finnish tax administration annual report 2015 · 14 finnish tax administration 2015 happy staff...

FINNISH TAX ADMINISTRATION

ANNUAL REPORT 2015

Anna-Leena Tielinen, Educational Planner, Tax Collection Unit

“We have great people working at the Tax Administration and you al-ways get help from colleagues. It is very good that people want to renew themselves and do things ever better. I also like the fact that the em-ployer is positive to reconciling work and leisure. Great place to work!”

Finnish Tax Administration’s publication 350ev16May 2016

Graphic design:Markkinointitoimisto Kitchen Oy

Photographs:Nina Kaverinen

FINNISH TAX ADMINISTRATION

ANNUAL REPORT 2015

TAX ADMINISTRATION IN BRIEF

THE FINNISH TAX ADMINISTRATION 6

OUR EMPLOYEES 7

ENHANCED OPERATIONS THROUGH E-SERVICES 8

TAX REVENUE AND BREAKDOWN BY TAX RECIPIENT 9

MESSAGE FROM THE DIRECTOR GENERAL 10

SKILFUL STAFF INVOLVED IN CHANGE

TOMMI KÄMPE: HAPPY STAFF WORK WELL TOGETHER 13INFO Good workplace atmosphere is a strength

ESSI TEPPOLA: CREATING OPPORTUNITIES FOR ON-THE-JOB INSTRUCTORS 17INFO Training as support for work

SANNA SAVOLAINEN & LAURI TUOMARLA: DIFFERENT LOCATIONS, SAME ROUTINE 21INFO New ways of working

ANSSI IMMAISI: TALK TO EACH OTHER 25

VISION 2025

NET REVENUE OF TAXES TOTALLED €55.1 BILLION 29

DEVELOPMENT OF TAX REVENUES 2015 30

BREAKDOWN OF NET REVENUE BY SOURCE 31

EUR 55.1 BILLION IN PUBLIC SERVICES 32

UNPAID TAXES TOTAL EUR 4.4 BILLION 33

EFFICIENCY IN FISCAL ADMINISTRATION WORK 34

FINLAND’S VAT GAP IS SMALL 35the VAT gap in European Union member states in 2013

TAXATION UNITS 37

CORE PROCESSES SUPPORT THE CORE TASK 38

THE TAX ADMINISTRATION MANAGEMENT GROUP 39

NUMBER OF STAFF INCREASED ACCORDING TO PLAN 40

STAFF IS MORE EDUCATED 41

THE MINISTRY OF FINANCE GUIDES OUR OPERATIONS 42

STRATEGISKA PROJEKTEN 2015 43

LEGISLATIVE AMENDMENTS IN 2015 45

DEVELOPING OUR E-SERVICES 46

COMBATING THE GREY ECONOMY 48

ACTIVE INTERNATIONAL COOPERATION 49

TAX COMPLIANCE GIVES INCREASED REVENUE 50

billion

THE NET REVENUE OF TAXES

RESULTS OF THE TAX YEAR 2015 TAX ADMINISTRATION OPERATIONS

55.1euro

OUR EMPLOYEES THE FINNISH TAX ADMINISTRATION

TAX REVENUE AND BREAKDOWN BY TAX RECIPIENTENHANCED OPERATIONS THROUGH E-SERVICES

MESSAGE FROM THE DIRECTOR GENERAL

6 FINNISH TAX ADMINISTRATION 2015

Watch the video

Building trust. Working together. Embracing New Ways of Working.

The Tax Administration’s reputation and results are among the best in the world.

Our goal is to collect the right amount of taxes at the right time to enable society to function.

To safeguard the revenue stream by provid-ing proactive guidance and good service as well as through credible tax control.

Our goal is to have customers handle tax-re-lated transactions independently and in the correct manner.

In 2015 tax recipients received over EUR 55 billion in tax revenue.

Tax gap to shrink considerably

Taxpayers to meet their liabilities in full

Smooth and effective processes

Competent and motivated employees

STRATEGIC OBJECTIVES SUPPORT OUR MISSION

VISION 2025 OUR VALUES

Tax Recipients’ Legal Services Unit

Central Tax Board

Board of Adjustment

Grey Economy Information Unit

IT Services

Communications Unit

Executive and Legal Unit

Administrative Unit

DIRECTOR-GENERAL

Internal Auditing Unit

OUR ORGANIZATION

INDIVIDUALTAXATION

UNIT

CORPORATIONTAXATION

UNIT

TAXCOLLECTION

UNIT


of Tax Administration employees would recommend the workplace to their

friends (VMBaro 2015)

of staff are happy with the employer’s reputation (VMBaro 2015)

LEVEL OF EDUCATIONSATISFIED EMPLOYEES

menwomen

GENDER DISTRIBUTIONSTAFF

persons

PERSON-YEARS

AGE DISTRIBUTION

15–24

25–34

35–44

45–54

over 54 The average age of retirement years months

The average age of retirement in central government 63 years 10 months

PEOPLE STAY AT THE TAX ADMINISTRATION FOR A LONG TIME

OUR EMPLOYEES ACROSS FINLAND

outside the Helsinki capital region

in the Helsinki capital region

3,561 people

1,528 people

Age, years

25%75%5,089 4,877

64 6

70%

30 % 75%

71%

8%Not known

5%Basic education

1%Postgraduate

34% Lowest tertiary

17% Bachelor’s or polytechnic

12% Upper secondary

23% Master’s


TOP 5 VERO.FI PAGES

Tax card guidance

Credit for domes-tic expenses

Travel allowance, tax-exempt per diems

Income Tax Return guidance

VAT Tax Return guidance

TAX.FI

VISITS TO TAX OFFICES

TAX CARDS ORDERED VIA TAX CARD ONLINE

INDICES OF PRODUCTIVITY AND COST-EFFICIENCY 2015–2015

Productivity Efficiency

Productivity Index describes result in proportion to investment.Efficiency Index describes the total cost of work. The lower the index is, the better.

* due to changes in taxpayer classification in the statistics, indices 2005–2011 do not fully compare with 2012–2015)

150

140

130

120

110

2005

100

90

80

70

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

3 million more visits than in 2014

2005* = 100

TAX CARDS REQUESTED AT TAX OFFICES

visits to the tax.fi website in 2015

number of visits

1

2

3

4

5

1,528,000

281,000

632,500589,800406,800

+7.3%

–6.1%

–10%


REVENUE FROM DIFFERENT TYPES OF TAX

* Other taxes: employer’s social security contribution, gift and inheritance tax, transfer tax, tax on insurance premiums etc.

VAT

Individual income tax

Corporate income tax

Other taxes*

Real estate tax

BREAKDOWN OF 2015 NET REVENUE BY TAX RECIPIENT MUNICIPALITIES

KELA* PARISHES

STATE

billion

THE NET REVENUE OF TAXES

Growth on the previous year 2.1 %

Statistics on tax revenue 2015

6.5% 1.9%

39.5%52.1%

euro

* Social insurance institution

(in Finnish only)

he purpose of the Tax Administra-tion is to collect the right tax at the right time, so as to ensure our society has the financial resources it needs to function. It is for this reason that we seek to minimise the tax gap through credible tax control; and it is why it is important to maintain a culture of tax compliance, by impressing on people the importance of taxation to society.

T



e have done well at our task. Revenues have continued to increase, and we were able to pass on a total of more than €55

billion in tax income. Finland has one of the smallest tax gaps in Europe. Finnish tax compliance is high – almost everyone believes it is important to pay their taxes, and three out of four people feel that they get a good return on what they pay.

Our success is thanks to the skill of our staff, who enjoy a more visible presence on the pages of this revamped annual report.

HEALTH LEADERSHIP FOR PRODUCTIVITY AND WELL-BEING AT WORKA few years ago, we challenged ourselves to change how we operated and our working culture. We want-ed to improve well-being at work and reduce ab-sences due to illness. A wide range of measures

has delivered positive results. The VMBaro survey shows that our job satisfaction keeps rising. Lead-ership and atmosphere are central to well-being at work, and our employees’ appraisal of these has im-proved considerably during the past couple of years. Absences due to illness are also on the decrease, and long-term absences in particular have declined significantly.

