Taxpayers in northern areas of Europe do not have to worry about spending hours preparing their taxes. There are no long lines at the preparer’s office and no scrambling to find every receipt you have from the year. Some European governments, like in Sweden, prepare the forms for their citizens! Below is a general sketch of Nordic tax filing procedures.
Sweden’s government sends tax forms that are pre-filled, with the correct information, to each taxpayer. These forms can be delivered via text message or through the mail.
The countries that participate in similar tax preparation practices are:
This helps reduce those that opt not to file, those that owe and do not file and helps prevent mistakes.
Respond to Text Message
Once the taxpayer receives and reviews their tax return from the government, a simple reply of “yes” is an acceptance of the forms. The only confirmation required is a reply to a text message agreeing that the forms were filled out correctly.
Benefit to Residents
Most of the residents of Nordic countries are middle-class persons. Most do not have a long list of itemizations, so a centralized system makes sense for these countries. The tax brackets are simpler and lower than those paid in the U.S.
There are loopholes in the Nordic countries’ tax systems which allow large companies to pay zero taxes. It works for these countries’ economies, but in more complex regions with larger numbers of affluent people a more complex system is required. No other countries are expected to adopt the Nordic tax code or tax filing system.
Image credit: Kim Oterhals