The Finnish Tax Administration has reminded employers that all wages must be reported directly to a national incomes register as of January 2019.
According to the Helsinki Times, the database of income information is aimed at reducing the administrative burden on employers by streamlining wage-related reporting procedures. Salaries must be reported no later than five days after they have been disbursed to employees.
But the change is also anticipated to affect wage earners as tax rates are expected to be aligned more accurately with earned income, putting an end to big tax refunds and back taxes. Small sums of money will continue to move in both directions as wage earners continue to report commuting expenses and expenses to the Tax Administration.
Helsinki-based software developer Digia has been selected to build the register in a fixed-price software development project worth an estimated €14 million (US$17 million). Maintenance and further development costs over the 15-year contract period are expected to rise to a total of €90 million (US$111 million).
The incomes register will replace annual payroll information returns that are currently submitted to earnings-related pension funds, occupational accident insurance firms, the Unemployment Insurance Fund and the Finnish Tax Administration. It will be necessary for employers to report pension and benefit details to the incomes register as of January 2020.
Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.
The Finnish Tax Administration has reminded employers that all wages must be reported directly to a national incomes register as of January 2019.
According to the Helsinki Times, the database of income information is aimed at reducing the administrative burden on employers by streamlining wage-related reporting procedures. Salaries must be reported no later than five days after they have been disbursed to employees.
But the change is also anticipated to affect wage earners as tax rates are expected to be aligned more accurately with earned income, putting an end to big tax refunds and back taxes. Small sums of money will continue to move in both directions as wage earners continue to report commuting expenses and expenses to the Tax Administration.
Helsinki-based software developer Digia has been selected to build the register in a fixed-price software development project worth an estimated €14 million (US$17 million). Maintenance and further development costs over the 15-year contract period are expected to rise to a total of €90 million (US$111 million).
The incomes register will replace annual payroll information returns that are currently submitted to earnings-related pension funds, occupational accident insurance firms, the Unemployment Insurance Fund and the Finnish Tax Administration. It will be necessary for employers to report pension and benefit details to the incomes register as of January 2020.
Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.
