Many new entrepreneurs find Tax Administration guidance hard to understandTax Administration Bulletin, 2/27/2019
Based on the results of a survey conducted by the Tax Administration, about half of recently started businesses find it challenging to understand the guidance offered by the Tax Administration. Although the Tax Administration’s taxpayer services and guidance for new businesses is appreciated, a number of respondents hoped to get clearer and simpler instructions, especially on how a small business should deal with its most frequently occurring tax routines.
In autumn 2018, the Finnish Tax Administration conducted a Webropol survey where new entrepreneurs were asked to complete an online questionnaire. We asked about the tax questions that seem difficult, and about what improvements the respondents would like to see in the services offered by the Tax Administration.
The questionnaire was filled in by 650 businesses, of which 617 were self-employed individuals, 27 owners of a newly established limited company, and 6 shareholders of a partnership.
– About one-half of the respondents stated that when their business was at its initial stages, they often had difficulty in understanding the Tax Administration’s guidance. Many respondents wished that the guidance be made easier to understand. A frequent suggestion was to make a checklist for important tax routines. Respondents originating from other countries pointed out that more services should be available in English, says Aulikki Kannala from the Individual Taxation Unit, in charge of services for new businesses.
One important challenge that surfaced was the question of how to deal with the basic obligations of a business taxpayer: how to submit tax returns, and how to request prepayments. Many respondents indicated that they do not pre-pay income taxes, and have not requested the Tax Administration to prepare a decision on prepayments, because their business does not generate enough income. They put special emphasis on the fact that it is difficult to give a good estimate about their future income and prepayments.
Some respondents never ask for guidance
When they were setting up their business, the respondents had sought advice from a number of sources. Almost 40 percent told us that they have not contacted the Tax Administration to ask for guidance in business-related questions. More than 20 percent indicate that they have never used the guidance offered by any public authority, including Local Enterprise Centres, TE Offices, and Centres for Economic Development, Transport and the Environment (ELY-keskus).
Thank you to all respondents
– Most of the respondents in our survey were self-employed operators of a trade or business. We are planning a survey directed towards limited-liability companies as well. Thank you to all respondents. Your answers and suggestions help us improve our new business guidance, says Aulikki Kannala.