PERIODIC TAX RETURN Instructions

Transcription

1 PERIODIC TAX RETURN Instructions Table of contents: PERIODIC TAX RETURN 2 Who are the taxpayers using the Periodic Tax Return? 2 What is the filing date? 2 Instructions for correction 5 Principles of linking information between Periodic Tax Returns and Tax Account 6 Extended periods of reporting and paying 6 VAT taxpayers who qualify for VAT relief 7 INSTRUCTIONS FOR FILLING IN THE PERIODIC TAX RETURN 8 Taxpayer identification information 8 VAT information 8 Employer s contributions 17 How to show periods of no activity in Periodic tax return 23 Other self-initiated tax types 26 Special taxpayer groups 31 EXAMPLES OF CORRECTIONS 32 APPENDIX 34 List of periodic tax return taxes; lists of taxpayers 34 Filing dates of Periodic Tax Return 35 Finnish Tax Administration National Board of Taxes

2 PERIODIC TAX RETURN Periodic Tax Return is used to submit all required information to the Tax Administration on self-initiated, un-prompted taxes. The first page of the form is designed for VAT and employer's contributions. The second page is for other self-initiated tax types. If you use the paper-printed version, print out the two pages on separate sheets (no two-sided printing). Do not submit both pages on one sheet of paper, because it would complicate optical character recognition. You will only need the first page if you do not have other taxes than VAT and employer's contributions to report. Then you do not have to submit the second page. Who are the taxpayers using the Periodic Tax Return? Periodic Tax Return form is designed for taxpayers liable to VAT, regular employers, and taxpayers liable to tax on insurance premiums, and for some smaller taxpayer groups. In addition, after paying out wages, non-regular employers should submit their payroll information on this form. Other payers of self-initiated taxes are expected to use the form after having withheld taxes, including tax at source (lähdevero; källskatt) and lottery tax payable by those who have organized lotteries. List of tax types and taxpayers who use Periodic Tax Return, see page 34. What is the filing date? Periodic Tax Return is used for a taxable period at a time. Typically, the taxable period is the calendar month. If filed electronically, the filing date will be the 12th day of the month. If filed on paper-printed forms, the Periodic Tax Return must arrive to Tax Administration the 7th day of the month. Please note that you cannot fax a tax return. If the 12th or 7th falls on a Saturday, Sunday or a legal holiday, the filing date will be the following weekday For electronic filing you can use Tax Account online service ( Paper forms can be obtained from Tax Administration or they can be loaded in Small businesses entitled to extended reporting periods have received a decision from the Tax Administration to hand in the Periodic Tax Return with longer intervals than one month. For more information, see Extended periods, page 6. Please note that for taxpayers liable to VAT and yearly reporting, the filing date and due date for VAT payment will be 28 February following the end of your reporting calendar year. This deadline is the same for both electronic and paper forms. If taxpayer reporting yearly were to change the period to quarterly or monthly during the year, or were to go out of business liable to VAT, taxpayer should file Periodic Tax Return for the first part of the year, i.e. the VAT accrued since January 1st, and pay off the VAT balance on the 12th day of the second calendar month following the month when the reporting period was changed or the month when the business was closed down.

3 Table containing all deadlines, listed separately by each tax type and by each taxable period, see page 35. Periodic Tax Returns should be filed for every taxable period even if: There is a no-activity period in business operations subject to VAT or tax on insurance premiums. There is a period of no wage payment, although the employer is registered as a regular employer. There is a negative balance of VAT for the entire taxable period. Tax returns should be filed for every taxable period even if taxpayer had previously submitted an official notice to Business Information System (YTJ; BIS) regarding temporary interruption of all business operations. If Periodic Tax Return arrives late, it will result in late-filing penalties For a Periodic Tax Return arriving late, the Tax Administration will charge late-filing fees, computed separately for each tax type concerned, at a 20-percent interest rate per annum. The period for the late-filing penalty begins on the first day after the due date, and continues up to the filingdate. Tax Administration will also charge late-filing fees if: A correction (additional Periodic Tax Return) to a previously submitted Periodic Tax Return arrives late. Periodic Tax Return arrives late, even if no tax is payable. This may occur in cases of no-activity periods in business or wage payment; or in the case of computation results showing negative VAT balance. Minimum sanction for late-filing is 5 per tax type, and maximum 15,000 per tax type. The Tax Account statement will include a decision concerning the late-filing penalty. The decision will also specify the reason for the penalty and its due date. On request by taxpayer, the Tax Administration can issue a separate decision regarding the late-filing penalty. Late-filing penalty fees are not tax deductible. Example: Taxpayer liable for VAT in monthly reporting period submits the Periodic Tax Return for May 2010 (VAT payable: 10,000) late, and also submits late the information regarding no-wage payments in June The due date would have been 12 July 2010, but the taxpayer delivers the Periodic Tax Return electronically on 30 July As a result, the VAT reported late will cause a late filing penalty. The amount of VAT being 10,000, a fee of for the period 13 July 30 July 2010 will be calculated as follows: (20 x 10, x 18 days) / 100 x 365 days = As another consequence, the penalty for lateness in reporting the period of no wage payment will be the 5-minimum fee. Because different due dates apply to electronic filing and filing on paper-printed Periodic Tax Return forms, the above example would have resulted in a higher fee if the taxpayer had filed using paper form. Then the period after the due date would have been

