Changes to the data file specifications of direct transfers

Tax Administration Bulletin, 5/8/2018

Payors of pensions

The data file specifications for the direct transfer of the withholding information of resident and nonresident recipients of pensions have remained practically unchanged. The appearance of data file descriptions has changed.

The national Income Register will affect the data flow of payors of pensions in the future; therefore, major changes to data file specifications will be made after the Income Register has been introduced.

Structures and checks conforming to the data file specifications will be in effect in the production environment on 27 September 2018. However, requests must be submitted by 9 November 2018.

Direct transfer of the withholding information of resident recipients of pension

Details of the municipality of domicile of the recipient of pension will be removed:
from positions 91–93 of the request file and
from positions 91–10 of the answer file 

New information: “Insurance number” in position 77–93

Details of the name of the recipient of pension will be completely removed from position 61–90

Pensions and payments, deemed as capital income, which are taxed with a 20 percent increase, will be given the types of payment of their own, which correspond to the payment types of the annual information return:

  • V1 (The payments of pension benefits based on a voluntary retirement pension insurance contract, which are taxed as capital income with a 20 percent increase (The payment in euros will be reported with no increase added)
  • V3 (The payments of pension benefits based on a long-term savings contract, which are taxed as capital income with a 20 percent increase (The payment in euros will be reported with no increase added)

Direct transfer of the withholding information of nonresident recipients of pension

No changes to the content

Payors of wages

Changes to the data file specification concerning the direct transfer of the withholding rate of wages:

In 2019,

  • no distinction between pay from primary employment and secondary employment will be made
  • no freelance tax cards will be issued
  • no tax cards with income scales will be issued 

The seasonal income ceiling (alternative A) will also be discontinued.

Data to be transferred will have only withholding rate for wages, which will facilitate the interpretation of the answer file. Special attention should be paid to the position and decimal conversions of withholding data in the new Data File Specification for direct transfer.

Schedule: Requests for direct transfer of withholding data can be submitted until 31 January 2019.

Key changes:

No distinction between monthly and hourly pay (position 50); the value of the position has been changed from 0 top 3.  The values of the position may be one of the following:

  • 1 = monthly pay
  • 2 = hourly pay
  • 3 = no distinction between monthly and hourly pay

The categorisation value of the request in position 51 may be one of the following:

  • 1 = request for withholding data on non-seafarer’s pay
  • 2 = request for withholding data on seafarer’s income (shipping companies)
  • 3 = request for withholding data on a family caregivers compensation or a foster care provider’s fee and expenses
  • 4 = request for withholding data on pay received from work carried out on ferries in the Åland islands (Government of Åland)

With regard to income from a non-seafarer's secondary occupation, the value is 3; in other words, the same as for a request for withholding data on a family caregivers compensation or a foster care provider’s fee and expenses.

A new value 4 has been added to the data file specification, referring to a request for withholding data on “pay received from work carried out on ferries in the Åland islands” (Government of Åland)

The format of withholding rates and additional withholding rates will be changed to be that of a decimal figure. Previously, percentages were indicated without a separator; for example, 25.5 % was indicated as follows: 255. In the future, a separator will be used; for example, 25.5.

The withholding rates and additional withholding rates for a family caregivers compensation or a foster care provider’s fee and expenses will also be indicated using a separator.

In deviation from the previous practice the income ceiling in position 62–73 will also be indicated using a separator. The previous value will be chanced from eleven to 9.2 (11 > 9.2).

The value for the income ceiling a family caregivers compensation or a foster care provider’s fee and expenses will change from ten to 8.2:een (10 > 8.2).

In position 74 in the answer file, value 8 indicates if the customer has already appealed their withholding. Should this be the case, information on the basic tax-card will not be transferred; instead, the employer is obligated to use a revised tax card provided by the customer.

The following information will be removed:

  • Earned annual income (positions 76–85)
  • Withholding rate for a freelancer’s pay (positions 89–91)
  • Withholding rate for a tax card with income scales (positions 108–116)
  • Taxation municipality (positions 117–119)

To the end of the data file specification, in position 129–140, the following information will be added: “Details identifying the software that generated the notification”. 

In position 53, the following information can be submitted

  • value 1 indicates that the issue involves the payor of benefits
  • value 2 indicates that the issue involves a personnel fund In such a case, the personnel fund must report those employers’ business IDs in the data file specification named “Employers’ ID” (position 37–49), on whose behalf it pays personnel fund units.

Payors of benefit, the whole of the country (mass handover)

The data file specification for notifying the Finnish social security system Kela and payors of insurance indemnities, damages and unemployment benefits (the whole of the country) will be completely removed.

Mass handover of data will be discontinued, as the legal provision on mass handover has been fixed-term, and the time limit has expired.

In the future, payors of benefits may participate in the direct transfer of the withholding information on pay. In such cases, the payor of benefit must identify the person for whom withholding information is requested. Identification is achieved, among other things, by entering a personal identity code in the data file specification (positions 13–23). The Tax Administration wishes that the maximum size of a request file for large masses does not 500 MB.

Other changes

In 2017 and 2018, a restriction on requests for direct transfer has been applied to random employers. The Tax Administration seeks to remove this restriction by the next direct transfer procedure.

Find out about direct transfer in good time

Payors of wages are advised to gain familiarity with the new information included in direct transfer in good time before the payday.  If there are gaps in the information, the payor must request the wage earner to provide a tax card.

The Tax Administration will not send information as direct transfer again after the time limit for direct transfer has expired or if the direct transfer procedure does not return information on withholding rates. In such situations, the payor must require the wage earner to provide a tax card.

For 2019, the “Income ceiling per pay period” choice will be removed

In January 2019, the same choice for the income ceiling on the tax card will still be applied that was used in December 2018. If the customer has provided a revised tax card for 2019, the income ceiling in the revised tax card will be applied. With regard to tax cards that entered into force in February 2019, only tax cards with one income ceiling will be used.

The impact of the Income Register and the future outlook

The Income Register will not be used as an interface for the transfer of revised tax cards; in other words, the Income Register will not bring about any changes to this interface, at the first phase at least. The real time nature of the Income Register is still under construction.

While the Income Register is in operations, the customers are still expected to request a pension taxation rate – in other words, a pension tax card after them they receive a pension decision.

The Tax Administration aims to create an interface that we will be able to use to deliver both to payors of pay and benefits real-time withholding percentages. Furthermore, the aim is to obtain information on decisions on pensions and benefits about to be paid out in an electronic format, whereby we could use automation in the calculation of the withholding rates