CHANGE TAKES US FORWARDAround 5 percent of our staff will retire between 2016 and 2020. Our challenge is to make sure that their knowledge is passed on to the next generation. As a result of the adoption of our new off-the-shelf tax software, many of our current tasks and proce-dures are being overhauled. Some will be automat-ed, but those that remain will become more diverse and will require broader and at the same time deep-er knowledge. We are also remodelling our methods: new possibilities for our operations and leadership are being opened up as a result of our no-paper pol-icy, our nationwide work queues, our open-plan of-fices and our embrace of telecommuting.

We offer support for skills development, and we in-vest in staff training. A variety of online training offer-ings and the extensive use of video materials have made it possible for staff to participate in training re-gardless of where they work.

OUR VALUES INFORM OUR ACTIONSAt the beginning of last summer the Tax Adminis-tration adopted a set of new values: building trust, working together and embracing new ways of work-ing. The shaping of these values was a lengthy pro-cess in which every Tax Administration employee could have their say.

Our values have an important role in everything we do — especially in the numerous changes we face during the coming year. This year is remarkable not only for the introduction of the new taxation soft-ware, but also for the transfer to the Tax Administra-tion of assessment duties from Customs Finland, to-gether with the personnel responsible.

EFFORTLESS CUSTOMER COMMUNICATIONE-services have been under constant development at the Tax Administration. During the past year, we received several awards for our development of dig-ital services. We opened the Tax24 online service in order to reduce the need for customers to visit tax of-fices in person and make phone calls. We also start-ed work on the MyTax service, which will replace the bulk of our current e-services.

We want to work by focusing on the taxpayer and improving their experience. Our target is effortless e-services — so that our customers can manage their tax affairs independently, easily and cheaply.

WMESSAGE FROM THE DIRECTOR GENERAL

CREATING OPPORTUNITIES FOR ON-THE-JOB INSTRUCTORS

HAPPY STAFF WORK WELL TOGETHER

TALK TO EACH OTHERDIFFERENT LOCATIONS, SAME ROUTINE


Tommi Kämpe started working at the Tax Administration in the autumn of 2015. The new Administrative Direc-tor does not need to think twice when asked whether he advocates the stick or the carrot. A working community does best when people are trusted and directors move out of corner offices and understand what their employees do every day, so that they can pick up the atmosphere and feel involved.

We succeed by building partnerships and working together. We value each other’s ideas, skills and expertise.

FOR OUR EMPLOYEES

We work together as a team, allowing us to achieve excellent results.

We help each other to succeed. We pool knowledge, expertise, information and best practice. We are receptive to other’s ideas.

We all have a part to play in making our working environment both welcoming and inspiring.

14 FINNISH TAX ADMINISTRATION 2015 HAPPY STAFF WORK WELL TOGETHER

already felt that the Tax Administration was an attractive organisation. I was pleasantly surprised when I started working here: my

conception of it was true. The organisation is mod-ern and the services work well. People are positive about development and that really shows.”

As the Director of the Administrative Unit, Käm-pe and his team manage services relating to hu-man resources, finance, premises and security. The best thing about his new job is the view of the en-tire organisation that it gives him, including the op-portunity to meet people across Finland. The satis-faction of the personnel is important to Kämpe. He firmly believes that each employee wants to suc-ceed at their job.

“Satisfied staff work together by dealing with dai-ly situations and problems by themselves, without anyone else having to get involved. I don’t think it’s a manager’s job to solve small everyday problems, but to make sure that the team can keep working six months or two years later. If I spent all my time tinkering, I would be wasting it.”

Kämpe believes that making decisions on their own turf motivates people. In fact, one of the best aspects of the Tax Administration is its coopera-tive culture. Decisions are made at the appropriate

level, not passed higher and higher up the organ-isational ladder. Different ways of working are al-lowed and mistakes are accepted. Such a culture requires changes in everyone’s day-to-day attitudes and behaviour.

“In practice, this means that decisions that you personally wouldn’t take yourself must be allowed. If there isn’t really anything actually wrong with a decision, it must not be corrected or condemned.”

A GOOD RESULT IN THE JOB SATISFACTION SURVEY Soon after he started working, Kämpe got to see the recent results of the VMBaro staff survey. The figures for the Tax Administration are better than average for government organisations, but Kämpe thinks they should primarily be compared against its own figures for previous years.

“Our figures have been improving slightly each year, which of course is fantastic. It is good that there has been positive development in all sectors over the past five years. The fact is that big leaps don’t really happen in an organisation with 5,000 people.”

Kämpe doesn’t see applying metrics to the organ-isation as a necessary evil but rather as an oppor-

WORKING TOGETHER

VALUE

”I


tunity to listen to signals from employees at unit and operational unit level.

“We don’t measure well-being at work just for the sake of measuring. If the results show cause for con-cern, they are taken seriously and we have a mech-anism for dealing with problems. I look at VMBaro as a genuine tool to help develop the organisation, and it gives us the chance to hear what the staff have to say.”

The Tax Administration is currently often used as an example of a public organisation that has suc-ceeded well both in performing its tasks and in over-hauling itself. Such success builds expectation for the future.

“How can we organise our work so that we will still be held up as an example ten or twenty years down the line? Our aims must be set high and digitaliza-tion must be mastered fully. We are not striving for a better yesterday — we’re reaching out and embrac-ing new ways of working. I think this already shows amply in our everyday work. The people here want

to develop both themselves and the functions of the organisation. That is very positive.”

The organisation is large and offers plenty of op-portunities for everyone who works here. If you want other tasks or simply need a change of scenery, the Tax Administration often has jobs that can provide a completely new perspective. This can be refresh-ing and inspiring.

Regardless of what they do, staff must have the desire to change the way they do it.

“Nowadays, nobody’s tasks remain the same from the start of their careers to the end. This is a place that brings old and young generations of employees together, and I think everybody needs to look them-selves in the mirror. Everybody needs to adopt an open attitude towards change, because our ways of working together change constantly, as do the ways in which we serve our customers. The changes are so manifold that there can be no hope of success unless you are willing to change your own routines and ways of working.”

ANNA-LEENA TIELINEN, EDUCATIONAL PLANNER, TAX COLLECTION UNIT“We have great people working at the Tax Administration and you always get help from colleagues. It is very good that people want to renew themselves and do things ev-er better. I also like the fact that the employer is positive to reconciling work and leisure. Great place to work!”



The Tax Administration launched a new set of values in the spring of 2015. All employees were invited to participate in defining the values, and through many discussions and web-based brainstorm-ing we received more than 2 000 ideas for new values. Among these ideas, the Board of Directors selected three values that support and complement each oth-er and are integrated in all work and de-cision-making: Building trust, Working to-gether and Embracing new ways of work-ing.

Still, only

hold the opinion that the values are implemented

of staff find the new values clear and understandable (VM BARO2015)

The VMBaro survey is a management and devel-opment tool that measures satisfaction at work, and is used to monitor the state and develop-ment of the work community. The results of the barometer indicate what needs to be improved and where progress has been achieved.

According to the results, our strengths lie in reconciling work and private life, fair treatment from colleagues and managers, the challeng-ing nature of work, and support from managers. There is room for improvement when it comes to salaries, the usefulness of performance and de-velopment conversations, the openness of the work community, and realisation of the Tax Ad-ministration’s values. In almost all areas, the Tax Administration’s results are better than the gov-ernment average.

As many as 76 per cent of Tax Administration staff replied to the VMBaro survey in 2015.

of staff appreciate the Tax Administration as an employer(VMBaro 2015)

INVESTING IN EMPLOYEE SKILLSEmployee skills refer to the will and ability to act constructively in the work commu-nity in a way that is supportive towards one’s manager and co-workers. In 2015 employee skills were highlighted as a way of improving well-being at work. They were a theme of dis-cussion in all units during the year and both managers and staff were encour-aged to further de-velop the topic through web cours-es and group dis-cussions. The ma-terial that was gath-ered during the year will be utilised to im-prove wellbeing at work over the next years.

Payroll

2.95

Support for personal development

3.34

Management and leadership

3.58

Job content and challenges

3.7

Workplace atmosphere and cooperation

3.85

Information flow

3.26

Physical environment

3.77

Employer image

3.57

THE JOB SATISFACTION SURVEY AT THE TAX ADMINISTRATION

Scale 1–5

3.433.52

JOB SATISFACTION AT THE TAX ADMINISTRATION VS IN STATE

GOVERNMENT IN GENERAL

VALUES: BUILDING TRUST. WORKING TOGETHER. EMBRAC-ING NEW WAYS OF WORKING.