4 longer, 8 July 30 July 2010, because the due date for paper filers would have been 7 July This would have resulted in 23 instead of 18 days of lateness, so the fee would have amounted to Consequences for non-compliance with the reporting requirement: Taxation by estimation and tax increase will be the sanctions implemented If taxpayer fails to hand in Periodic Tax Return by its due date, Tax Administration will assess the taxes by estimation, and officially prompts taxpayer to duly submit the tax return. If taxpayer still fails to submit the Periodic Tax Return, tax administration will demand the estimated amount to be paid. Similar assessment by estimation may take place even in cases where taxpayer-submitted tax returns have arrived on time, but the reported information is controversial or incomplete. Non-compliance with the reporting requirement will result in the tax increase sanction. This means that if the Tax Administration has assessed taxes by estimation for a taxable period, not only the estimated amount itself but also a tax increase amount will be payable. If a corrective assessment were to take place later and the amount payable were to be removed completely or reduced, tax increase would still remain. However, in this case, there would be no late-filing penalty. Tax increase is not tax deductible. How to calculate the taxes to be paid All taxes reported on the Periodic Tax Return are added up. Then the amounts entitled for tax refund are subtracted from the sum total. If the Periodic Tax Return included taxpayer-calculated negative VAT or other amounts that legally qualify for refund the taxpayer can subtract them from the sum total. In this way, no separate refund applications will be necessary. Tax Account will include records on amounts that legally qualify for refund (For more information, see Principles of linking information between Periodic Tax Returns and Tax Account) after the Tax Administration has validated the refund. If necessary, the Tax Administration will send a request to give more details. If the Tax Administration rejects taxpayer-calculated amounts intended to qualify for refund, or only approves part of it, the taxpayer receives a separate decision. The balance that will remain payable will be subject to late-payment interest. This interest will be based on the number of days between original due date and actual payment date. The difference between payable and refundable amounts should be paid to the bank account of the Finnish Tax Administration. Use the taxpayer-specific reference number. Failure to pay will result in late-payment interest If full settlement of the balance due is not received on time, late-payment interest must be paid to the unpaid tax amount. This concerns all taxes that the taxpayer himself has declared or reported, and also those taxes that the taxpayer has not reported even though he should have done so. The interest period begins on the first day after the due date, and continues up to the payment date. If debited tax increase, late-filing penalty or other comparable amounts are paid late, late-payment interest will be charged from the first day after the due date up to the payment date.

5 It should be noted that late-payment interest is not tax deductible. Instructions for correction If taxpayer detects an error in the submitted information that has already been filed in the Periodic Tax Return, correction should be made as soon as possible. Any facts and information that are erroneous should be put right, even if the correction has no impact on the amount to be paid. If too little tax payable or too much tax refundable was reported The way to correct the previous filing is to hand in an additional Periodic Tax Return for the period concerned. The additional Periodic Tax Return form is to be submitted so as only to show the net differences. In other words, it is imperative to only report the amounts by which correct filing deviates from erroneous filing. This is based on a simple calculation of differences by subtraction. Please note that if any previously reported amounts will not change because of the correction, the unchanged amounts should not be re-submitted. If the previous, erroneous filing showed that there was no business activity or payments of wages, the way to correct the previous filing is to hand in a new Periodic Tax Return. If too much tax payable or too little tax refundable was reported There are two alternative methods of correction. Either add the error amount to your following Periodic Tax Return, or submit an additional Periodic Tax Return to specify the net difference amounts. If you opt for the latter method, the corrective additional return should relate to the period during which the error occurred. You can use the first method only if you detect the error before you hand in your last Periodic Tax Return for the calendar year (or other accounting period). Then you can still add the error amount to your following Periodic Tax Return and the correction will only be visible in bookkeeping records. But if you detect the error later, you should submit a corrective additional Periodic Tax Return to specify the net difference amounts. The corrective tax return should relate to the last period of the calendar year (or other accounting period) as follows: VAT and tax on insurance premiums: last taxable period of the accounting year, if monthly reporting period. VAT: last taxable period of the calendar year, if quarterly reporting period. Employer's contributions and other self-initiated taxes: last taxable period of the calendar year. If taxpayer has not submitted the Periodic Tax Return at all, and the tax authority has implemented taxation by estimation The method to carry out correction is to hand in a Periodic Tax Return containing correct amounts for the taxable period(s) concerned. These amounts should be reconcilable with bookkeeping records. Last dates for correction Three years after close of accounting period for corrections relating to VAT and tax on insurance premiums.

