Do I have to submit the tax card every year

[livingthing]

Hi,

I just noticed that I have the 'verosuosi 2016' letter at my home and I havent cut the part 'sivutuloverokortti 2016' and gave it to my employer. Is it necessary to give it to my employer every year when the post comes from vero or the original tax card I gave my employment started is enough ?

Thanks

[riku2]

not any more. your employer gets the tax % from the tax authority now. you only need to bother with the card if you're changing the % you want to pay. I don't know why they didn't implement this years ago though.

I never really understood the idea of the "card" anyway. it just shows what % tax you want to pay and you can create a new card with any % you like (by going to vero.fi page and entering the right income numbers to get whatever % you'd like to pay). So why not just tell your employer the % number directly... it's as if they used to file the tax "cards" in a box shoe box somewhere and payroll flicked through the box to work out what this months pay check should be.

[livingthing]

Thanks riku2 !
How about if the job changes ? Then probably I do need to inform my new employer ? Also if my pay changes then is it absolutely necessary to have a new tax card or the old one is still valid ?
For example, if I am earning 3000 euros/month and my tax card says 20% for 30,000 and less and 37.5% for more than 30,000. Now if my pay increases then I just reach the 30,000 limit quicker and pay more taxes when I am there and if my pay decreases then I cross the 30,000 limit after awhile or maybe not at all and hence keep paying less taxes (i.e. 20 %)

[Beep_Boop]

It couldn't be easier *:
- Change employer -> Print new card and give to employer.
- Change salary -> Adjust percentage and give to employer (aka: new card).
- New year -> Do nothing.

It has always been like that since I came to Finland (several years ago).

* Not accounting for edge cases like people intentionally adjusting their percentages for some purpose; for example, if they need the money in the beginning of the year and want the interest-free loan.

[riku2]

if my pay changes then is it absolutely necessary to have a new tax card or the old one is still valid ?

Any percentage is "valid". If you hand in a tax card that assumes an income of 2000e/month and you actually earn 10,000e month then the tax card is valid and you'll have tax deducted on the basis of annual income of 24k euro/year. However the following year you'll get a big tax bill to request the difference (since you will have massively underpaid tax). You will pay interest on the difference as well, so it might be better to get the tax card re-issued in this case and pay it correctly as you go along.

So whatever happens (correct tax card or not) you'll eventually pay the tax due. The benefit with an accurate tax card is that you will not pay interest if you under pay tax (or some people might pay too much tax and get it back in the December of the following year, in which case you've lent the government money and I don't think they pay interest in this case).

Some people seem to think that it's mandatory to have the tax card correct and somehow you can pay "less" tax than you should if it's wrong. But you pay the tax eventually. either month by month or with a bill the following year. Probably most people would prefer to have the right amount deducted month by month than face a large bill the following year (or receive money back the end of the subsequent year - some of your own money back that you overpaid the government the year before).

The notification of tax data from vero -> companies did change some years ago. I remember not sending in the new tax card (to an employer i'd worked for for many years) and without the new tax card they deducted a default % from February onward which was much higher than my correct rate (never understood why they could not use the previous years value, which they did do for January salary). I found that payroll departments do not like to discuss their processes though, they have decided how to do their work and even explaining how they calculate things is a bit annoying for them.

[betelgeuse]

not any more. your employer gets the tax % from the tax authority now. you only need to bother with the card if you're changing the % you want to pay. I don't know why they didn't implement this years ago though.

They can but they don't have to. If they don't, you still have to give the card or be withheld 60%.

I never really understood the idea of the "card" anyway. it just shows what % tax you want to pay and you can create a new card with any % you like (by going to vero.fi page and entering the right income numbers to get whatever % you'd like to pay). So why not just tell your employer the % number directly... it's as if they used to file the tax "cards" in a box shoe box somewhere and payroll flicked through the box to work out what this months pay check should be.

Legally speaking the tax authority decides the percentage. For most people the decision is done automatically by computers. It gives them control that people can't on their own decide to loan money from the state and the state gets steady regular revenues. It's worth nothing that the tax cards will in some years go away when all salary traffic goes through the state.

http://www.kauppalehti.fi/uutiset/veron ... n/5fbpFNtQ

So whatever happens (correct tax card or not) you'll eventually pay the tax due. The benefit with an accurate tax card is that you will not pay interest if you under pay tax (or some people might pay too much tax and get it back in the December of the following year, in which case you've lent the government money and I don't think they pay interest in this case).

They do pay interest.

https://www.vero.fi/fi-FI/Yritys_ja_yht ... auttaminen

The notification of tax data from vero -> companies did change some years ago. I remember not sending in the new tax card (to an employer i'd worked for for many years) and without the new tax card they deducted a default % from February onward which was much higher than my correct rate (never understood why they could not use the previous years value, which they did do for January salary). I found that payroll departments do not like to discuss their processes though, they have decided how to do their work and even explaining how they calculate things is a bit annoying for them.

They can't use previous year because the law says so.