Benefits payment data will be reported to the Incomes Register from 2021
Information on pension and benefits income paid after 1 January 2021 should be reported to the Incomes Register. Pension and benefits income are paid by organisations such as pension providers, insurance companies, Kela, State Treasury, and municipalities. The data is reported by submitting a benefits payment report. The payer reports the pension and benefit data to the Incomes Register. The data is reported electronically.
The following forms of pension and benefits income are reported as benefits to the Incomes Register:
- statutory pension
- pension based on voluntary pension insurance
- all taxable benefits
- tax-exempt benefits, which affect basic social assistance paid by Kela
- the following tax-exempt benefits, which do not affect basic social assistance paid by Kela: expense allowance (unemployment benefit), increased expense allowance (unemployment benefit), and expense allowance for when abroad (unemployment benefit)
- payments which the payer must report pursuant to section 28 a the act on inheritance and gift tax (perintö- ja lahjaverolaki 378/1940).
Only payers defined in relevant legislation need to submit a benefits payment report to the Incomes Register. Pensions and benefits, which the payer pays to a person living abroad, must also be reported to the Incomes Register. It does not matter whether the benefit recipient is a non-resident taxpayer or a resident taxpayer.
The benefits payment report will replace the following annual information returns starting from 2021:
- annual information return, itemisation of retroactive pensions (VSTAKELE)
- annual information return on unemployment benefits payment days (VSKORVPV)
- annual information return on the pension or benefits payer's contact person (VSELVYHT)
- act on inheritance and gift tax insurance data (E).
The last annual information returns for this data will be filed for the year 2020.
The benefits payment report will partially replace the following data flows:
- payments paid to non-resident taxpayers (VSRAERIE)
- tax return on self-assessed taxes (If a pension or a benefit is reported to the Incomes Register, the withholding or tax at source collected from it must also be reported to the Incomes Register.)
- annual information return on pensions and benefits (VSELERIE).
The following will still be reported directly to the Tax Administration:
- From the current annual information return on pensions and benefits (VSELERIE)
- F Payment based on long-term savings contract, taxable as earned income
- M Taxable strike pay
- Q1 Pensions based on long-term saving in individual retirement accounts, taxable as capital income, paid every year
- Q2 Long-term savings contract savings paid due to the death of the saver or another person entitled to the savings
- V3 Payments derived from long-term savings contracts, taxable as 20% higher, and as capital income
- V4 Payments derived from long-term savings contracts, taxable as 50% higher, and as capital income
- Z Repayment of statutory pension insurance premiums
- pensions paid by natural persons
- From the non-resident taxpayer's annual information return (VSRAERIE)
- C2 - C8 payment types (interests)
- D1 Other payment (e.g. scholarship, life insurance benefit, etc.)
- D2 Other types of yields on assets saved under a long-term savings agreement
- E1 - E8 payment types (dividends and co-operative surplus)
- P4, P5, P6 and P7 payment types (payments based on a long-term savings contract)
The following are not reported to the Incomes Register:
- such tax-exempt benefits that do not affect basic social assistance paid by Kela, such as maternity allowance, school transport subsidy, or expense allowance paid for participating in rehabilitative work. Exceptions include expense allowance (unemployment benefit), increased expense allowance (unemployment benefit), and expense allowance for when abroad (unemployment benefit), which are reported to the Incomes Register.
- information about a decision on a pension or a benefit having been made: the information is reported when the benefit is paid
- basic social assistance paid by Kela
- supplementary and preventive social assistance paid by municipalities
- disability allowance paid to a person over 16 years of age
- other benefits considered to be sensitive in nature, such as strike pay
- medical expenses and reimbursement of expenses
- grants, scholarships and awards
- compensation for material damage
- loan guarantee for student loan by Kela
- service vouchers granted, for example, by municipalities
- foreign pensions, unless the payer has a reporting obligation in Finland
- traditional life-annuity (benefits received by a retired person out of his/her former property)
- compensation for damages based on a court decision (compensation paid by a private individual, for example)
- a payment based on a long-term savings agreement or other agreement related to investment activities, even if the payment is made by a benefit payer as referred to in legislation.
Data reported in a benefits payment report
Paid pensions and other benefits are reported to the Incomes Register separately for each benefit recipient by submitting a benefits payment report. Each benefits payment report is used to report the data related to one instalment of payments made to one benefit recipient. The benefits payment report can only be submitted by the benefit payer. Employers should report the pensions they pay to their employees by submitting an earnings payment report.
The data to be reported using the benefits payment report is mostly mandatory information. So-called complementary data, which provides additional information related to mandatory data, is requested for certain information and income types.
The following must be reported in the benefits payment report:
- identifying information of the income earner and the payer
- payment date
- earnings period
- technical information of the record, if the data is provided via an interface or upload service
- paid pensions and benefits by income type
When should benefits payment data be reported?
Benefits payment data should be reported no later than on the fifth day after payment of the benefit or pension.
- The payment date is the date on which the payment is available for use by the income earner, for example, available for withdrawal from the bank account. If the payer does not know on which day the payment will be in the income earner's account, the payment date can be considered to be the date on which the money left the payer's account.
- Saturdays, Sundays and other holidays must be counted when determining the fifth calendar day after the payment date, but if the report's due date falls on a Saturday, Sunday or other holiday, the information can be reported on the following business day.
Example: A benefit is paid on 2 January 2021. The payer of the benefit must report the data to the Incomes Register on 7 January 2021 at the latest.
Data can also be reported in advance
Data can also be reported to the Incomes Register in advance (directly when running the payment material, for example). Data can be reported no earlier than 45 days before the payment date. Reporting of data in advance is not tied to the earnings period. Instead, the income can be reported in advance if it is paid to the income earner within 45 days. However, information cannot be reported before 1 January 2021.
Exceptions to reporting deadlines
Unjust enrichments should be reported to the Incomes Register without delay, and in any case no later than one month from the date on which the income was deemed to be unjust enrichment. If income becomes unjust enrichment it must always be reported to the Incomes Register. It does not matter whether the payment is recovered or not.
Correcting an error that has been made in the processing of a benefit may require the consent of the benefit recipient. A benefit may also be changed into an unjust enrichment by judgement ruling of the Insurance Court which revokes or dismisses a previous decision. In some situations, for example when the benefit recipient has died, a new decision on the recovery of a benefit is not issued even if there has been overpayment.
Information on recovery should be reported to the Incomes Register no later than on the fifth day after receiving information on the payer, the amount to be recovered, and on which pension or benefit the sum to be recovered is related to.