6 Six years after close of calendar year for corrections relating to withholding taxes, taxes at source, and social security contributions. Five calendar years after payment of lottery tax for corrections relating to lottery tax. Examples of corrections, see page 32 Principles of linking information between Periodic Tax Returns and Tax Account The Tax Administration transfers taxpayer-submitted data to the Tax Account. These records are paired with information on inbound payments of taxes. Consequently, Tax Account will show how much tax taxpayer should pay, or alternatively, how much tax the Tax Administration should refund to taxpayer. For more information on Tax Account, go to The Tax Account Statement shows information on taxes charged, incoming payments, any other transactions, and current balance. The Tax Account Online ( is available for electronic filing of Periodic Tax Returns. The interface also includes useful features such as a calculator and commands for making printouts and reports. Extended periods of reporting and paying Taxpayers who are entitled to extended periods of reporting and paying have received a decision from the Tax Administration. Instead of monthly reporting, for small businesses quarterly and yearly reporting will be applicable under the following restrictions and rules: If sales / turnover is 25,001 to 50,000, Periodic Tax Returns for VAT, withholding taxes, social security contributions and source taxes can be submitted and paid quarterly. If sales / turnover does not exceed 25,000, Periodic Tax Return for VAT can be submitted and paid once in a calendar year, and Periodic Tax Returns for withholding taxes, social security contributions and source taxes can be submitted and paid quarterly. Additionally it is required that the small company is registered for VAT or registered as an employer paying out wages regularly. For this reason, a non-regular employer can have extended reporting and paying period only if there is a valid VAT registration. Taxpayers with extended periods have received a decision from the Tax Administration. This announcement will entitle them to implement quarterly or yearly reporting. For information on filing dates and deadlines see the tax calendar: > Tax Account Calendar It should be noted that taxpayers reporting and paying in extended periods are expected to notify the Tax Administration of such changes in their sales that will exceed the annual 25,000 and 50,000 thresholds either this year or next year.

7 As an administrative measure, the Tax Administration can force the reporting and paying period back to monthly from quarterly or yearly. This measure will be taken if the taxpayer s turnover exceeds the 25,000 or 50,000 thresholds, or if the taxpayer has neglected his tax returns and payments. Also newly started companies with the turnover not exceeding the 25,000 or 50,000 thresholds can be entitled to extended reporting and paying periods if the company has no negligence. Primary producers and artists making objects of fine arts liable to VAT are entitled to have the calendar year as their taxable period and frequency of reporting and paying regardless of their turnover. However, as payers of other self-initiated taxes and payments, if sales stay below the 50,000 threshold, primary producers and artists making objects of fine arts could file Periodic Tax Returns and make payments every three months (Quarterly reporting period). For more information, see VAT taxpayers who qualify for VAT relief If net sales do not exceed 22,500.00, VAT relief for small-scale business is available. If company accounting period is not the calendar year, and frequency of reporting is monthly, net sales concern the accounting year, not the calendar year. However, if frequency is quarterly or yearly, net sales concern the calendar year. Information regarding the VAT relief is reported in the Periodic Tax Return either for the last month of the accounting period or the last period of the calendar year depending on the reporting period. No additional, separate request for VAT relief is used. For more information, see instructions for lines 315, 316 and 317.

8 How to complete the Periodic Tax Return line-by line Periodic tax return Taxpayer identification information PERIODIC TAX RETURN Taxpayer identification information Taxpayer s name Please enter your business name or association name. If you are a registered business or association, your registered name is the name that appears on the documents issued by the Trade Register or the Register of Associations. Other taxpayers state their full name. 010 Business ID or personal identity number Date and signature State Business ID or personal identity number. This box entry is obligatory. If you have no business ID, use personal identity number. This code is needed to allocate the given information to the taxpayer concerned. Periodic tax return must be dated and signed. If you use eservices, electronic identification will replace the signature. Telephone number Write the telephone number of a contact person. Periodic tax return, VAT information VAT INFORMATION 050 Reporting frequency 052 Period in question Tick appropriate box. The reporting frequency is typically a calendar month. You are entitled to Quarterly or Yearly reporting only if the Tax Administration has sent you a document confirming that you have a longer reporting period. Write the period in question depending on your reporting frequency. If your reporting frequency is Monthly, write the period in question using the ordinal number of the month. For example, if you report information concerning March, write 3 Quarterly, write the period in question using a one-digit number. For example, if you report information concerning the second quarter of the year (April-June), write 2 Yearly (a calendar year), leave blank. 053 Year Make sure that you write all four digits of the year.