39%61%


Fifteen years ago when Essi Teppola had recently graduated from commer-cial college, she ran into her friend’s aunt at the local library one day. The aunt suggested that Essi might look for work at the Tax Administration. This surprised Essi. It was something that had never occurred to her before. Today, she couldn’t imagine working anywhere else because she works for a large employer with great opportuni-ties for further development.

had just started living in Tampere and I was 22. I called the Tax Administration’s central switchboard and asked if they could put me

through to someone who would talk to somebody looking for a job. The switchboard put me through to a manager whose name I forget. I asked him direct-ly if he could give me any work. A couple of weeks later a temporary vacancy arose because someone was going on leave. That’s how my career started with the Tax Administration fifteen years ago.”

”I


Essi’s normal work is registering new business tax-payers, entering their details into the Tax Administra-tion’s database. Customer service is also part of her job. In addition, she gives tax guidance at events at educational institutions, on army bases and in local marketplaces where the Tax Administration reaches out to people who sometimes aren’t even aware that they need to learn more about tax.

EMPLOYER SUPPORTS FURTHER STUDY Essi likes her job, but she has a dream. She wants to study tax law at university and earn a Master’s De-gree. She plans to graduate from the University of Tampere in a couple of years. It would not be possi-ble for her to pursue her academic studies and con-tinue working if her employer did not support her.

“Yes, it has been important that my colleagues and superiors have had a positive and helpful atti-tude toward my studies. There have never been any difficulties arranging to attend university lectures oc-casionally. I have permission to be absent for a few hours during the day, but I’m expected to make up the lost hours later in the evening. In fact, I don’t mind working late at the office when everyone has left and it’s quiet.”

TRAINING PROGRAMS HELP TAXPAYERS People with longer careers have seen a great many changes in the workplace. Right now an important one is coming: the Tax Administration is moving to a single software platform which will replace the cur-rent assortment of self-developed programs and ap-plications. As the IT system is overhauled, a lot of es-tablished routines are becoming unnecessary.

“This major change does not feel like such a great leap because we are going to roll out the new soft-ware over a number of stages. Employees have al-ready received a lot of instruction. They are using self-study videos and taking part in classroom ses-sions. We have been making test registrations in the new system and running demos that generate letters automatically to send to taxpayers.”

Nevertheless, it is going to take a long time to learn to use the new system properly. We must be bold and not afraid to experiment. The immediate im-pact of the new IT system will be to transform the way we work at the Tax Administration. This will soon start helping taxpayers too, as new tools assist them in understanding their tax assessments better than was the case before.

Essi Teppola enjoys the variation of her tasks.


We want to improve. We work together with boldness and determination to over-haul our operations and develop new ser-vices. We keep up with the latest develop-ments and seek to follow a path of contin-ual improvement.

FOR OUR EMPLOYEES

We reimagine how we do things to keep apace with the world in which we operate.

We put a premium on professional skills and work to develop them in order to meet our needs going forward.

We use the very latest tools, workspac-es and methods and deploy them in fresh and innovative ways. We inspire one an-other and feel free to experiment with new ways of working.

NIKO RAUTIO, PERSONNEL MANAGER, INDIVIDUAL TAXATION UNIT“One of a manager’s most important tasks is compe-tency management. To that end the Individual Taxation Unit has set clear targets for leadership and manage-ment, and there is a wide array of courses for all man-agement roles. Our aim is that all our managers adopt a coaching and innovative leadership approach that fosters success. Their work is strongly based on trust and cooperation.”


“For everyone who works in tax, one of the most useful skills is being able to see the big picture. One thing can often have a great many important reper-cussions. I enjoy my work because it allows me to look at taxpayers’ problems in a variety of different ways and identify the approach that is best suited to the specific case. I already know the most typical problems that our taxpayers face. When I give guid-ance, I know what points to emphasize.”

EMPLOYEE AMBASSADORS Essi is not just a dreamer, however. If an opportuni-ty arises, she goes for it.

“I was halfway through a customer service shift when I noticed an Intranet message encouraging staff to become employee ambassadors. I began fill-ing out the application form immediately. I complet-

ed the fields one by one between serving the taxpay-ers coming to my desk. It occurred to me that I was already doing the work of an employee ambassa-dor. Participating in the ambassadorship programme would be a great way to hone my skills.”

What plans does Essi have for the future? In a few years, after gaining her Master’s Degree, will she leave the Tax Administration and start working for another employer?

“I have worked for the Tax Administration for a long time. I think it’s almost part of my identity. I love working with the people I work with, and I have no intention of leaving! I’ll definitely continue work-ing here for 30 more years. I don’t have any other plans. The workplace will keep changing. My strat-egy is to embrace each change in a positive way.”

VALUE

EMBRACING NEW WAYS OF WORKING



Training Video Clips have been viewed

times

TOP TRAINING COURSES 2015, CLASSROOM

Tax auditors’ annual conference

Overhaul of the Palkka.fi e-Service

Using the new forms and instructions for Inheritance and Gift taxation

Intranet based training sessions and video lectures give staff the same oppor-

tunities to take part wherever they are in Finland.

TOP TRAINING COURSES 2015, INTRANET

How to arrange a hearing

Introduction to tax as-sessment of individuals in cross-border situations What you should know about Performance Appraisals

In 2015, more than

instruction sessions were arranged for staff, and more than

credits were awarded to participants

of our staff have worked as instructors for on-the-job training schemes

1

2

3

1

2

3

80035,000

314,613 20%

Intranet training sessions were held for

participants

669,607



Sanna Savolainen manages a small control team. The team’s focus is on guiding the corporate income tax pro-cess. Sanna works just off the market square in Kuopio, while team member Lauri Tuomarla is based in Helsinki. Previously, you would catch your man-ager in the hallway — now you send them an instant message online.


y team’s work would get nowhere if we didn’t have these new tools at our dis-posal”, says Sanna. “All the members

of my team are in Helsinki, as is my own manager.”In the mornings, as their computers are switched

on across Finland, all the team members have a clear common purpose. Each of them takes care of their own area of responsibility, calling on the skills of the others when needed. First thing in the morn-ing, Lauri looks through his emails and tries to re-member to check the Tilt info for any technical dis-turbances. Sanna meanwhile checks her calendar and decides whether she can attend the day’s tele-phone conferences from at her desk or if she needs to book a room.

“I know what the people at the other end of the conference call look like. I know their tones of voice, so I think hearing them is almost the same as see-ing them. My own team has become very familiar to me”, Lauri says.

Sanna and Lauri can’t enjoy coffee breaks with their team, and laughing at jokes that their col-leagues crack often requires turning on their mi-crophones in phone meetings. Showing up for work everyday is nevertheless straightforward enough.

”M

DIFFERENT LOCATIONS, SAME ROUTINE

BUILDING TRUSTTrust and transparency are central to what we do. We collect the right tax at the right time in order to fund public services.

FOR OUR EMPLOYEES

We operate in a way which is open, consistent and fair.

We know when to delegate and when to take responsibility; we keep our promises.

We trust in each other’s abilities.


possible to work from home at any time — even evenings — but that shouldn’t be the default”, says Lauri.

In Sanna and Lauri’s case, where the work is done is almost immaterial: the distance between the team members is in any case about 400 kilometres.

“I telecommute from home especially on days with a lot of phone meetings. Instead of booking a room at work, I attend meetings from my couch or my kitchen table. In the afternoon, I can close my laptop and take a walk with our dog Otto. We have very good opportunities for reconciling work and free time, and I think that a certain freedom of choice re-flects positively upon our results”, Sanna says.

Lauri elaborates. “If you need to go somewhere near your home during the day — say you have to take your child to the doctor’s — you can save as much as two hours by working from home that day. Saving time is worthwhile from everybody’s perspec-tive”, Lauri continues.

”Although lots of things work well in our team, there are still minor changes to be made in your own work. I would like to reply to all my emails straight away, so that they aren’t left lingering in my inbox.”

Sanna and Lauri would also like to point out the benefits of new ways of working to others.

“Be open to new opportunities and make maxi-mum use of them. Embracing these tools really pays off.”

“I naturally spend coffee breaks with my col-leagues in Kuopio, but I still primarily feel like I’m part of the Helsinki community, because our tasks within the Steering and Development Unit are so similar”, says Sanna.

DISTANCE DOES NOT INHIBIT BRAINSTORMINGDespite the physical distance, the ability to cooper-ate closely and brainstorm is what makes the team strong. Mutual trust binds the team and the work-ing community together. The organisation saves time and money since people travel less. It is also better for the environment.

