Finns will have to say goodbye to big tax refunds in the near future following the introduction of a new national incomes register in January, 2019.
The Finnish Tax Administration has reminded employers that all wages must be reported directly to a national incomes register as of January, 2019.
The incomes register, an electronic database of incomes information, will be adopted in an attempt to reduce the administrative burden of employers by rationalising wage-related reporting procedures. Wages will have to be reported to the database no later than five days after they have been disbursed to employees.
The change will also have an impact on wage earners as it is expected to align tax rates more accurately with earned income, thus putting an end to big tax refunds and back taxes. Small sums of money will continue to move in both directions as wage earners will continue to report commuting expenses and expenses for the production of income to the Tax Administration.
The biggest beneficiary of the change will be Digia, a Helsinki-based software developer that has been selected as the supplier of the incomes register.
The fixed-price software development project is worth an estimated 14 million euros. The maintenance and further development costs incurred over the 15-year contract period, in turn, are expected to rise to 90 million euros.
The incomes register will replace the annual payroll information returns currently submitted to earnings-related pension funds, occupational accident insurance firms, the Unemployment Insurance Fund and the Finnish Tax Administration. Also pension and benefit details will be reported to the incomes register as of January, 2020.
Aleksi Teivainen – HT Photo: Heikki Saukkomaa – Lehtikuva Source: Uusi Suomi