9 Tax on domestic sales by tax rate Enter the tax on domestic sales of goods and services by tax rate. Crossborder sales to consumers in other EU Member States are also regarded as taxable domestic sales. The standard VAT rate was 22% up to 30 June and is 23% as of 1 July Similarly, the reduced VAT rates were 12% and 8% up to 30 June and are now 13% and 9% as of 1 July Restaurant and catering service businesses have the reduced VAT rate of 13% as of 1 July The new VAT rates apply if goods were delivered or services were rendered on 1 July 2010 or later. However, if the buyer has made an advance payment, there are exceptions to this rule. If the seller has received a payment in advance, on 30 June 2010 or previously, the old VAT rate will be applicable. For more information, see Instruction no 348/40/2010 (13 April 2010) of the Finnish Tax Administration. Example: The 23%-rated sales excluding VAT equals (=the taxable amount). You work out the amount of VAT payable like this: 23% x = 4 44,30. Example: The 9%-rated sales excluding VAT equals (= the taxable amount), you work out the amount of VAT payable like this: 9% x = 153. On lines , enter also The VAT on self-supply (making private use of goods or services) The VAT on the disposal of fixed assets (when selling fixed assets) The VAT on subsidies directly linked to the selling price or quantity of the goods or services The VAT that is due because you have purchased goods or services from a foreigner not registered for VAT in Finland (reverse charge mechanism). Example: you have purchased construction services from an Estonian enterprise to a real property situated in Finland. 305 Tax on goods purchased from other EU Member States Do not enter that amount of tax under reverse charge mechanism which you report on line 306. More information about the different VAT rates on the Tax Administration website: > Arvonlisäverotus Enter the tax on goods purchased from other EU Member States (Intra- Community acquisitions). You work out the amount of tax like this: multiply the purchase price (excluding VAT) by the domestic VAT rate applied to the goods concerned. Itemize the sums of tax computed for each VAT rate separately. (the equivalent tax rates are 22%/23%, 12%/13%, 8%/9%) Example: In line 313, you have entered Intra-Community acquisitions amounting to The VAT rate applied in this case is 23%. Enter 23% x = in line 305. You may deduct the tax on the purchases of goods from other EU Member States in line 307 (you can add it up to tax deductible for period in question) on the same grounds as any input tax included in domestic purchases.

10 306 Tax on services purchased from other EU Member States Enter the tax on services purchased from other EU Member States to which the reverse charge provisions are applied in accordance with the general rule of sales between suppliers liable to VAT. When reverse charge procedure is applied, tax is payable in Finland.The tax is calculated from the purchases of services from other EU Member States, reported on line 314. The amount of tax is the price excluding VAT multiplied by the VAT rate applicable. Example: In line 314 (Purchases of services from other EU Member States) you have reported purchases for The standard 23% VAT rate is applied on the purchases. Therefore, the amount of tax to be reported on line 306 is 23% x = This tax can be deducted (included in the tax deductible for period in question) on the same grounds as tax on purchases of domestic services. 307 Tax deductible for period in question Amount of VAT relief (transfer from line 317) 308 Tax payable/ Negative tax that qualifies for refund (-) Enter the total amount of tax deductible for the period in question. Do not enter a minus sign before the figure, unless you want to correct previously reported figures (= you have previously reported too much deductible tax). See Instructions for correction above. Tax deductible refers to tax payable on goods and services purchased for the purposes of carrying out a taxable business. Examples of deductible tax pertaining to the furtherance of taxable business: -input tax included in a domestic purchase -tax on purchase of goods from other EU countries i.e. tax payable on Intra- Community acquisitions (also reported on line 305) -import VAT i.e. the tax on imported goods (= purchases from outside EU, including Åland Islands) -purchases made from a foreigner not VAT liable in Finland, where reverse charge is applied and tax is therefore payable in Finland (also reported on line 301, 302, 303 or 306) Tax is deductible only for the part the goods and services are used for the purposes of taxable business. Tax is not deductible when restrictions of the right to deduct are applied to the goods and services used. E.g. use for private purposes does not entail for deductible tax. More information about deductions and restrictions of the right to deduct on the Tax Administration web pages > Arvonlisäverotus Transfer the amount of VAT relief from line 317, if your turnover entitles you to a VAT relief. See further instructions on lines In this item you enter the result of your VAT accounting, which is the sum total of lines 301, 302, 303, 305 and 306 less the figures on lines 307 and 317. If the result is negative, i.e. tax payable is less than tax deductible, enter a minus sign before the figure. The Tax Administration will record the figure reported as a debit or credit (a sum to be paid or a sum to be credited) to your Tax Account -a negative tax that qualifies for refund is recorded as a credit on the Tax Account after it has been approved by the Tax Administration See How to calculate the taxes to be paid (above) for further information.