“Phone meetings quickly started to feel natural. It almost makes me smile to think about the time when people travelled to the Helsinki area from different parts of Finland once a month to arrange things that are now taken care of by phone”, Lauri says, roll-ing his eyes.

Sometimes it makes sense to work from home wearing woolly socks. Other times, you can work from an office near your home, where it’s quick to commute. Sanna and Lauri naturally think it’s good for everyone that the work day is made as easy as possible.

“In a way, you could think that working hours be-come more flexible as soon as you start using lap-tops instead of desktops. If it’s easier for you, it is

VALUE



THE AVERAGE NUMBER OF TELE-COMMUTING DAYS

WORK POST DEPENDING ON THE DAY’S TASKSWorking hours are still measured by traditional methods. However, in ad-dition to standard flexitime arrange-ments, hours can be adjusted accord-ing to the individual’s life situation and even the season.

NEW WAYS OF WORKING

An increasing number of Tax Administration em-ployees work in open-plan offices with no des-ignated rooms or work stations. The work spac-es are divided into different areas, by level of in-teractivity. Conversation is allowed in some areas, whereas others are reserved for work that requires silence or for phone meetings. Work can also oc-casionally be done at another Tax Administration branch or at a service centre shared by several government agencies.

per month (September 2015)

Tax Administration employees work in open-plan offices

of staff are content with the opportunities for reconciling work and private life

(VMBaro 2015)

of staff are happy with their working spaces and tools (VMBaro 2015)

TELECOMMUTERS

E-TOOLS PART OF THE WORK ROUTINEIn 2015, the staff that was about to move to the contempo-rary open-plan office received coaching for adopting new ways of working. The goal was for staff to make e-tools a part of their daily routine. A toolbox for straightforward work was created on the Tax Administration intranet. The toolbox gath-ered guidance for everything from paperless working to tips on how to smoothly change work stations during the day. Re-placement of old work methods is already up to speed and new technical prospects are constantly made use of.

TELECOMMUTING UNDERLINES

TELECOMMUTING AT THE TAX ADMINISTRATION

of staff (1,000 people)

TELECOMMUTING DAYS

days a week oroccasionallySanna Savolainen

Presence at the work place is no measure of employee productivity 1–2

1,400

66%

4 the target-orientation of work following up the productivity of work trust between the employee and the manager the ability to work independently



nssi, who has worked for the Tax Administra-tion for almost ten years, is not just a Tax Au-ditor. Certainly, he audits three different types

of taxes and works on specialist inspection projects; and he studies to expand his professional knowl-edge, just like everyone else at the Tax Administra-tion. But in addition to his primary tasks, Anssi also mediates workplace conflicts, except for those that may arise in his own community, for reasons of trust.

A

If tax auditor Anssi Immaisi — who has also trained as a mediator and work supervisor – were to give work-places one piece of advice, it would be this: draw potential conflicts into the open by dealing with the people involved quickly and decisively. Con-flicts generally become more damag-ing if they are left to fester.


“All the aspects of my job are very varied and chal-lenging — the auditing, the supervision and the me-diation. Fresh insight is the reward for getting in-to situations that can sometimes be uncomfortable. Each one teaches me something new.”

TEN WORKPLACE MEDIATORSIn the summer of 2015, ten mediators were trained to resolve conflicts and disagreements within the Tax Administration work communities. Anssi noticed the ad on the mediation training on the Tax Administra-tion’s intranet and decided to sign up.

“I thought it was great. Mediation would be a great fit with my previous skills, seeing as I had graduat-ed as a work supervisor from the University of Turku in 2015. The programme was three years long and I finished it while I was working. I did my study place-ments at the Tax Administration. I helped people to evaluate and develop their own work on a practical level.”

The wheels are set in motion when mediators are contacted. Often it is managers that ask for support.

Once the process has kicked off, a preliminary meeting is held. All parties to the conflict are invit-ed, and together they discuss why a mediator has been called in. After the initial meeting, the media-tors meet with each party individually. Everyone is

given time to explain what has happened and what their own personal experience of the situation is.

Next comes processing. The mediator’s task is to probe further, summarise and give guidance. The main responsibility, however, lies with the partici-pants. If an agreement is reached, it is put into writ-ing and signed. After a few months, the mediator will revisit the issue and see how well the agreement has been followed. If necessary, adjustments are made and a potential follow-up meeting scheduled. After that, it falls to line managers to monitor the situation and the mediation process is wrapped up.

PERSONAL RESPONSIBILITY AND THE DESIRE TO FIND SOLUTIONSThe basic idea behind the process is that people can reach an understanding and agreement if they are listened to and their voices heard. It may sound easy, but often it is monumentally difficult.

The basic idea behind the process is that people can reach an understanding and agreement if they are listened to and their voices heard. It may sound easy, but often it is monumentally difficult.

“In hierarchical organisations, people often devel-op a way of thinking in which conflict is always re-solved by an outside party, like a boss. Mediation stresses personal responsibility and the desire to

Mediators assist in solving a variety of conflicts or bullying at work.

work community mediators

Mediation is an example of a new method that has been tested to deal with conflict. While the number of instances of conflict grew slightly in 2015, there has been some improvement in managing the situations. We are on the right track.

of Tax Administration staff are satisfied/very satisfied with the workplace atmosphere and cooperation.(VMBaro 2015)

WORK COMMUNITY MEDIATION

TALK TO EACH OTHER

Health leadership looks for operating models that serve to maintain and enhance staff’s abili-ty to work. The Tax Administration’s goal is for its staff to cope better, enjoy higher levels of moti-vation and productivity and suffer fewer absenc-es due to illness.

To this end, a number of practical steps are being taken. We are trying out a new, more flexi-ble way of notifying absences due to illness, and providing support to help people quit smoking. There is also a pilot project to help staff manage their workloads, targeted in particular at our old-er employees.

Health leadership is target-oriented and in-forms about the work of staff and management across the organisation from top to bottom.

Success is gauged in terms of the VMBaro sur-vey, which focuses on well-being at work. The relevant sections are those that deal with serious conflicts and how they are managed; leadership and community interaction; internal atmosphere and cooperation; opportunities to influence the content of your own work; and personal reflec-tions as to how clearly the work is focused.


find a solution. Everyone must take responsibility to achieve reconciliation. No punishments are giv-en out; no blame is ascribed. This can actually be an alien concept, if problems have previously al-ways been solved by someone else.”

Anssi’s strengths as a mediator are his calm, an-alytical nature, his expert training and his methodo-logical know-how. In mediation cases he presents a composed, confidence-inspiring exterior, beneath which lies a sound professional competence for navigating the choppy waters of workplace discord.

“A good working atmosphere where good results are achieved is one where people trust that others

have their best interests at heart. You may disa-gree about certain things and there can be tough discussions, but the premise is always good will towards others. Trust is tricky to measure, but you can usually tell if it’s not there.”

Sometimes situations of conflict are tough on the mediator, too. Anssi bounces back from difficult cases by chopping wood at his family farm, lifting weights at the gym and by reading. His favourite books are war novels and non-fiction about me-diation.

“As it is, my work is very varied, and I wouldn’t like to give up any part of it. The best things about the Tax Administration are its stability and securi-ty. But I still think that my work place keeps up to date and embraces change.”

PÄIVI VIERTOLA, HEAD OF OFFICE, INDIVIDUAL TAXATION UNIT “One of the tasks of a manager is to intervene at an early stage in order to prevent, in advance, factors that may harm an employee’s capacity to work. The capac-ity to work depends not only on one’s physical health but also on the atmosphere of the workplace. In par-ticular when problems are prolonged, an outside me-diator may solve the situation better than the manager. It is however important to keep in mind that the earlier problems are addressed the easier they are to solve.”

Reduction in absences due to illness

HEALTH LEADERSHIPAiming at better coping, motivation and productivity at work

TALK TO EACH OTHER

DEVELOPMENTTAX REVENUE

SOURCESEFFICIENCYUNPAID TAXES

VAT GAPTRANSFERS


Statistics on tax revenue 2015

In 2015, gross revenue of taxes collected by the Tax Administration totaled €70.5 billion. Refunds made to taxpayers during 2015 amounted to €15.4 billion. After refunds, we were able to pay €55.1 billion on to recipients (net revenue).

