“Our owner-customers will continue receiving benefits which are the equivalent of normal OP bonuses and we will not end the bonus programme or stop offering benefits to owner-customers if legislation changes. In order to ensure that we can continue offering the best owner-customer benefits to our customers, we will change our system if legislation changes,” says Harri Nummela, Executive Vice President, Retail Banking.
The OP bonus programme has been active successfully for 25 years, during which time over 3 billion euros worth of OP bonuses have been paid to owner-customers.
OP Financial Group’s opinion and the handling process
The draft act proposes that customer bonuses in the financial sector should be taxable if these are used for things other than the services which initially brought the bonuses. In other words, if you gain bonuses from de-posits, investments and loans and use them to pay insurance premiums, the bonuses would be taxable. If you use the bonuses for your bank service fees, they would be exempt from tax as they are now. As a new element, the amendment proposes that you could use the bonuses to pay the interest on a loan, free of tax.
In the opinion of OP Financial Group, there is no need to change the taxation of bonus programmes in the financial sector, because the current practice does not distort competition.
OP Financial Group will issue its statement on the proposed amendment during the spring. The amendment has been brought about by a motion the Finnish Competition and Consumer Authority (FCCA) made in 2021 to change the taxation of bonuses in the banking and insurance sector and by the government’s aim to create a broader tax base.
If the law proceeds after the consultation round, it will first be handled by the Government and then by Parliament. We are expecting this to take place in autumn 2024. On estimate, if it is approved, the act will enter into force at the beginning of 2025.
OP Financial Group as a corporate taxpayer
OP Financial Group has been one of the largest corporate taxpayers in Finland for several years. In 2022, we paid 227 million euros of corporate tax, and we were the third largest corporate taxpayer. We will also continue being one of Finland’s largest corporate taxpayers in future.