11 309 Sales taxable at zero VAT rate 310 Other VATexempt sales N.B. Reporting of line 310 is not compulsory in 2010 In this item, enter the sales taxable at zero VAT rate. VAT is not payable on zero-rated supplies of goods and services. However, zero-rated supplies entitle the business making the supply to report the input VAT on the tax deductible on line 307. Examples of such supplies: -sales of goods to a destination outside EU, e.g. to Norway or from mainland Finland to the Åland Islands -tax-free sales to tourists -tax-free sales to diplomats and international organizations -tax-exempt sales of warehoused goods (goods subject to warehousing arrangements) -tax-exempt sales of newspapers and periodicals in the form of subscription for at least one month -tax-exempt sales of editions of membership bulletins to non-profit making organizations (special provisions) -sales of tax-exempt vessels and sales of work on exempted vessels -supplies of services performed abroad not reported on line 312, e.g. supply of construction services to a real estate situated in Norway or Sweden In this item, you must also enter subsidies and financial aids not subject to VAT received for the purposes of your taxable business. The subsidies concerned are subsidies and financial aids received in order to improve the general business conditions, i.e. they are not directly linked to the prices of the goods or services. Example: pre-hectare aids for farmers. Do not enter -sales of goods to other EU Member States reported on line 311 -sales of services to other EU Member States reported on line 312 -VAT-exempt sales, which do not entitle you to deduct the input VAT. Enter the amount of these sales on line 310. For more information about VAT zero-rated sales, see the Tax Administration web pages on > Arvonlisäverotus. Enter VAT-exempt domestic sales that do not entitle you to reclaim the input VAT of the purchases. The VAT included in purchases pertaining to e.g. following sales is not deductible: -sales of real estate -health care and medical treatment -social welfare -educational activities -meals at educational establishments -subsidies received for VAT-exempt activities, e.g. subsidies from State funds for VAT-exempt education -performing artists fees and certain intangible rights VAT-exempt sales of financial or insurance services (Articles of the VAT Act) need not be reported for the present. More information about sales that fall outside the scope of the common system of VAT on the web page >Arvonlisäverotus.

12 311 Sales of goods to other EU Member States Enter the sales of goods to other EU Member States to VAT liable purchasers, in other words, enter the total amount of Intra-Community supplies. The goods must be physically transported from Finland to another EU Member State. The amount of the sales is the price based on an agreement between the seller (vendor) and the purchaser, inclusive of all surcharges and transportation costs that the seller (vendor) has charged from the customer for the delivery. In this item you must also enter the value of goods transferred to another EU Member State for the purposes of your business, e.g. the value of goods transferred from Finland to Germany in order to be sold there. In the case of triangulation, do not report the second supply on the Periodic Tax Return. Cross-border sales to consumers in other EU Member States are not regarded as tax-exempt Intra-Community sales. They must be reported as domestic sales on lines N.B. The supply of a new means of transport to a private person is always regarded as an Intra-Community sale (this is reported on line 309). For further information about Intra-Community sales, see the web pages on > Arvonlisäverotus. N.B. If you have made an entry on line 311, you must also report the customer-specific Intra-Community sales of goods monthly on the VAT recapitulative statement. Submit the recapitulative statement electronically, not later than the 20 th day of the calendar month following the sales. If you do not submit the recapitulative statement, a non-compliance fee may be imposed. A non-compliance fee may also be imposed if you have reported insufficient data or you have not corrected the data after being prompted.

13 312 Sales of services to other EU Member States Please enter the total amount of services supplied, which are subject to the reverse charge procedure in accordance with the general provision. The reverse charge procedure means that the customer (=purchaser of these services) must account for the VAT due in the Member State of supply. If these services are VAT zero-rated in the Member State of supply, the sales of these services must be reported on line 309 (sales taxable at zero VAT rate) Do not enter cross-border sales to consumers or sales to VAT liable customers that will be taxed in another Member State in accordance with rules other than the general provision, e.g. services relating to real estate, restaurant and catering services and hiring out of means of transport. The value of the sale is the price based on an agreement between the seller (vendor) and the purchaser, inclusive of all surcharges, e.g. costs that the seller charges in connection with the supply of the service concerned. Such charges include also the expenses incurred in rendering the services. For more specific information about the sale of services to other EU Member States, see the leaflet Palvelujen ulkomaankaupan arvonlisäverotus (in Finnish), on the Tax Administration web page > Arvonlisäverotus. N.B. An entry on line 312 implies that you must also report the customerspecific Intra-Community sales of services on the VAT recapitulative statement. Submit the recapitulative statement electronically not later than the 20 th day of the calendar month following the sales. If you do not submit the recapitulative statement, a non-compliance fee may be imposed. A non-compliance fee may also be imposed if you have reported insufficient data or you have not corrected the data after being prompted. 313 Purchases of goods from other EU Member States Enter the total amount of goods purchased from other EU Member States than Finland (Intra-Community acquisitions). Enter Intra-Community acquisitions exempt from VAT, too. An Intra-Community acquisition takes place, when you purchase goods from a vendor registered for VAT in another Member State and the goods are transported on behalf of the vendor or the purchaser to Finland The purchase of goods and the tax on goods purchased must be reported on the Periodic Tax Return on the lines concerned, although they might entitle you to a VAT deduction: -enter the purchases of goods from other EU Member States on line 313 (the acquisition price) -enter the tax on goods purchased from other EU Member States on line 305 -if the purchase entitles you to a VAT deduction, enter the tax on line 307 Enter Purchases of services from other EU Member States on line 314 For more specific information about purchases of goods from other EU Member States, see the Tax Administration web pages on > Arvonlisäverotus

14 314 Purchases of services from other EU Member States Enter purchases of services from other EU Member States than Finland, which must be reported VAT liable under the reverse charge in accordance with the general rule of place of supply of service concerning taxable persons. Do not report VAT-exempt purchases of services (e.g. work on taxexempt vessels) on the Periodic Tax Return. Although the purchases of services might entitle you to a VAT deduction, enter the purchase and the tax on service purchased on the Periodic Tax Return as follows. -purchases of services on line 314 (purchase price) -tax on services purchased from other EU Member States on line 306 -if the purchase entitles you to a VAT deduction, enter the tax on line 307, too Please enter Purchases of goods from other EU Member States on line 313 For more information about purchases of services from other EU Member States, see > Arvonlisäverotus.