NET REVENUE48,493 49,762 52,681 53,979 55,124

NET TAX REVENUE AND REFUNDS, 2011–2015, MEUR

2011 2012 2013 2014 2015

The revenue amount (55,086) differs slightly from the net revenue for the 2015 calendar year (55,124) because transfers to tax recipients other than the state are made once a month, and the accrual period already starts on the 18th of the previous month (in this case 18 December 2014) and ends on the 17th of the transfer month (in this case 17 December 2015).

Revenue of taxes

€70.5G(Gross revenue)

MUNICIPALITIES €21,769M

PARISHES €1,046M

STATE €28,673M

Tax refunds

€15.3G

Net revenue

€55.1G

TAX ADMINISTRATION

SOCIAL INSURANCE INSTITUTION €3,596M

billion THE NET REVENUE OF TAXES

Growth on the previous year 2.1 % (in Finnish only)


*Other taxes: employer’s social security contribution, gift and inheritance tax, transfer tax, tax on insurance premiums etc.

€MChange

(€M)Change

(%)

TOTAL NET REVENUE 55,124 1,145 2.1

Individual income tax 30,081 612 2.1

Corporate income tax 4,567 580 14.5

VAT 14,248 113 0.8

Employer’s social security contribution

1,663 −26 −1.5

Real estate tax 1,605 93 6.2

Other taxes* 2,959 −227 −7.1

BREAKDOWN OF NET TAX REVENUE, BY TYPES OF TAX

In monetary terms, INDIVIDUAL INCOME TAX saw growth of €612 million (+2.1%), largely attributable to a rise of approximately 2% in the overall level of income tax.

The net revenue for CORPORATE INCOME TAX 2015 from showed a rise of 15% — comparable

REVENUE FROM DIFFERENT TYPES OF TAX

in monetary terms to that for individual income tax. However, this must be seen in the context of mod-est revenues for 2014. Prepayment receipts were excessively low in 2014 which meant that a num-ber of corporate taxpayers still had to pay their tax-es for 2014 in 2015.

The net revenue for 2015 collected by the Tax Administration amounted to €55.1 billion. This represents an increase of €1.1 billion (+2.1%) on the previous year. The growth in revenues from individual income tax accounts for over half of the total increase, while the rise in corporate income tax revenues explains the rest.

VAT

Individual income tax

Corporate income tax

Other taxes* Real

estate tax

25.8%54.6%8.3% 8.4% 2.9%


REVENUE FROM VALUE-ADDED TAX

Revenue from value-added tax re-mains stable for three years in a row.

The 2015 net revenue from VAT totaled €14.2 billion, representing an increase of €113 million (+0.8%) on the previous year. This indicator has remained almost the same for three consecutive years. The VAT on imports, collected by Customs Finland, is not included.

INCOME TAX REVENUE

Corporate income tax revenue increased with 15 per cent.

The gross revenue from corporate income tax in-creased by €580 million, to almost €4.6 billion (+15%). Of the elements of corporate income tax, gross revenue from prepayments increased by €280 million (+8.9%). The amount of supplemen-tary payments increased by €141 million (+14%), back taxes by €98 million (+23%), while there was a decrease in refunds refunds of prepayments amounting to €61 million (–11%).

€MChange

(€M)Change

(%)

NET REVENUE FROM VAT 14,248 113 0.8

Gross revenue 25,790 704 2.8

Refunds 11,542 591 5.4

€MChange

(€M)Change

(%)

INDIVIDUAL INCOME TAX 30,081 612 2.1

Withholding taxes 28,510 579 2.1

Taxes withheld on dividends 601 103 20.7

Prepayments 1,580 7 0,4

Supplementary prepayments 629 −91 −12,7

Back taxes/prepayment refunds −1,238 14 1.1

€MChange

(€M)Change

(%)

CORPORATE INCOME TAX REVENUE 4,567 580 14.5

Prepayments 3,412 280 8.9

Supplementary prepayments 1,144 141 14.1

Back taxes/prepayment refunds 11 158 107.5Net revenue from VAT, by sector of business

Among the most important sectors of the economy, the 2015 net revenue from VAT went down in retail (–2.8%) and IT/Communications (–5.5%). It increased in manufac-turing (+6.1%) and construction (+6.5%).

INDIVIDUAL INCOME TAX

Revenues from individual income tax accounts for over half of the total.

The gross revenue from income tax paid by indi-vidual customers reached €30.1 billion. This ac-counted for more than half of the gross revenue collected by the Tax Administration. It showed a growth of €612 million (+2.1%) year-on-year.

The majority of income tax consists of withhold-ing tax, with an increase of €579 million (+2.1%). However, this increase was weaker than that of 2011–2014, when annual growth rates were be-tween 3.5% and 4.8%. The 2015 rate of increase is slightly higher than the 2010 rate when growth was slow.


Recipient €MChange

(€M)Change

(%)

CENTRAL GOVERNMENT 28,673 501 1.8

Income tax; earned and capital income

9,094 –23 –0.2


VAT 14,214 115 0.8

Other state taxes 2,603 80 3.2

MUNICIPALITIES 21,769 601 2.8

Municipal income tax 18,524 331 1.8


Real estate tax 1,603 92 6.1

PARISHES 1,046 19 1.8

Church tax 921 10 1.1

Corporate income tax 124 9 7.7

FPA 3,596 –47 –1.3

Health insurance 1,934 –18 –0.9

Employers’ social security 1,662 –28 –1.7

FORESTRY FEES 2 –25 –92.2

Total taxes and charges 55,086 1,049 1.9

AMOUNTS TRANSFERRED TO TAX RECIPIENTS IN 2015

Services for tax recipients

CENTRAL GOVERNMENT For central govern-ment, two thirds of the growth is due to the in-crease in corporate income tax, while the rest is attributable to increased VAT and other tax-es. Because the transfers of tax on earned in-come and capital income to central govern-ment include taxes at source, which decreased by some EUR 260 million, this shows as a de-cline in the overall transfer amount.

MUNICIPALITIES Out of taxes transferred to municipalities, municipal income tax with an increase of more than EUR 300 million (1.8 %) grew the most. The average municipal income tax rate rose by approximately 0.5 per cent, which also increased the tax income of munic-ipalities. Transfers of corporate income tax and real estate tax also increased.

PARISHES Church tax and corporate income tax accumulated some EUR 10 million more to parishes compared to the previous year.

KELA Insurance payments and employers’ social security contributions transferred to the Social Insurance Institution (Kela) decreased as a result of lowered payment rates.

FORESTRY FEES Transfers of forestry fees de-creased by more than 90 per cent, because full fees were now only transferred to the Åland Is-lands forestry association.

Transfers are made to tax recipients month-ly. Each month, the taxes accrued between the 18th of the previous month and the 17th of the present month are transferred. On account of this, especially the numbers for specific tax types differ from net revenues, for which the statistic periods are a calendar month and a calendar year.

The Tax Administration passes on the tax revenue accrued in its accounts to providers of public services: central and local government, the Social Insurance Institution (Kela) and parishes. In 2015 these tax recipients received a total of EUR 55.1 bil-lion in tax revenue, which was EUR 1 billion more than the year before (+ 1.5 %).

2011

2012

2013

2014

2015

48,998

50,261

€M Change (%)

7.8

2.6

53,213

54,037

5.9

1.5

55,086 1.9

TAX REVENUES PASSED ON TO TAX RECIPIENTS

(in Finnish and Swedish only)


At the end of 2015, unpaid taxes totaled EUR 4.4 billion.

This total includes tax arrears (EUR 4.2 billion) and a deficit in tax accounts amounting to EUR 179 million. The amount of tax arrears increased by EUR 308 million (8%), while the deficit amount in tax accounts decreased by EUR 15 million (–7.8%). The reason for tax arrears may be genu-ine insolvency or a deliberate failure to pay taxes.

TAX ARREARS COLLECTED THROUGH DIFFERENT MEASURES

€MChange

(€M)

Tax account payment reminders 1,355 28

Recovery measures 1,653 –84

Payment reminders 335 5

Customer-specific recovery measures* 417 –9

Recovery of taxes through enforcement 347 5

*The accrual rate for customer-specific recovery measures is 53.6 per cent.

