Tax collection which is efficient and convenient for people, businesses and Estonian stateValdur LaidDirector General

What does people’s tax compliance depend on?

Simple tax system

Financial risks

Attitudes, knowledge, sense of fairness

Relations between tax authority and taxpayer

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Our policy Taxes are paid, not collected We support people with trustworthy

cooperation We make payment of taxes easy and

automatic in the best possible way Info on the payment of taxes is always

available in an appropriate way Our activities are aimed at increasing

the future tax base3tax receipt

coop

erat

ion

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Short-term objectives

Long-term objectives

Fair tax competition and reduction in the

tax gap

Expected and increasing tax

revenue

Simple and convenient

services

Enterprises’ certainty in

their tax and

customs matters

Pioneering organisation and developing people

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Short-term objectives

Expected and increasing tax

revenue

Well-functioning tax and customs services

Key services for taxpayers

Surveillance of tax compliance

Forecasting and disclosure of tax information

Our focuses

Tax information– overview to business operators ofthe tax environment and data

STATISTICSincluding specific comparisons by

enterprises

RISK ASSESSMENTTax compliance and likelihood of

falling under fiscal control

BACKGROUNG INFORMATION

Public information and the datadisclosed to the extent permitted

by the counterparty

TAX MORALE SUPPORT TAX BASE

Indicators: Turnover Profit Number of employees and salary level

(social impact) Increase in export markets Likelihood of termination of activities

Forecasting enterprises’ performance: the state can react to risks thussupporting business

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Short-term objectives

Fair taxcompetition and reduction in the

tax gap

Concealed division of profitEvasion of labour taxes (concealed

salary)Tax offenceBlack market (excise goods and

narcotics)

Our focuses

Evading labour taxes under cover of a single-member private limited liability company

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Example of the concealment of actual employment relationship:

Result: 635 new salary receivers, labour taxes €4,3 million

New Public Procurement Act allows to exclude businessesfrom construction market that pay envelope salary

We estimate that ~25% of construction procurements’ turnover is made by contractors that pay wages which are <70% of sector’s average

A contracting authority has to require explanations if the average wages of a tenderer or its subcontractor is less than 70% of the construction sector’s average wages

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Long-term objectives Simple and convenient

services

Timetable of new e-ETCB develompent

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2016 2017 2018

e-ETCB stylebookInternet commerce

VAT registerEstonian CustomsTariffRevenue stampssystemPayroll data

New Personsadministration and authenticifation systemReflecting dataNew taxation solutions

2019

New e-ETCB environment- desktopsNew FIDEKCommunication and mailbox

Tax returns will be replaced by information-basedexchange of data

DATA COLLECTION

ETCB receives datafrom business

software and thirdpersons

CALCULATING TAX LIABILITY

ETCB calculatesthe amount of

taxes on the basisof the received

data

SENDINGe-INVOICE

PAYMENT OF TAXES

ETCB sends e-invoice with thecalculated tax

amount to the bank

ETCB discountsthe amount fromthe customer’s

bank account and informs the client

fuel information system

reporting 3.0

declaration of postalparcels

bank transfer based taxing

Filing tax returns is becoming a background operation

Technological solution to the movement ofpersonnel and accounting data, aiming at minimal effort and simplicity

Automation of filing payroll and workforcedata will be completed in 2018

Reporting 3.0: workforceand payroll data start moving automatically

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Long-term objectivesEnterprises’ certainty in

their tax and customsmatters

Consultation-based control processCooperation with business associations

and other stakeholders to create faircompetition environment

Common surveillance capacity of theEU internal market (including theprotection of internal border)

Our focuses

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Short-term objectives

Long-term objectives

Pioneering organisationand developing people

Our focus

Dedicated and responsibleemployees

Leaders and leadership assupporter of people’sdevelopment

ETCB image as an employer21

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Short-term objectives

Long-term objectives

Fair taxcompetition and reduction in the

tax gap

Expected and increasing tax

revenue

Simple and convenient

services

Enterprises’ certainty in

their taxand

customsmatters

Pioneering organisationand developing people

Thank you! Questions?