Users say – Tax Administration: the Incomes Register has brought true improvements to processes

6/7/2021

The Finnish Tax Administration is one of the largest of the Incomes Register’s data users. The Tax Administration secures the activities of society at large by collecting taxes and tax-like charges in accordance with the law. For this purpose, the Tax Administration retrieves data about income earners’ income subject to tax from the Incomes Register, as reported by payers.

Even though the Incomes Register Unit, which maintains the Incomes Register, is part of the Tax Administration’s organisation, the Tax Administration has no special role as the Incomes Register’s data user. By law, the Tax Administration has access to the Incomes Register’s data similarly to other user organisations.

The Tax Administration uses the data retrieved from the Incomes Register for determining payers’ employer contributions, such as withholding tax, tax at source and the employer’s health insurance contribution, and for income earners’ pre-completed tax returns. In addition, the data is used in analyses, in the identification of different phenomena and in the investigation of any errors.

Monthly employer contributions are summed up from reports submitted to the Incomes Register to generate payment data made available to employers in MyTax. Everything takes place in real time – after all, data is transferred from the Incomes Register to the Tax Administration’s system on every working day.

– Payers benefit from having real-time data, as we can react quickly to different payer situations, says Päivi Peltomäki, office manager at the Tax Administration.

Corrections are also taken into account: calculations restart every time data is corrected or cancelled. Taxpayers can see corrected results in MyTax on the following working day.

The Incomes Register enables smoother customer service

The Incomes Register has finally given the Tax Administration a real-time view to income earners’ income, which helps in preparing new tax cards, for example. When tax cards were prepared previously, taxpayers needed to provide their payslip information separately; now, data is updated in the Tax Administration’s systems from the Incomes Register through an interface.

– When a person needs a new tax card, the income earner can directly view data about income in MyTax, as reported to the Incomes Register by their employer. Previously, there were problems if there was no payslip. Now, in customer service situations by telephone or at an office, our staff can also see what income data has been submitted to the Incomes Register. The Incomes Register enables smoother customer service, Peltomäki says.

Incorrect data affects the amount of employer contributions

Correct data benefits both employers and income earners. For payers, any incorrect data affects the amount of employer contributions, as the Tax Administration calculates withholding tax and tax at source directly on the basis of earnings and benefits payment report data, while the employer’s health insurance contribution is determined based on the employer’s separate report.

–When it comes to income earners, all data affecting taxable income is naturally important. If data is incorrect, pre-completed tax returns will be incorrect, and taxpayers will have to supplement the data. When data is correct in the Incomes Register, neither taxpayers nor us here at the Tax Administration need to do anything extra.

The Tax Administration supervises the correctness of data using business-related and technical checks. For example, payers and recipients are identified on reports so that data can be matched correctly.

– Our supervisory activities have also improved because taxpayers can now independently access reports submitted to the Incomes Register and identify any non-submitted data. We also supervise regular employers: we know who should submit reports and at what volume, Peltomäki says.

Mandatory data is sufficient for the Tax Administration

The data required by the Tax Administration is primarily mandatory data submitted to the Incomes Register.

– Reporting has become clearer now that data is received from a single place following straightforward schedules. We now have clearly fewer reports and data flows, as reports are no longer submitted directly to the Tax Administration, says Peltomäki.

The Tax Administration can identify one flaw in the data it receives: sensitive data. This is a small data group measured by volume, but it makes the data content incomplete. While this has been registered as a development proposal in the Incomes Register, any progress would require amendments to the law, for example.

– All in all, it’s all going really well, Peltomäki says, summing up the Tax Administration’s views.

In the Users say series, organisations that use the Incomes Register’s data talk about the benefits and challenges of the use of data from their own perspectives.