MaaS should be considered in traffic taxation

The digitalisation of traffic will reduce the importance of owning vehicles, and the extensive electrification and automation of vehicles will alter current business models so that physical goods, in other words cars, become part of digital services.  This development also means that the taxation of traffic must be comprehensibly reassessed.

The assessment must settle how the tax burden of traffic is distributed between the operator and the user of the service and who will be considered the taxpayer in the future.   When digitalisation produces more detailed data on service providers, users and the used services, the accumulated information can be used as grounds for taxation, if desired.  In addition to fiscal objectives, taxation may also have an increasing number of more targeted objectives related to environmental, infrastructural and technological policies. The administrative costs of taxation should not, however, increase as a result of various targeted tax solutions; on the contrary, the system should be simultaneously streamlined.

The current tax legislation of Finland supports commuters with a number of tax concessions. The tax legislation, tax authorities’ instructions and statements should already be able to respond to the new needs of digital business models.  As of the beginning of 2019, the plan will be to alter the tax treatment of charging electric cars at the workplace by specifying a formulaic taxable value for the charging benefit that will correspond to the computational average value of charging. This prevents situations where the employer would like to offer a charging option at the workplace but has to limit the use of the charging station to those entitled to an unlimited car benefit by the employer.

The tax authorities’ current policies do not altogether encourage commuters to extensively use new mobility services. The provisions of the Finnish Income Tax Act concerning an employer-provided commuter ticket’s exemption from taxes in public transport should be amended to cover commuters’ overall mobility services, regardless of the means of transportation. The data produced by MaaS services can be utilised, as explained above, for targeting tax support at commuter traffic in accordance with the legislators’ intent.

In addition, carsharing offered by an employer does not signify a car benefit referred to in the fringe benefit decision of the Finnish Tax Administration but a so-called other fringe benefit that is always assessed with the current value. At the moment, users of MaaS services are also not equal in this respect relative to the terms of taxation for the users of traditional company cars.

Finland may rise as a spearhead of digital traffic. While gaining a more functional and environmentally friendly traffic system, Finland could also obtain thousands of new jobs with digital traffic. However, MaaS and new digital business models also challenge the taxation system. Some of the challenges will be faced as a consequence of long-term development, but some are already calling for attention. It is particularly important to identify the taxation-related issues and find solutions in cooperation with various operators.

The development of the taxation system requires some amendments to legislation, but some issues can be settled within the framework of current legislation through administrative decisions and current instructions submitted by the tax authorities. The fastest changes to the taxation system should be conducted with the specification of the taxable values of MaaS services. The recommended approach for specifying a taxable value for a MaaS service would be similar to that of telecommunications services: a fixed and reasonably low taxable value that is simple and clear for the users and supports the development of the industry.


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