Automation facilitates the flow of information between companies and authorities
Companies need to spend less time on reporting when the financial data is transferred directly to the authorities through electronic channels. The foundation for new systems is being built as part of the Real-Time Economy project that the Finnish Patent and Registration Office (PRH) coordinates and in which the Finnish Tax Administration actively participates.
Finns already use e-services provided by the authorities on a daily basis but not much information is flowing between the services. However, the data for the pre-completed tax returns in MyTax service comes from many different sources, and it is easy to add the missing information.
There are now plans to ease companies’ statutory reporting obligations in the same manner. At present, they must submit a wide variety of different data to the PRH, Finnish Tax Administration and Statistics Finland. Markku Heikura, Director General of the Finnish Tax Administration, envisions the real-time transfer of data as follows:
“The aim is to make reporting as simple as possible for parties acting correctly and at the same time ensure that the information is correct. Most of the information we need is in digital format and reporting templates have been standardised and structured but the reporting itself is based on the rules that have existed for ages: specific documents must be sent by specific deadlines.”
A joint project is taking us towards real-time data transfer
The Finnish Tax Administration processes about 1,500 million transactions every year and 100 million of them come from the European Union. This work would probably be impossible without automated decision-making based on calculation rules. Heikura compares the transfer of datasets with goods logistics and process automation.
In an ideal situation, data is transferred automatically to appropriate registers in the recording stage. Such a digital economy ecosystem requires long-term cooperation between business operators and the authorities.
Constructing the required information transfer network has been one aim of the four-year Real-Time Economy project of the Ministry of Economic Affairs and Employment. The project is also linked to the more extensive Nordic Smart Government & Business project.
The Real-Time Economy project is coordinated by the PRH, which launched online cooperation with the Finnish Tax Administration two decades ago when the Business Information System was built.
The Real-Time Economy project will conclude at the end of 2024 but implementing the digital ecosystem will require substantial inputs by the Ministry of Economic Affairs and Employment and the PRH and anticipation of the future.
“The Finnish Tax Administration is keeping an eye on developments in the field of business models, and we examine which of these developments are important and how we should prepare for them. For this reason, we have also been able to access the financial data of cryptocurrency actors and users of social media platforms, and to investigate cases of possible tax avoidance. ”
According to Heikura, developing new things is not always a straightforward process but in the end, everybody will benefit: companies’ workload will ease, tax control becomes more effective and business information is made quickly available to partners and the authorities.
Finnish Tax Administration
- Responsible for operating Finland’s system of taxing individuals and organisations
- Helps its customers to manage their tax matters independently and in the correct manner
- Acts in cooperation with domestic and international stakeholders in such matters as the updating of the VAT system (ViDA) planned by the EU
- Allocates the taxes that it has collected to central government, municipalities, Social Insurance Institution of Finland (Kela), parishes and forest management associations each month
- The Finnish Tax Administration has offices in 55 localities and a staff of more than 5,000 (2023).
Original text in Finnish: Päivi Helander
Photos: Nina Kaverinen