Once a popular way to enjoy escape rooms, using cultural benefits as payment for the thrilling experiences is now a thing of the past. The sudden change has left escape room businesses feeling unfairly targeted. The Finnish Escape Room Association has engaged a law firm to explore potential avenues to address this issue. The discontent stems from the recent decision that employers can no longer pay for escape room services using cultural benefits. This shift was first announced by the cultural benefit payment provider Epassi to escape room businesses in the spring, stating that games would no longer be eligible for payment using their services starting in early July. Similarly, Smartum, owned by Epassi, also removed escape rooms as eligible services. Another major payment provider, Edenred, confirmed to YLE that they would also be excluding escape rooms from cultural benefit usage.
The reason cited for this change by Epassi was a reminder from the Tax Administration that cultural benefits should not be used to pay for escape room games. According to the Tax Administration, there has been no change in guidelines; rather, it was a specific reminder. They clarified that utilizing cultural benefits for escape rooms was never permitted. Tero Määttä, a leading tax expert at the Tax Administration, emphasized that there has never been guidance allowing the use of cultural benefits for escape room activities.
The Tax Administration had already communicated to payment companies like Epassi and Smartum in January 2021 that escape room games were not eligible for cultural benefits. The message urged companies to update their guidelines to prevent these services from being paid for with tax-exempt cultural benefits. However, expanding the scope of cultural benefits to cover a wider range of recreational activities would require an amendment to the Income Tax Act. While the Ministry of Finance conducted a study on this matter in 2022, no legislative changes have been proposed thus far.
Without explicitly listing which cultural activities are excluded from the benefit, the Tax Administration responds to inquiries from service providers seeking clarification on eligible uses. Niklas Löfgren, the CEO of Epassi Finland, highlighted the annual dialogue between the Tax Administration and payment providers like Epassi and Edenred to ensure compliance with guidelines. He explained that following a meeting, a reminder from the Tax Administration prompted the removal of escape rooms from their network.
The lack of direct communication from the Tax Administration has left escape room businesses puzzled. Companies like The Great Escape in Kajaani received information solely from Epassi, while Edenred did not issue any notifications. Business owner Olli Kähkönen expressed surprise at the Tax Administration’s approach, as his company had accepted cultural benefits as payment for eight years. The sudden change means re-educating customers on the new policy regarding escape rooms.
Vera Kovaleva, CEO of Amazed Games in Helsinki, voiced her dissatisfaction with the classification of escape rooms as not culturally relevant. She questioned why activities like guided artistic courses qualify as cultural while elaborately scripted escape rooms with actors are excluded. Kovaleva emphasized that the cultural benefit played a significant role in driving sales for escape rooms, making the impact of this decision potentially devastating in the current economic climate.
In response to the situation, Kähkönen is open to joining other escape room businesses in exploring potential actions. He anticipates that the true impact of removing cultural benefits will become evident within a year, revealing how many customers had chosen their experiences based on this payment method. The uncertainty looms over the industry as businesses navigate this abrupt policy shift and its implications on their operations and revenue streams.
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