Reports of crime 550 times

TAX ARREARS, 2011–2015, TAX ACCOUNTS WITH NEGATIVE BALANCE, 2013–2015

Tax arrears,

€M

Negative balances,

Tax Accounts, €M Total

2015 4,173 179 4,352

2014 3,865 194 4,059

2013 3,730 191 3,921

2012 4,084 - -

2011 3,898 - -

reports more than 2014

Of the tax arrears EUR 1.2 billion (28%) were taxes unpaid by individual customers and EUR 2.8 billion (72%) by cor-porate taxpayers.

CORPORATE TAXPAYERS

INDIVIDUAL CUSTOMERS

BREAKDOWN OF TAX ARREARS

INCOME TAX, INCLUDING PREPAY-MENTS VAT

WITHOLDING TAX AND SOCIAL SECURITY CONTRIBUTIONS

OTHER TAXES

UNPAID TAXES

Most of the unpaid taxes were income tax and its prepayments (43 %) and VAT (37 %).

72 % 28 %

2.2 %

43.3 % 37.1 %

17.4 %


Although there was an increase in operating ex-penses, cost-efficiency improved when compared to that of 2014. This is also a result of the increase in the number of taxpayers.

GROWTH IN PRODUCT

The number of taxpayers increased, and we were able to improve our productivity. This indicator shows a positive trend although the number of person-years increased slightly from 2014.

EFFICIENCY GROWTH

The Tax Administration aims to oper-ate productively and cost-effectively. Productivity is measured by the number of outputs in relation to one person-year, while cost-effectiveness relates to the cost per unit of output.

WE IMPROVED OUR PRODUCTIVITY AND COST-EFFICIENCY AS THE NUMBER OF TAXPAYERS INCREASED

IN ACCOUNTING, ANNUAL COSTS GREW BY 1.9%The 2015 operating expenses were €7.6 million higher than in 2014. The growth is explained by a change in the accounting schedules of holiday pay and new entries in ”work performed for own purposes” accounts.*

* The IT project cost is booked as part of the operating expenses of the accounting years when program devel-opment is ongoing, and when the IT systems are com-pleted, the increase in yearly depreciation will reflect its development expense year-to-year. Both these fac-tors made the 2015 operating expenses higher when compared to the previous year.

NET OPERATING EXPENSES STAYED AT THEIR 2014 LEVELSThe net operating expenses of the Tax Adminis-tration decreased by 0.1% on the previous year.

NET OPERATING EXPENSES 2005–2015, INDEX-ADJUSTED

Personnel costs are

of total cost

2010 2011 2012 2013 2014 2015

€M

350

400

2005 2007 2009 2011 2013 2015

350

400

€M

376.1

415.0

380.1

367.2

THE TAX ADMINISTRATION’S OPERATING EXPENSES 2011–2015


Download the report

According to a report by the European Commission assess-ing the VAT gap in European Union member states in 2009–2013. In Finland, as in Sweden and Denmark, the VAT gap is among the smallest in EU member states. It has remained essentially unchanged during the years in question.

remained uncollected

Collected VAT amounted to

The VAT gap is the difference between the potential tax revenue under the tax rules and the actual revenue received. Factors giving rise to this type of gap include deliberate non-compliance, lack of knowledge about VAT rules, and financial difficulties. The Tax Administration’s operations and our tax system can be reviewed based on development of the tax gap.

Finl

and

The

Net

herla

nds

Swed

en

Luxe

mbu

rg

Slov

enia

Fran

ce

Por

tuga

l

Den

mar

k

Uni

ted

Kin

gdom

Bel

gium

Irel

and

Ger

man

y

Aus

tria

EU a

vera

ge

Spai

n

Esto

nia

Bul

garia

Cze

ch R

epub

lic

Hun

gary

Mal

ta

Pol

and

Latv

ia

Italy

Gre

ece

Slov

akia

Lith

uani

a

Rom

ania

Average VAT gap within the EU

VAT gap in Finland

THE VAT GAP IN EUROPEAN UNION MEMBER STATES IN 2013

4.1% 4.2% 4.3 % 5.1% 5.8 %

8.9 % 9.0 % 9.3% 9.8 % 10.5% 10.6%11.2% 11.4%

15.2%16.5 % 16.8 % 17.2 %

22.4 %24.4 %

26.4 % 26.7 %

29.8 %

33.6 % 34.0 % 34.9 %

37.7 %

41.1 %

CORE PROCESSES UNITS

STAFFMANAGEMENT GROUP

PROJECTSGUIDANCE

DIGITALIZATIONLEGISLATIVE AMENDMENTS

INTERNATIONAL COOPERATION

THE GREY ECONOMY

TAX COMPLIANCE


The Tax Administration is divided into three national sectors: Individual Taxation, Corporate Taxation and Tax Collection.

Each sector has a Steering and De-velopment Unit in Helsinki, while they maintain tax offices in all regions of Fin-land. From January 2015, the Corpo-rate Taxation Unit has been in charge of corporate tax assessments and tax field audits.

As support for the taxation units, the Tax Administration has several smaller units that take part in ensuring the ef-fective actions of the organisation.

TAXATION UNITS 2015

INDIVIDUAL TAXATION

49.4%Taxation of individual taxpay-ers, business owners and self-employed individuals. Individual taxation covers in-come tax and tax prepay-ments as well as inheritance tax, gift tax, transfer tax and property tax

CORPORATE TAXATION

29.3%Serves and gives guidance to lim-ited-liability companies, coop-eratives, associations and foun-dations. Manages customer da-ta, carries out tax assessments, including a number of control measures Tax auditing of all cor-porate customers.

TAX COLLECTION

9.2% Cash-flow management, collection, recovery and transfer of tax revenues

ADMINISTRATION

4.1%

Personnel, financial, and general administration

Bodies independent of the Tax Administra-tion are the Central Tax Board, preparer of ad-vance rulings, and the Board of Adjustment, which works with ap-peals against tax deci-sions.

IT SERVICES

3.6% Information technology provision

VALMIS PROGRAM

1.5%Information system development with the objective to replace current tax IT solutions with a commercial off-the-shelf software application

TAX RECIPIENTS’ LEGAL SERVICES

0.7% Oversees the rights of tax recipients in taxation matters and tax appeals

EXECUTIVE AND LEGAL UNIT

0.7% Top management tasks and preparation of official decisions issued by the Director-General

GREY ECONOMY INFORMATION

0.5% Provision of information on grey economy and combatting grey economy with other authorities.

COMMUNICATIONS

0.6%Group-level communications, web and language services

INTERNAL AUDITING

0.1% Assessment of the sufficiency of internal control within the Tax Administration

Units and the percentages of the Tax Administration’s personnel

Rules of procedure

Verohallinnon työjärjestys, in Finnish and Swedish only


The management of money flows process covers incoming and outgoing payment traffic; accounting

of tax revenues; transfer of tax revenue to tax recipients; and analysis of tax revenue and

forecasting of cash flows for the needs of central government cash management.

The goal of the Tax Audits Process is to help our cus-tomers act right. It must ensure that they give correct

and sufficient information for tax purposes. At the same time, we ensure that tax recipients receive their part of

revenues at the right time and to the right amount.

The proactive guidance and advice process ensures that customers know how to declare and pay their taxes correctly, on their own

initiative and on time. Proactive guidance is also used to promote customer

attitudes toward tax compliance.

PROACTIVE GUIDANCE AND ADVICE

MANAGEMENT OF MONEY FLOWS

TAX AUDITS


The Tax Administration Management group sets the Administration’s long-term strategic goals, ad-dresses the questions of resources at the central level including finances, personnel, office space, operative planning and follow-up.

31.12.2015

Kirsi Huhtamäki Chair Verovirkailijain liitto ry (Tax Official Union)

Tiina-Liisa Forsell Quality Manager Executive and Legal Unit

Eija Lönnroth Program DirectorValmis program

Timo RäbinäChief Tax OmbudsmanTax Recipients’ Legal Services Unit

Maarit Turunen Director Internal Auditing Unit

Pekka Ruuhonen Director General, Chair

Heli LähteenmäkiSenior DirectorIndividual Taxation Unit

Sanna AlamäkiSenior Director Corporate Taxation Unit

Leena WikströmSenior DirectorTax Collection Unit

Markku HeikuraChief Information OfficerIT Services Unit

Tommi KämpeAdministrative Director Administrative Unit

Arto PirinenStrategy DirectorExecutive and Legal Unit

Janne MarttinenDirectorGrey Economy Information Unit

Mikko MattinenCommunications DirectorCommunications Unit

Rules of procedure

(in Finnish and Swedish only)

READMORE


49.4%

29.3%

3.6%

4.1%

4.1%

The number of Tax Administration staff exceptionally grew in 2015. The growth was target-oriented and anticipated the staffing needs of large ongoing projects, as well as new ones under preparation. The projects include the adoption of new off-the-shelf taxation software, the establishment of the na-tional income register and preparations for the transfer of the taxation duties of Customs Finland. New tasks and demands that came about during the past few years furthermore in-creased the staffing needs. Despite the increase, the num-ber of person-years was smaller than what was agreed with the Ministry of Finance.

