IPT Compliance in Finland: 2021 Tax Filing Changes and the Introduction of the Suomi System

This blog was last updated on October 21, 2021

Insurance Premium Tax (IPT) is complex. For insurers, keeping up with changing rates, rules and regulations can be challenging especially when writing across multiple territories.

Sovos’ Guide on IPT Compliance, written by our experienced team of IPT and regulatory specialists, looks at the significance of digital transformation and helps paint a picture of a diverse tax landscape that never stops changing.

In the second blog of our series, we look at 2021’s changes to the tax filing system in Finland.

2021 changes to the tax filing system in Finland

The previous electronic identification, authorisation and tax filing system for companies, known as Katso, was retired by the Finnish Tax Administration on 31 August 2021. This will be replaced by a new system known as Suomi.

This has introduced new challenges for insurers. Here’s what you need to know about how it affects IPT compliance.

Registration and effective dates for Sumoi

Originally, the effective date for Suomi was set to be 1 January 2021. Due to the extensive volume of Suomi authorisation requests received by the tax administration it was delayed to 1 May 2021, and then further delayed to 1 September 2021.

All clients registered in Finland must be granted an authorisation for Suomi by this date or it will be impossible to file tax returns electronically.

As nil returns are expected in Finland, Suomi registrations are necessary even if insurers are not actively writing business.

Documents expected and additional challenges for insurers

Compared to many other territories, the Finnish tax administration has a strict list of documents expected for Suomi authorisation, which can pose additional challenges for insurers. These include:

• For foreign companies without a Finnish director, power of attorney must be granted to an individual who holds a Finnish UID.
• A mandate must be hand-signed by an authorised signatory of the company – electronic signatures aren’t recognised for clients domiciled outside of Finland.
• Insurers must also provide recent official documentation dated no older than six months prior to submission, proving the signing rights of the individual, along with personal identification verified with a notary stamp.
• The supporting company documentation must be verified either with an official stamp from the issuing authority, or with a notary stamp and apostille.
• It must also be provided in one of the three accepted languages: Finnish, Swedish or English. Documents provided in other languages must have an official translation.

Further challenges with obtaining documents required for registration due to the pandemic

Official documents are not readily available due to logistical constraints in obtaining and legalising the documents in question. And recent official documentation is often unavailable as the date of the document precedes lockdown.

Wet signatures are also far more difficult to obtain with directors often not having access to printing facilities and being a great distance from the office.

This is further complicated when company policy dictates official documents must be signed by more than one individual. In-person appointments not being available with a notary make legalisation of the documents far more arduous.