Finnish tax authority Vero plans to change the way its income tax card system is operated next year.
Starting in 2019, the country's income tax cards will no longer include separate income ceilings for each payment cycle, which is generally monthly. Instead the cards will have a set earnings limit for the entire year. If a taxpayer earns more than that limit, their employer will be responsible for applying a higher tax rate to their earnings.
At the same time, there will no longer be a separate tax card - and higher rate of tax - for secondary employment. Instead a single tax rate will be applied to all forms of employment during the tax year. Income from secondary employment, or from several employers, will no longer be subject to different rates, and salaries will be paid based on a worker’s annual base tax rate.
Another change coming through next year is that employers will no longer be required to retain a physical copy of workers' tax cards. Employees will only be obliged to show the cards to their employers at the start of the tax year, but they no longer need to be the original documents issued by the tax authority. A photocopy is now deemed to be sufficient.
Vero has advised taxpayers to monitor their annual earnings carefully throughout the year in order to avoid having to pay back taxes if income limits are exceeded. Freelancers and workers receiving income from several employers need to be particularly vigilant, according to Uutiset.
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.
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Finnish tax authority Vero plans to change the way its income tax card system is operated next year.
Starting in 2019, the country's income tax cards will no longer include separate income ceilings for each payment cycle, which is generally monthly. Instead the cards will have a set earnings limit for the entire year. If a taxpayer earns more than that limit, their employer will be responsible for applying a higher tax rate to their earnings.
At the same time, there will no longer be a separate tax card - and higher rate of tax - for secondary employment. Instead a single tax rate will be applied to all forms of employment during the tax year. Income from secondary employment, or from several employers, will no longer be subject to different rates, and salaries will be paid based on a worker’s annual base tax rate.
Another change coming through next year is that employers will no longer be required to retain a physical copy of workers' tax cards. Employees will only be obliged to show the cards to their employers at the start of the tax year, but they no longer need to be the original documents issued by the tax authority. A photocopy is now deemed to be sufficient.
Vero has advised taxpayers to monitor their annual earnings carefully throughout the year in order to avoid having to pay back taxes if income limits are exceeded. Freelancers and workers receiving income from several employers need to be particularly vigilant, according to Uutiset.
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.
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