Finland is moving forward to the digital economy and modernization of different sectors to strengthen tax compliance and combat VAT fraud and the gray economy. Special attention is on the so-called eKutti or e-receipt system, which is part of the real-time economy project. The Real-Time Economy (RTE) project in Finland aims to modernize and streamline financial transactions and data exchanges in business. It focuses on creating a system where transactions are processed in real time, enabling quicker decision-making and improving efficiency across various sectors.

The project introduces a compilation of goals from Finland’s tax administration:

• Standardized data formats: developing common data standards to facilitate seamless communication between businesses, banks, and public authorities.
• Automated processes: enhancing automation in invoicing, payments, and reporting to reduce administrative burdens and errors.
• Integration of services: connecting different financial services and platforms to enable real-time access to data and improve user experiences.
• Digitalization: promoting the adoption of digital solutions among businesses to support the RTE framework.

E-receipts are rolled out to make paper receipts history. EKuitti, or the digital receipt, is an important step towards a real-time economy. In a real-time economy, all financial transactions are based on processing digital structured data. Structured data enables not only automation and robotization but also significant increases in productivity in both companies and public administration.

Although the eKutti implementation is not currently mandatory, we can see that progress is being made and special attention is underlined, so possible in the future, and according to the plans of Finland’s government, this could be changed. The governments want that in 2025 and the coming years, almost all companies support e-receipt and, in that way, contribute to the digital economy. Of course, all to achieve real-time control of the transactions to combat VAT and tax fraud. All because certain targets are introduced for the digital economy and the creation of the so-called digital entity. Target state is also the entire life cycle of digital documents such as receipts and transfers of digital financing data—to become digital. The project aims to ensure, with the help of information and guidance, that the state and municipalities can offer e-receipts by the end of 2025. This also is to help the environment create a so-called ecosystem in the terms that:

• Services will have moved to the web and will be able to communicate with one another.
• Companies will be able to move data efficiently and automate
• The economy will operate in real time.
• Key business information, including orders, delivery information, invoices, and receipts, will be transmitted automatically between companies.

The time required for fulfilling reporting obligations towards authorities will be significantly reduced; business data will also be transmitted to official instances such as Tax Authority and Statistics.

The result and exceptions from Finland’s government: until 2030, the world will be digital. The services have moved online and talk to each other. Data is a key tool for value creation. The economy works in real time. Therefore, we can expect certain changes, possible mandatory implementations, and systems to achieve the above-mentioned goals by 2030, no matter that Finland is not a fiscal country, but as we can see, certain rules are introduced and specific reporting systems are certainly in development.

The first e-receipt pilots in the central government started in the autumn of 2019. The State Treasury was in charge of piloting the digital receipt, eKuitti. The purpose of these pilot projects was to ensure that digital receipts work effectively. The plan is to introduce e-receipts as a routine part of financial administration, also outside the central government. Additionally, the digital receipt is expected to generate digital services that would store consumers’ e-receipts for the various needs that consumers may have.

Management by Financial Systems: eKuitti data is stored and processed through financial management systems like accounting software, travel and cost management systems, or purchase invoice processing systems. These systems may archive the receipts and link them to specific transactions, facilitating easier tax audits or regulatory checks, but this is typically managed internally by companies.

An e-receipt is a receipt in a structured, standardized format transferred from the seller’s system to the system the buyer wants to use. All data fields can be automatically processed without manual data entry of receipt information. Currently, there is no requirement to automatically send eKuitti receipts to the tax authority.

Issuing receipts in retail must be supported in accordance with the regulations: Act on the obligation to provide receipts in cash transactions and VAT Act. The receipt is in cash or its equivalent, a free-form written or electronic proof of payment. The law on the obligation to provide receipts in cash transactions obliges the seller to provide a receipt. Therefore, a receipt can be provided on paper or electronically. The seller can decide what form the receipt is in, i.e., an electronic receipt is sufficient. The business transactions must be entered in such a way that the necessary information can be obtained from the accounting to fulfill the tax obligation, and importantly, payments made in cash must be entered in a daily order without delay. Also, in Finland, there is no predefined device that must be used to issue receipts. Mostly it used cash registers and POS systems.

E-receipt is a receipt in a structured form, readable by computer. One of the most important features of the e-receipt system is representing so-called receipt service companies: new companies providing services to consumers, e.g., receipt service companies for managing consumers’ finances. Agreements between all involved subjects are required. The consumer can receive a structured receipt in a mobile application or another application from the service provider for recording or forwarding. The goal is to reduce paper usage, and it also has an environmental impact.

E-receipts are transferred in a four-corner model where the seller and the buyer can use different e-receipt operators. More models of connection between seller, buyer, and operators can be used based on contractual/agreement relations. Importantly, e-receipt processing must comply with the GDPR and European Data Protection Board (EDPB) guidelines.

In general, in the e-receipt system, the seller delivers e-receipts through their e-receipt operator to the buyer's e-receipt operator, who forwards it to the buyer's preferred system/application. Therefore, besides seller and consumer, we have seller’s receipt operator and consumer's receipt operator. Of course, multiple flows and use of cases are allowed, including special payment providers and services that manage multiple ways of payment.

Expected in November 2024, Fiscal Solutions as a seller's receipt operator will develop a solution for retailers that can be integrated, meaning each client will have an e-receipt in Finland without a need for a new integration.

Also, there are different subjects included, and each of them has its own tasks and responsibilities: receipt operators, receipt services, payment service providers, etc. Special agreements between these subjects are required to be in compliance with the legal and technical rules. The e-address identifier and user ID of the user’s e-receipt service company are central components of the e-receipt system. Technical standards, formats, and messages are also predefined in the rulebook for e-receipt processing.

For more information, please visit: https://www.fiscal-solutions.com/contact-us/