EUR 479,000 to the Tax Administration.

– That’s the amount we originally started talking about. Some have been paid over the years, Risto Korpela points out.

These are the taxation of 2012 and 2014, which was addressed by the Tax Administration in the 2016 review. It states that JYP has paid its foreign players signing fees with a 15% withholding tax, even though they should have been subject to income tax.

JYP received some consolation that its appeal was partially upheld when the Supreme Court’s decision overturned previous decisions regarding tax increases and default interest.

– We are talking about tens of thousands of euros, Korpela says.

“Question of interpretation”

According to Korpela, the share of the signature bonus was to be allowed to be 20 percent of the player’s total salary.

– But it is now interpreted differently. The Supreme Administrative Court made the final decision and interpreted, as the taxpayer had interpreted, that the proportion of the signature fee is higher. Consequently, its share was also interpreted as earned income subject to so-called normal tax. This difference between withholding tax and income tax is now paid, Korpela explains.

– This was a question of interpretation as to whether, at the time, the signing fees of foreign players were subject to withholding tax or earned income.

Korpela, who started working at JYP a year and a half ago, specifies that the company has already paid withholding taxes.

– Let’s not miss the picture that we haven’t paid anything.

“Not easy”

The grand total of the equation, which JYP will still have to pay to the taxpayer this fall, will weigh on an economy already plagued by an interest rate pandemic.

Korpela omits to specify the amount.

– It is said that this does not alleviate the situation. The significant amount it is about, of course, he confirms.

– It is an extra expense, but in the board we discussed payment arrangements. They are already in order, which means that the matter is under control.

Right direction

JYP Jyväskylä Oy’s result for the last financial year was a loss of EUR 89,000.

– We would have gotten to the plus side if we had been allowed to play until the end of the season, Korpela reminds the crown of the last league season, which was suspended just before the start of the playoffs.

– We certainly missed one playoff home game and did not receive the League playoff bonus. In addition, there were no playoff bonuses in the cooperation agreements. We also had to close the restaurant, and no revenue came from there.

However, Korpela is pleased that the economy has been cleared in the right direction.

Until a couple of years ago, the company’s operating loss was 407,000 euros. A year ago, the result was a loss of as much as EUR 2,677,000, when it included a write-down of EUR 2.5 million.

– Even before the corona, we made decisions with this starting season in mind that we will play with a cheaper team.

Adjustment?

The regular series is scheduled to launch on October 1 with partial spectator capacity, which will reduce admission revenue. Does it affect players’ salaries at JYP, ie are there any more adjustment measures planned?

– That matter still needs to be carefully calculated. We have to think about what is being done to be able to get through the season financially, Korpela answers.

It is possible that the pandemic will only get worse and not even the current restrictions will be enough. Does JYP last?

– Then you just have to think about all the possible measures to take. We have to adapt as changes may occur, Korpela says.