The Estonian Tax and Customs Board and the Finnish Tax Administration have started real-time data exchange, which enhances tax control, saves resources and improves the quality of services offered to customers.
This is the world's first automatic exchange of information between national tax administrations. The information has also earlier been exchanged but through manually processed requests. Since January 2021, Finland has received real-time information on tax debts from Estonia. This year, the tax administrations of both countries will launch further secure real-time exchanges, extending to VAT information as well as labor and social tax information. The information is exchanged via X-Road. Cooperation will continue in the future and more services will be opened in the coming years.
Although the exchange of similar information has been possible in the context of traditional information exchange, real-time information exchange enhances the investigation of cross-border tax offenses and allows for more effective cooperation. The aim is also to improve customer service, for example, in the future an Estonian citizen working in Finland will not have to come to the Estonian Tax and Customs Board to apply for a certificate about Estonian wages for the Finnish Tax Administration. Tax administrations will also highly benefit from the solution, as it will make work much more efficient.
"The fact that we have achieved this breakthrough with our Estonian colleagues is a result of an excellent long-term cooperation. We have now created the technical solution, but the basis of this is actually built on mutual trust, that has enabled us to reach a new level and be the international forerunner together", states Arto Pirinen, the Strategy Director in Finnish Tax Administration.
Rivo Reitmann, Deputy Director General of the Estonian Tax and Customs Board, added that automatic data exchange will significantly enhance cooperation in the investigation of cross-border tax violations. "Currently, inquiries between Estonia and Finland make up about a third of all inquiries from both countries. Real-time data exchange makes the work of both Estonian and Finnish tax administrations significantly easier and faster and is a leading example of good cooperation between tax administrations," he said.