Next year, amendments to the Taxation Act are expected to enter into force. One of the amendments calls for more data to be added to the employment register, which will however increase the workload for accountants.

The Riigikogu has already admitted for discussion a package of draft Taxation Act and other legislation. The plan to add new sets of data into the register has already caused much confusion among entrepreneurs and accountants.  If the amendments enter into force, the employee’s job title, place where work is performed and working time level would have to be added to the register. The amendment only pertains to employees hired on the basis of an employment contract. 

According to the explanatory memorandum, the purpose of gathering the additional data is to reduce employers’ administrative burden from the submission of various reports to Statistics Estonia. Yet an increase in administrative workload is exactly what employers should be concerned about. The addition of new parameters to the register would increase the administrative burden on businesses, because companies with several hundred employees already in the register should fetch these new data for the existing employees and be prepared to change them if necessary, which requires its share of time and forbearance. If the changes enter into force, it will not be possible to add new employees to the register without the additional data.

The new data fields are as follows:

Job title

The title to be added must correspond to the international classification of professions of the domestic or international labour organisation. In the absence of the relevant code, the job title nearest to the content of the duties of employment must be supplied. Statistics Estonia has prepared guidelines on its website on how the job title is to be entered in the register.

Place where work is performed

The address of the place where work is performed has caused the most commotion. Namely, many jobs do not have a fixed physical location and many employers support employees using their home office. What should he do in such a case? The employer’s address is to be marked down in the case of a mobile job. If it is known for certain that in the case of construction work, for instance, an employer will be on a specific job site for at least one year, then the job site address can be put down. Statistics Estonia has prepared a guide for employers instructing them how to specify the job location as well.

Work time level

If an employee was entered into the register prior to the entry into force of the amendment, the employer does not need to enter the work time level for that employee, as the tax authority will do so themselves based on the data declared on tax returns. For this reason, the field for work time will also disappear from Annex 1 of the TSD, the corporate income tax and social tax return form.

Already now, the data can be filed with the register and classification codes can be reviewed, but it is not yet obligatory to do so. It is planned for the amendments described above to enter into force on 1 January 2019.

Author: Liisa Hansar