15 315 Sales that qualify for VAT relief N.B. VAT relief only concerns businesses with a turnover not exceeding Please enter the sales (turnover) that qualify for VAT relief. N.B. Do not enter anything on lines , if your turnover does not qualify for VAT relief. Enter the VAT relief data on the Periodic Tax Return in accordance with your reporting frequency. Do not submit separate VAT relief applications. -If your reporting frequency is Monthly, enter the VAT relief information on the last monthly Periodic Tax Return of the accounting period concerned. Calculate the turnover that qualifies for VAT relief per accounting period. -If your reporting frequency is Quarterly, enter the VAT relief information on the Periodic Tax Return of the last quarter of the calendar year. Calculate the turnover that qualifies for VAT relief per calendar year. -If your reporting frequency is Yearly, enter the VAT relief information on the Periodic Tax Return that you submit per calendar year. Calculate the turnover that qualifies for VAT relief per calendar year accordingly. N.B. For those taxable persons whose reporting frequency is Quarterly or Yearly, the accounting period is the calendar year. (Article 208 a, VAT Act) Calculate the sales (turnover) that qualify for VAT relief like this: From the total amount of taxable sales (excluding VAT), subtract the consideration for forestry, transfer of rights to immovable property (VAT Act, Article 30) and the consideration for the disposal (sale) of fixed assets. To the sum total, add the following considerations for VAT-exempt sales: sales of goods to other EU Member States (Intra-Community sales of goods, Articles 72 a-72 c, VAT Act) international trade i.e. export, (Article 70, VAT Act) tax-free sales of goods to travellers (Article 70 b, VAT Act) VAT-exempt sales of services by virtue of Articles 71 and 72, VAT Act sales of VAT-exempt vessels and work on exempted vessels (Article 58, VAT Act) sales of newspapers and periodicals in the form of subscription for at least one month (Article 55, VAT Act) tax-exempt sales of editions of membership bulletins published at least four times a year to non-profit making organizations (Article 56, VAT Act) tax-exempt sales to diplomats and international organizations (Article 72 d, VAT Act) tax-exempt sales of motor vehicles (Article 72 e, VAT Act) sales of financial and insurance services, other than those of ancillary nature transfers of immovable property or transfers of rights to immovable property (other situations than those covered by Article 30, VAT Act) N.B. In this item, please enter a converted turnover, if your accounting period or the period covered by the VAT relief is shorter or longer than 12 months. In these cases you have to convert the sales that qualify for VAT relief so that they are equivalent to a 12-month-turnover. The converting is done in the following way: multiply the actual turnover by 12 and divide it by the number of full calendar months of the accounting period concerned. For more information about the calculation of VAT relief, see the Tax Administration web pages on > Arvonlisäverotus

16 316 Tax that qualifies for VAT relief Enter the tax you have computed, which qualifies for VAT relief. Calculate the tax that qualifies for VAT relief. Your reporting frequency of the VAT relief is either the accounting period or the calendar year (cf. line 315). The following items are not included in the tax payable (= difference between the tax on domestic sales and deductible VAT): 1. tax payable on forestry 2. tax payable on the transfer of rights to use immovable property in accordance with Article 30, VAT Act this means that, under items 1-2- of this list, the tax on sales and the tax deductible are not included in the tax payable 3. tax payable on the sale of fixed assets 4. tax payable in accordance with Articles 2a, 8a and 9 of the VAT Act (under reverse charge procedure) 5. tax payable on Intra-Community acquisitions of goods and services this means that, under items 3-5 of this list, the tax on sales is not included in the tax payable For more information about the calculation of VAT relief, see the Tax Administration web pages on > Arvonlisäverotus 317 Amount of VAT relief Example of VAT relief Enter the amount of VAT relief and transfer it to the lower row under line 307, Amount of VAT relief. The amount of Vat relief is calculated as follows: tax (turnover-8 500) x tax In the formula above, the turnover refers to the turnover that qualifies for VAT relief (cf. line 315) and the tax refers to the tax that qualifies for VAT relief (cf. line 316) The accounting period of the business is a calendar year. VAT-exclusive sales (sales subject to VAT excluding VAT) equals (the amount of VAT equals 2 070), the amount of zero-rated export sales is 3 000, and the amount of Intra-Community sales The business has sold fixed assets during the accounting period for and is VAT liable under the reverse charge mechanism for 250. The VAT on deductible purchases amount to 400 during the accounting period in question. The turnover that qualifies for VAT relief is The turnover consists of taxable sales, zero-rated export sales and Intra-Community sales. The amount of tax that qualifies for VAT relief is the difference between the taxable domestic sales and deductible VAT for the accounting period, The sales of fixed assets and the VAT liability under the reverse charge mechanism are not included. The amount of VAT relief is calculated in the following way: ( ) x = 536,