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

PERSONNEL NUMBERS IN 2005–2015

* Valmis Program 1.5 percent, Tax Recipients’ Legal Services, 0.7 procent, Executive and Legal Unit 0.7 procent, Communications 0.6 procent, Grey Economy Information 0.5 procent, Internal Auditing 0.1 procent

DISTRIBUTION OF STAFF BETWEEN THE UNITS

Individual Taxation Corporate TaxationIT

servicesOther units *

menwomenpersons Person-years

6,285

5,089

25%75%5,089 4,877

Tax Collection 9.2%Adminis-tration


Average age of Tax Administration staff

years

years

BREAKDOWN OF STAFF BY AGE

20 30 40 50 60 70

20

40

60

80

100

120

140

160

180

200

Pers

Year

Women Men

The average age of Tax Administration staff is 49.1 years. For remaining public administration, the average is 45.6 years. The biggest age group is people between 60 and 64 years of age (20 per cent). The fact that baby boomers are retir-ing poses a challenge for the Tax Administration. Plans must be made to ensure that knowledge is passed on to coming generations and that work can be managed with less staff. The Tax Admin-istration wants to recruit the most skilled profes-sionals and be a competitive employer. Investing in good staff policy will continue to be an impor-tant part of our job.

Average age of Tax Administration staff

LEVEL OF EDUCATION For several years, it has been the goal of the Tax Administration to increase the share of staff that have a Bachelor’s, Mas-ter’s or polytechnic degree. At the end of 2015, 40.7 per cent of staff had one of these degrees (39.2 per cent in 2011).

For people below the age of 45, it is most common to have such a degree, whereas individuals older than 45 most common-ly have a lowest level tertiary education.

of staff have a Bachelor’s, Master’s or polytechnic degree 8%Not known

5%Basic education

1%Postgraduate

34% Lowest tertiary

17% Bachelor’s or polytechnic

12% Upper secondary

23% Master’s


The Ministry of Finance and Parlia-ment guide the Tax Administration’s operations by granting us allocations and setting our performance targets. Targets are also set in the budget adopted by Parliament and, in par-ticular, the performance agreement concluded with the Ministry of Fi-nance. Every year, written feedback report on the activities of the Tax Administration is prepared by the Ministry of Finance.

THE MINISTRY IS SATISFIED WITH OPERATIONS The Ministry’s feedback on 2014 noted that our impact and productivity should be monitored in parallel. Regardless of the stringent spending lim-its, the impact and quality of our activities must not be compromised.

FRAMEWORK FOR LONG-TERM PLANNING The most important document for guiding long-term operational planning is the Government Pro-gramme. Each year, the Government budget is drafted for a four-year period based on the Pro-gramme. The budget decisions were partly revised in autumn 2015, and the final decision for the 2017–2020 period is to be published in October 2016. Current government sets its more precise objectives with the help of spearhead programs.

The budget decision takes a stance on the fund-ing of development projects proposed by the Tax Administration. Development projects may be linked to legislative amendments, changes in tech-nology, or development as outlined by the Tax Ad-ministration strategy. In the performance agree-ment between the Ministry of Finance and the Tax Administration, the Ministry sets social-impact tar-gets and other productivity targets.

SOCIAL-IMPACT TARGETS FOR 2015

taxation activities without disruption

reduction of the tax gap

Maintaining taxpayers’ positive attitudes toward taxation, furthering compliance

POSITIVE COMMENTS

We met our performance targets.

Our productivity improved considerably.

We continue to improve operations despite a tightening budget.

Our staff’s well-being at work has improved, resulting in better scores than for other public bodies.

The use of our e-Services increased as planned.

Taxpayer satisfaction level continues to be good.

Taxpayers are satisfied with our service offerings.

MORE ATTENTION MUST BE DEVOTED TO

The number of tax audits has increased, as a cause by the new real-time audit procedure.

More information is needed about the factors that explain the growth of tax arrears in order to take correct and effective measures.

Our taxation process has to be safeguarded during the implementation of the new Valmis software system.


International tax risk study project

Study of the risks inherent in cross-border operations. This project improves proactive guidance and monitoring, promoting for enhanced international cooperation between tax administrations.

Narrowing the tax gap, reducing tax flight, combatting the under-ground economy

Construction sector reporting project

Enhancement of a risk-management framework focusing on the construction industry involving monthly reports on every building site and its construction workers.

Combatting the underground economy

VALMIS Program

Implementing the GenTax software system in 2015–2019 in order to replace existing IT appli-cations. This ensures the Tax Administration’s operational reliability and reduces IT expenses.

Ensuring operational reliability

Project “FATCA”* Providing facts and information on the bank deposits of U.S. citizens under the Foreign Account Tax Compliance Act of the United States: we receive annual information reports from banks and other finance sector, monitor their compliance with the reporting requirement, send on the fig-ures to the Internal Revenue Service. The project also involves receipt of inbound facts and in-formation from the U.S.A.

Narrowing the tax gap,combatting the underground economy

National Registration of Income Data (KATRE)

Reducing the administrative burden, narrowing the tax gap

Online database for immediate registration of amounts paid to individuals, collecting real-time data for each payday. Uniform standards for online registration are agreed.

PROJECT DESCRIPTION STRATEGIC GOALS


Improvement of tax risk management and analyses

Risk management project; redesign of tax-risk analysis and continued support of its processes.

National Data Exchange Layer (KAPA)

Building a simpler, more powerful data transmission facility (to meet the needs of Online Income Registration, XBRL and Online VAT base projects). The National Data Exchange Layer also provides interfaces for open source data, access to the Tax Administration and local government.

Merging the tax assessment functions run by Customs Fin-land with ours (Project “VETO”)

Narrowing the tax gap

Cost reduction, improved coordina-tion, reduction of the administrative burden.

Excise tax, motor vehicle tax, VAT on imports will be assessed by the Tax Administration instead of Customs Finland, with approximately 200 employees changing their contracts.

IT capacity project A project for transfer of servers to a new service provider. Increased computer capacity creates a platform for Valmis and identity management system projects.

Ensuring operational reliability

Automatic sharing of compliance reports

Building a sharing framework for monitoring the business enterprises applying for subsidies (a Ministry of Finance-supported project).

Combatting the underground economy

Tax Gap analysis project Continued study of the various reasons for the existence of a tax gap. Narrowing the tax gap, combatting the underground economy

PROJECT DESCRIPTION STRATEGIC GOALS

Cost reduction through e-File, im-provement of IT compatibility and promoting effective database utiliza-tion for administrative purposes.

KEY PROJECTS IN 2015


DEDUCTIONS CLAIMED FOR COMMUTING EXPENSES now have a higher minimum threshold: expenses may only be claimed if they exceed €750 (previously €600). FAMILIES WITH CHILDREN are entitled to a new tax credit, which partly compensates for the recent cuts in child allowance payments. The tax credit is automatically granted to individ-ual taxpayers who have children in their care — information on this is registered officially.

TAX ON GIFT AND INHERITANCE was increased with one percentage point in all tax brackets. Taxation in change-of-generation situations experi-enced a relief. At the taxpayer’s request, they can pay the amount during a ten-year period.

INDIVIDUAL TAXPAYERS CORPORATE TAXPAYERS MUNICIPALITIES

MUNICIPAL INCOME TAXThe tax base for municipal income tax was strengthened by raising the upper and lower limits for the general real estate tax rate. The municipalities decide their rates for real estate tax within the set range.

NEW TAX RULES are in force making distributions of profit surplus taxable, which equalizes the taxation of cooperatives with that of limited-liability companies.

REVERSE CHARGE VAT was introduced in the sector of scrap metal trading and processing, in order to combat grey economy. Under the reverse-charge scheme, the buyer of goods pays VAT instead of the seller. The scheme has previ-ously been applied in the construction sector.


