Proper Taxation Solutions in Right Phases


The aim of taxation must be to maintain and develop Nordic society. Education, care and maintenance, our roads and other things that are important to us are all dependent on tax revenue. Therefore, taxation must be efficient, fair and predictable. tax system must be as easy and transparent as possible so that all citizens know where they are paying taxes and why. USA’s total tax rate is the highest in the EU. Therefore, the overall tax rate should not be further increased. Taxation should encourage employment and entrepreneurship and promote economic growth.

The Right VAT Rate

In addition, lower VAT rates could support sustainable consumption. Any increases in taxes on consumption and production should be targeted at the taxation of products and services that are harmful to the environment and health, for example by eliminating unnecessary tax subsidies. At the same time, other measures should be taken to ensure that inequality does not increase but, on the contrary, decreases.

The business start-up form asks the future entrepreneur if he or she is applying for a prepayment register. Advance collection register means a register maintained by the Tax Administration; by joining which the company proves that it handles its tax matters itself.

If your business is not on the prepayment register, making a withholding tax that is, deducting tax from the invoice will remain in the payer’s account.

In this case, the payer of the invoice should make a withholding tax according to the tax card in the same way as from an employed person. Thereafter, the payer should account for the tax portion to the Tax Administration.

Let’s explain the same thing in slightly different words:

If you are in paid employment, you will receive a salary in your account each month. Your employer has already paid withholding taxes on this salary to the taxpayer. When you are an entrepreneur, by registering in the prepayment register, you show that you are taking care of the advance payments yourself. So you are not an employee who would have to withhold withholding tax on the money you pay.

  • As a new entrepreneur, you estimate for the Tax Administration how much profit you will make during the financial year. You pay tax in advance based on your estimate throughout the year. You will later complete the missing taxes or receive a tax refund based on the actual result. Use the s corp tax calculator there also.

For more information on the taxation of a start-up entrepreneur, see the articles on business name taxation and limited company taxation.

What good, then, is it that you do not leave the advance tax payment to the account payer?

Well, paying a withholding tax would result in a completely useless paper war for the customer that no one wants to start – it’s much easier to just pay the bill and that’s all. Indeed, it is often difficult for a start-up entrepreneur to obtain assignments before receiving a prepayment register entry.

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