17 Periodic Tax Return, employer s contributions 050 Reporting frequency 052 Period in question EMPLOYER S CONTRIBUTIONS Tick appropriate box. The most common frequency of reporting is monthly. You can be entitled to quarterly reporting only if the Tax Administration has sent you a document confirming that you have a longer reporting period. Fill in current taxable period if reporting frequency is - Monthly, write a digit that indicates the current month. Example: you are filing taxes for March, so please write 3 as Period in question. - Quarterly, write a digit indicating the current quarter of the year. Example: you are filing taxes for second quarter (April to June), so please write 2 as Period in question. 053 Year Please use four-digit format to show the year. 601 Wages/other Write amounts subject to withholding, paid out during Period in question, compensation including: subject to - Wages, fees, benefits and other compensation, paid out on the basis of withholding employment relationship ( 13, Prepayment Act) - Fees for attending meetings, fees for giving lectures and speeches, fees for membership in the board of directors, managing director s fees, wages paid to partners in general or limited partnerships, fees paid to a person elected to a position of trust ( 13, Prepayment Act). - Seafarer s wages - Pensions, social benefits, insurance indemnities (including pensions paid to a non-resident) - Nonwage compensation, royalties ( 25, Prepayment Act) - Wages or fees paid to a sportsman - Amounts known as palkkaturva, financed by labour authorities, paid to employees in the case of employer s bankruptcy - Wages paid by a substitute person instead of the actual employer - Wages not subject to social security contribution because of an international treaty or the Social Security Regulation in EU/EEA. Thus, write all of the above payments regardless of whether social security contribution is payable or not. Write the amount of wages also in cases where the amount is low and no withholding takes place, or where wages are paid in fringe benefits only. Also write the amount of wages if there is a zero-rate tax card (certificate showing that no withholding is necessary).

18 Amounts regarded as wages Nonwage compensation, royalties (compensation for use) Compensations regarded as wages for tax purposes are e.g. the following: - Amounts reflecting taxable values of fringe benefits, such as company car, accommodation, meals, other non-cash benefits. - Any amounts higher than the tax-exempt limits of allowances for travel expenses (if employer has paid larger amounts than prescribed by the Decision of the Finnish Tax Administration on allowances for travel (see the excess portion is regarded as taxable wages). - Wages paid to employee during sick leave, even if employer has received compensation from Kela or an insurance company for these wage payments - Tips received by employee during his employment - Employer-paid pension insurance premiums regarded as wages - Additional daily sick-leave allowances financed by a sick-leave fund - Insurance salary when applying so-called six-month rule. If no insurance salary has been agreed between employer and employee, actual cash wages should serve as the basis for insurance premiums - Benefits arising from employee stock options or employee loans - Fees paid for giving lectures, not based on employment relationship, fees for attending meetings, fees for giving lectures and speeches, fees for membership in the board of directors, regardless of whether pension insurance premiums are paid or not - Severance pay in connection with termination of employment, other comparable indemnity amounts - Amounts reflecting profit sharing, within meaning of Act governing employee-stockholders funds (814/1989), paid to employee in cash. Not regarded as wages for tax purposes: - Tax-exempt amounts within the tax-exempt limits of allowances for travel expenses per the Decision of the Finnish Tax Administration on allowances for travel (see - Taxable reimbursement amounts for employee s expenses, paid by employer without obligation to withhold tax (e.g. for own tools, own telephone) - Tax-exempt fringe benefits given by employer to all personnel ( 67, 69, Income Tax Act) - Amounts excluded from employee s wages before payroll withholding is carried out (e.g. exclusion for chain-saw costs), thus not subject to withholding. To a physical person or to a consortium, such as a general or a limited partnership, paid nonwage compensation or royalties (compensation for use) are subject to payroll withholding. However, if the recipient is entered in the Prepayment Register, no withholding is necessary. Line 601 of Periodic Tax Return is intended for all these payments. Please write gross amounts, do not subtract any VAT or reimbursements paid for travel costs. To a legal person i.e. a limited company, a cooperative or other corporate body paid nonwage compensation or royalties (compensation for use) are only subject to withholding if the recipient is not entered in the Prepayment Register. Amounts withheld on these payments are to be reported in page 2 of Periodic Tax Return form, using code 25. For more information, see Other selfinitiated taxes.

19 602 Tax withheld Please write - Amounts withheld from wages when paid out - Amounts withheld from nonwage compensation or royalties (compensation for use), if paid to physical person, general partnership, limited partnership or other consortium. - Amounts withheld from pensions, annuities, social benefits etc. when paid out, (including pension paid to non-residents) - Amounts withheld from wages/fees paid to sportsmen. 603 Low-income support on withholding tax 604 Withholding tax payable Write the amount to be subtracted from the withheld amount of tax, in accordance with the rules governing low-income support. Maximum support amount is equal to the amount of withholding tax theoretically payable. For more information (in Finnish) on low-wage support, go to > Verohallinnon ohjeita >Työnantajan matalapalkkatuki Write the amount payable for period in question. Subtract line 603 from line 602. The Tax Administration will record the tax to your Tax Account.