We want to meet the expectations of our customers and offer them e-services that are easy to use. We aim at increasing the level of automatization and de-

The digital Tax Administration has successfully been developed since long ago.

creasing the need for visits and phone calls. The re-placement of the numerous Tax Administration data systems with one single taxation software package

(the Valmis program), the MyTax service being cre-ated for taxpayers, and the Income Register are im-portant building-blocks for reaching our goals.

2015 Chat service channel

2014 E-invoices

2014E-filing real estate tax informa-tion

2014Complete overhaul of tax systems, the Valmis program

2013 Service for corporate income tax filing

2012Account number notice and Tax NumberService

2001 BIS information service (YTJ)- registration

details of companies)

1997TYVI e-services - details from

businesses to the authorities

1997Digitising paper-form periodic tax returns- monthly tax

returns

1998 Tax.fi (redesigned in 2011)

2003 Digitising paper-form annual information returns

2005 Ilmoitin.fi- Company

interface service

2006Tunnistus.fi and Katsoidentification service - identification

and authori-sation services for businesses

2010 Paper digitising for nationwide electronic work queues

2010 Tax

Account Online

2006 Palkka.fi

2007Tax Card Online

2008Tax Return on the Web

2009E-service for tax recipients(local and central government, other organisations)

2009BIS e-service (YTJ)

Services for businesses

Services for individuals

Services for individuals ja businesses

ROADMAP OF DIGITAL HISTORY

2014 Tax gapregister


customers received help with e-filing their tax returns

AWARDS FOR THE DEVELOPMENT OF E-SERVICES

Service of the Year award to the Tax Administration’s Snapchat

Award for Influential Organisation of the Year

Influencer of the Year award to Information Management Director Markku Heikura for the development of digital services

Digital Organization of the Year award to the Tax Administration

Digital Project of the Year award to Tax Card Online

THE TAX ADMINISTRATION ON SOCIAL MEDIA In 2015, the Tax Administration opened new ac-counts on Facebook, Instagram, Snapchat and Twitter. The social media updates reached more than half a million people monthly.

TAX.FI

THE TAX24 ONLINE CUSTOMER SERVICEThe online customer guidance concept Tax24 introduced in 2015 includes three interactive platforms: the Chat, the Answer Bank and Submit a question. Tax24 reduc-es the need for customers to visit the tax office or call ser-vice numbers.

most esteemed website in Finland

visitors in 2015

An average of

chat conversations a month

of contacts were by chatviews

videoson YouTube

visitors a dayAn average of

of monthly VAT notices are filed online

of monthly employer contributions are filed

electronically

of limited companies filed their income tax return

electronically

in 2011, the share of e-filing was 32%

of tax card revisions are done electronically

in 2011, the share of e-filing was 37%

7th 17,000,00015,000

90%

46,00088%

51%10,000

81%

76%

30,00045

The

In Tax Return on the Web almost

(in Finnish and Swedish)

Explore the service


TAX ADMINISTRATION SERVICE WORKS WELL AND THE INCIDENCE OF GREY ECONOMY IS DECLININGA questionnaire carried out with corporate taxpay-ers shows fewer observations of grey economy than in previous years. The taxpayers are furthermore very content with the service provided by the Tax Admin-istration. Especially tax audits were evaluated in posi-tive terms. On the downside, people feel that the Finn-ish tax system does not encourage entrepreneurship.

READ MORE

The term grey economy signifies the neglect of statutory payments and liabilities. Tax audits, cam-paigns as well as customer guid-ance and supervision are used for combating the grey economy. The goal of the actions is to keep soci-ety’s tax income at the correct level and to prevent the competitive edge of companies that operate il-legally.

The yearly publication of the Tax Administra-tion’s Grey Economy Information Unit gives an overview of how grey economy is combated and how society can be protected from it. The 2015 publication introduces the City of Helsin-ki and the Finnish Funding Agency for Innova-tion, Tekes, as the Tax Administration’s allies in the combat against grey economy.

Read The Grey Economy 2015

INCREASED NUMBER OF TAX AUDITS AND GREY ECONOMY INVESTIGATIONS The Tax Administration carried out more than 4,500 tax audits in 2014 and 2015. This is an increase of around 1,000 audits compared to previous years. The increased numbers are ex-plained by an emphasis on risk-based audit-ing and real-time audits, where the goal is to make taxpayers correct their erroneous actions by themselves.

31 per cent of tax audit working hours were spent on investigations into the grey economy. Out of the 4,589 tax audits finalised, various forms of grey economy were observed in 1,041 audit objects (23 per cent).

A RECORD NUMBER OF FINANCIAL CRIMES KNOWN TO THE AUTHORITIES The publication The Grey Economy — Control sta-tistics 2015 presents the results of the Tax Adminis-trations audit work, the numbers of financial crimes dealt with by the Police and Customs Finland as well as statistics on alcohol control. The statistics show that in particular the numbers of cases of aggravat-ed dishonesty by a debtor and aggravated tax fraud were considerably higher in 2015, in comparison to previous years.

Read The Grey Economy — Control statistics 2015

2013 2014 2015Tax audits 3,362 4,666 4,589Number of audited businesses found to be grey 688 713 1,041

GRANSKNINGAR AV GRÅ EKONOMI

(in Finnish and Swedish)


MUCH INTEREST FOR CONFERENCE

Much interest for conference on international exchange of tax information

In September 2015, the Tax Administration ar-ranged a meeting for the managers of tax infor-mation exchange in EU member states. The aim of the Tax Administration is to minimise the tax gap by enhancing international information ex-change and making use of the information re-ceived. The meeting had participants from 28 countries, both from the European Commission and from the OECD.

Meeting of EU information exchange managers

COLLABORATION WITH SEVERAL ORGANISATIONS

In 2015, the Tax Administration actively took part in the work of the OECD, the IOTA and the EU, and furthermore in Nordic cooperation.

We also started collaborating with ATAF (African Tax Administration Forum). The purpose of the cooperation is to support the development of the taxation units of large corporations in Namibia.

In order to secure Finnish tax income, the pro-ject Risk Phenomena in International Taxation has been ongoing at the Tax Administration. The purpose of the project is to decrease the tax gap arising from international phenomena and to identify, prevent and reduce tax risks related to them. It also aims at enhancing national and in-ternational cooperation.

NEW INTERNATIONAL DATA FLOWS

International data flows support de-velopment of tax systems

In late 2015, the project New International Data Flows was introduced. The project will carry out numerous automation procedures for internation-al exchange of information. These include DAC, CRS and CbC. Exchange of income information in accordance with the EU directive on mutual assis-tance has already begun. The Tax Administration has developed its procedures in order to incorpo-rate the received information to its own tax pro-cesses. Finland signed the FATCA agreement re-garding the exchange of tax information with the United States in 2014. The Tax Administration im-plements the agreement by supervising the report-ing obligations of Finnish financial institutions and by exchanging information between countries.


Finnish citizens traditionally have posi-tive attitudes towards tax compliance, and tax morale is high. This did not change in 2015. The task of the Tax Administra-tion is to ensure that its customers pay the right amount of taxes which is used to maintain and develop public services. The generation of tax revenues is not only sup-ported by an effective payment control but also by easy-to-use services and the promo-tion of a positive attitude towards taxes.

We make every effort to ensure that our customers can pay their taxes as easily as possible. Proactive guidance and electronic filing are always available. We serve many dif-ferent kinds of customers and are able to focus proactive guidance on the right target groups.

Customer Satisfaction survey 2015

of Finns say they get value for their tax money

of Finns consider paying taxes the duty of every citizen

TAX REVENUE: WHO PAYS, WHO GETS IT, AND HOW IT IS USED

WHAT TAXES ARE USED FOR

WHO GETS THE MONEY

HOW THE MONEY COMES IN

WHO PAYS75%95%

CORPORATIONS15%

HEALTH CARE15%

ADMINISTRA-TION

14 %

EDUCATION11%

BUSINESS SECTOR 8%

SAFETY5% INFRA-

STRUCTURE, CULTURE, ENVIRON-

MENT

STATE52%

MUNICIPALITIES39.5%

KELA*6.5%

PARISHES2%

SOCIAL SECURITY43%

4%

26% VAT

11% OTHER TAXES

55%

8%

85% INDIVIDUALS

INDIVIDUAL INCOME TAX

CORPORATE INCOME TAX

The Finnish Tax AdministrationPO Box 500, 00052 VEROwww.tax.fi

finnish tax administration annual report 2015 · 14 finnish tax administration 2015 happy staff...

Documents