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Finland – Income Tax Filing updates 2020

The Finnish government introduce income tax filing changes to reduce the administrative burden on small businesses and NGOs.

 

Coming into force from 1 January 2020

Reporting to the income register will be made easier for small operators in Finland from 1 January 2020. The Finnish government have agreed changes that will reduce the administrative burden on small businesses and NGOs.

According to the proposal, the deadline for declaring income will be extended in the case of

  • Fringe benefits,
  • Payroll advances,
  • Tax-free reimbursement of expenses or
  • One-off payments of up to EUR 200 from a registered association.

 

In addition, small competition awards no longer need to be entered in the Income Register in 2020 for amounts up to EUR 100. The exception is competition awards for employment or employment.

In the case of benefits in kind, the reduction would mean that they would not have to be the subject of a separate declaration because they would not be paid the same month until the following month. For example, if the January cash payout is partially or fully paid in February and the January benefit is reported as February earnings, the deadline for filing a notice would be March 5th.

 

For payroll advances, a reduction would mean that information on the payroll payable by the employer could be entered in the Income Register at the same time as the payroll payable, provided that the pay was made within the same calendar month. The same would apply, for example, to the salary paid to a shareholder even if the shareholder is not employed by the company.

 

In order to simplify the procedure for reporting information on reimbursement of expenses and reimbursement of expenses, it is proposed that tax-free reimbursement of expenses should be declared no later than on the fifth day of the calendar month following the payment date, instead of the fifth calendar day following the payment date.

 

Late fees introduced in 2021

The introduction of late payment fees in the Income Register will be postponed by one year. The Government proposes that the Tax Administration could impose late fees only for payments due in 2021.

Changes will also be reflected in the income tax reporting guidelines, which will be updated later in the year. The new guidance applies to reporting payouts for the year 2020 and beyond.

 

For further details click here or if you have further queries please get in touch with a member of the Immedis team below.

 

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