A checklist of duties for small entrepreneurs

Advance tax

An entrepreneur has to make sure that he pays his own income tax from the activities of his company. When the company is being established, the entrepreneur is asked to predict his cash flow for the first year; the tax officials will decide the amount of advance tax due based on this calculation. Unless any changes occur, the entrepreneur can use the same slip to pay his monthly advance tax. If the company has minimal transactions, the tax administration might make the decision that advance tax doesn’t have to be paid on a monthly basis; however, this decision is completely up to the tax administration.


Income tax

Income tax must always be paid when there is income coming into the business. The simple way to calculate income is by subtracting expenses from the yearly income. Income is calculated at the end of the financial year. A tax return for the previous year is made every spring; the final amount for income tax is calculated based on this.


Taxable Income

Once the tax administration has accepted the income of the company marked in the tax return form, they will add it to the entrepreneur’s other earned income. The final taxable income will be calculated from that total sum. When the first term has ended, advance tax will be determined automatically based on the previous financial year. It is advisable to inform the tax administration of any changes in income so that the advance tax can be modified accordingly. However, advance tax must always be paid even if there is no income or the tax administration will send a fine for late payment.


Prepayment register

By registering in the prepayment register, the entrepreneur informs his customers that he handles his income tax duties himself; meaning that the payer doesn’t have to make a withholding from his bill. If a company is not in the register, the entrepreneur has to obtain a tax card for work compensation, which allows the payer to withhold the correct prepayment. The payer has the duty to withhold 60% of prepayment from work compensation in the case that the receiver does not have a tax card or isn’t in the prepayment register.