Finland Examines Options For Tax Revenue Increases
Finland has been looking broadly at measures to increase the country’s tax take post-COVID, and at ways to increase compliance in a number of areas.
Earlier this month, for example, the Finnish Government published a report which explores the economic and fiscal consequences of the COVID-19 pandemic for Finland and considers what taxes could be increased to help restore the public finances.
The report observes that Finland already has one of the highest tax burdens in the world, especially on labor. Therefore, raising taxation poses the risk of damaging Finland’s competitiveness, it warns, but goes on to identify certain tax areas in which there is scope for revenue increases without threatening the economy.
These, according to the report, are: property taxes (which tend not to be economically distortive and affect largely wealthier taxpayers); corporate tax (where there is scope available to reduce the tax advantages of unlisted companies); environmental taxes (with the taxation of fossil fuels increased further); and value-added tax (maintaining a focus on reduced VAT rates rather than the standard rate).
The Finnish authorities also took the opportunity recently to remind sharing economy platforms that they must report details of ride sharing and rental activities from 2021.
New rules state that the reporting obligation applies to passenger transport and property rental services when arranged via an intermediary. In the case of accommodation, the obligation applies when a property is partially or fully rented out, and all such platforms are required to report to the tax authority in electronic format on an annual basis.
According to the tax authority, the first reports, relating to 2020 revenues, must be submitted by January 2021; this slight delay will no doubt come as a relief to providers of sharing economy services, which will first need to concentrate on securing custom again on which to pay tax, of course!
For more information on this, and other topical international tax matters, please visit: https://www.cchgroup.com/roles/corporations/international-solutions/research/global-tax-weekly-a-closer-look