20 605 Wages/other payments subject to tax at source 606 Tax at source on wages/other payments Please write total sum of wages and other payments subject to tax at source paid to non-residents during period in question. Examples of payments: - Wages subject to tax at source (for more information, see allowances for paid expenses) - Wages paid by a public corporate body - Compensation paid to a performing artist or to a sportsman for personal activities (generally taxable at 15% rate) - Salary ( 5,800 or higher) paid to key employee within the meaning of Act governing compensation paid to key employee (1551/1995) - Wages paid by foreign subsidiary (or similar associated entity) to a nonresident employee working in another country, if the employee has Finnish social insurance coverage. - Benefit from employee stock options and stock grants, if based on work performed in Finland - Royalties, e.g. for copyright - Nonwage compensation (if paid to a corporate body, it does not have to be reported unless subject to withholding of tax at source) Definitions of non-resident : A foreign citizen staying in Finland for no longer than six months is a tax non-resident. A Finnish citizen who has started living in a foreign country may be a tax non-resident only after three full calendar years after the year of moving away from Finland, or when s/he no longer has any substantial ties with Finland. Permissible exclusions for cost reimbursement If an individual s primary place of work is in a foreign country, and this individual is staying in Finland temporarily (e.g. lecturers and specialists), paid wages subject to tax at source do not have to include the following: - Cost reimbursement for travel - Cost reimbursement for freight and similar necessary charges associated with travel - Cost reimbursement, same amount as e.g. hotel invoice, for accommodation - Per diem allowances, as defined by the Decision of the Finnish Tax Administration, payable for days spent within the territory of Finland. However, if an individual, even though a non-resident, works in Finland full time e.g. in a retail store, office, or factory, this place becomes the individual s primary place of work. Thus, no tax-exempt reimbursement for costs can be permitted. Please write - Tax at source withheld from wages and nonwage compensation, including amounts withheld from payments to a foreign corporate body - Health insurance premiums withheld - Tax at source withheld from fees/wages paid to a performing artist or to a sportsman for personal activities - Tax at source withheld from key employee s salary. To calculate tax at source, the base should be gross amount minus deductions pursuant to 6, Act on Tax at Source, ( 510 per month, or 17 per day) Tax at source related to interest and royalties requires reporting on page 2, using code 69. This tax at source is reported separately. Likewise: Tax at source related to dividends code 39; Tax at source related to interest code 84. For more information, see page 22.

21 607 Low-income support on tax at source 608 Tax at source payable 609 Wages subject to social security contribution Please write the amount of low-income support to be subtracted from the amount of source tax. Maximum support amount is equal to the amount of tax theoretically payable. For more information (in Finnish) on low-wage support, go to > Verohallinnon ohjeita > Työnantajan matalapalkkatuki Write the amount of tax at source payable for period in question. Subtract line 607 from line 606. The Tax Administration will record the tax to your Tax Account. Please write total sum of wages and other payments, subject to social security contribution, paid during period in question, including: All wages, compensation and fees within the meaning of 13, Prepayment Act, the only exception being the payments listed in Act on Sickness Insurance (SVL 11:2.4). For more information, see the list above under Not regarded as wages for tax purposes. Additional daily sick-leave allowances financed by a sick-leave fund Tips received by employee during employment Insurance salary when applying so-called six-month rule. If no such amount has been agreed between employer and employee, actual cash wages should serve as the basis for insurance premiums Wages paid to a non-resident employee, if the employee has Finnish social insurance coverage (see above: 605 Wages subject to tax at source) Key employee s salary Compensation for personal performance, paid to a non-resident artist Seafarer s income Payment known as palkkaturva. Write the amount of wages also in cases where the amount is low and no withholding takes place, or where wages are paid in fringe benefits only. Also write the amount of wages if there is a zero-rate tax card (certificate showing that no withholding is necessary). The employer is expected to pay social security contribution even if there is no payroll withholding. Non-resident employee with Finnish social insurance coverage The employer is expected to pay social security contribution and collect an amount reflecting the health insurance premium. A non-resident is covered by the Finnish social insurance system if he works on board a Finnish ship or arrives to work in Finland for at least four months, and is not a holder of the E 101 Certificate (or similar document) granted by the home country social security authorities. However, the employer is not expected to pay social security and collect health insurance contributions, if the sum of wages paid to the non-resident does not reach 1,019 per month (year 2009) or if working hours are below 18 hours per week. Even if the employee s place of work is not located in Finland, coverage by the Finnish social insurance system may exist on the basis of the following: The employee belongs to the aircrew of a Finnish airline company, or the employee lives in the EEA or Switzerland and is employed by a Finnish freight company and belongs to the personnel of the freight fleet.