Some moderations to Incomes Register reporting as of 1 January 2020

12/27/2019

From the beginning of 2020, new provisions concerning Incomes Register reporting will come into force. The purpose of the provisions is, as agreed in the Government Programme, to solve some of the problems that became apparent with the implementation of the Incomes Register and thus to lighten the administrative burden of small-scale enterprises and civic organisations and activities. The Finnish Parliament has ratified the Government proposal HE 78/2019. The effective date of the legislative changes is 1 January 2020, and these changes will be applied to the reporting of income paid after 1 January 2020.

Tax-exempt reimbursements of expenses can be reported by the fifth day of the month following the month of payment. The payments can be reported using a single report once a month, even if reimbursements of expenses have been paid on several days during the same month. In such a case, the payment date entered on the report must be the latest payment date of reimbursements of expenses.

One-off payments of no more than EUR 200 paid by a registered association can be reported to the Incomes Register monthly by the fifth day of the month following the month of payment. A one-off payment may contain for example wages, non-wage compensation for work, or reimbursements of expenses. A one-off payment is considered to include all different items, such as fees and reimbursements of expenses, paid at the same time to the income earner. A typical one-off payment is, for example, a competition judge's fee that is only paid once. Even though the deadline for reporting has been extended, the one-off payments must be reported to the Incomes Register separately for each payment date.

Fringe benefits can be reported on the fifth day of the month following the month of accrual, regardless of when the cash wages are paid. If cash wages are paid for the month of accrual of the fringe benefit during the calendar month following the month of accrual of the fringe benefit, the fringe benefit can also be reported as income of the calendar month following the month of its accrual. In such a case, the report must be submitted by the fifth day of the calendar month following the month whose income the fringe benefit has been reported to be.

Wage advances may be reported by the same deadline as wages of the same pay period to be paid later if the wages are paid during the same calendar month. In such a case, a separate earnings payment report need not be submitted on the wage advances. The provisions concerning wage advances are also applied to the paid wages of persons in leadership positions and shareholders.

The organiser of a competition does not need to report a competition prize valued no more than EUR 100 to the Incomes Register if the receiver of the prize is not in an employment relationship with the organiser of the competition. The competition prize can be money or goods.

Under section 69 c of the act on income tax (Tuloverolaki 1535/1992), entering into force from the beginning of 2020, 50 percent of the moving and travel expenses paid by the employer to the employee or their family member will be tax-exempt. The change concerns moving expenses that are currently taxable. Out of the moving and travel expenses reimbursed by the employer, the share taxable as earned income, i.e. 50 percent, must be reported to the Incomes Register. The tax-exempt share of the expenses will not be reported to the Incomes Register.

The transition period of late-filing penalties will be extended

The transition period of late-filing penalties will be extended by a year. The Tax Administration imposes late-filing penalties for reports submitted late whose payment date is 1 January 2021 or later. A late-filing penalty can, however, also be imposed during the transition period if the act of neglecting the reporting obligation shows obvious disregard. In addition, the Incomes Register's data users can impose other sanctions.

The Incomes Register instructions will be updated according to the legislative changes.

Read more (in Finnish): Hallituksen esitys eduskunnalle laeiksi tulotietojärjestelmästä annetun lain, verotusmenettelystä annetun lain 15 §:n ja tuloverolain 64 §:n muuttamisesta HE 78/2019 (eduskunta.fi)