Finland tax: A new tax reporting and payment scheme to be introduced in Finland as of January 2010Summary
A new tax reporting and payment scheme (tax account) will be introduced in Finland as of January 2010. It is proposed that each tax liable person will, in the future, have a tax account to which the reporting and payments regarding un-prompted taxes, such as VAT, employers' contributions, insurance premium tax and employer's social security payments, will be gathered. In the second stage, which is expected to commence in 2012, the tax account system will also concern other taxes.Background
The objective of the tax account is to give a better overview to the taxpayer of the current situation of payments and taxes. Instead of several due dates, there will only be a single due date per month for payments and for the filing of tax returns.
Taxpayers will fill out the new Periodic Tax Return form for almost all taxes that fall into the category of self-initiated or unprompted taxes. The new Periodic Tax Return form is more comprehensive, and it will also be submitted by households acting as employers. All tax types are paid as a single payment. Hence, the filer-taxpayer should calculate the aggregate sum of the taxes, and may pay this amount as a single transfer of funds to the Tax Administration´s bank account. The due date is the 12th day of the month following the month in question (for VAT second month following the month in question). This is a change from the existing system, which involves several due dates during the calendar month.
Whereas the existing system requires that even the smallest business submit at least one tax return form every month, under the future Tax Account, the frequency of submitting tax returns and making payments may in some cases be extended. This requires that the business is small, and has no history of unpaid taxes or neglected tax returns.
The introduction of the tax account scheme will affect all tax liable entrepreneurs in Finland. The tax payment dates will change, the monthly monitoring return form will be replaced with the so-called Periodical Tax Return and there will be changes regarding the information reported on the new return. In the future, more detailed information will be required, and it is possible that entrepreneurs will need to alter and update their accounting systems in order to be able to fulfill the new reporting liabilities.