[doikor]

American banking and tax system is archaic and really inefficient when compared to some places in Europe (especially the nordics).

Here cash heavy businesses are rare and meaning the money is going through the banks. And as the money is moving through the banks it is pretty much impossible to have income that the local tax office would not see. And the banks are by law required to ask for proof of any irregular money moving in/from your account.

For retail/coffee shops/any direct to consumer business you have to pay VAT and thus are required to always print a receipt to the customer. This means you have to input the sales into the register and now it is in the books and thus really hard to not end up paying all the taxes.

Also companies get a part of the VAT back so they really really want to register the sale into their system or they are out of that (VAT is 24% for most stuff at the moment here in Finland)

Basically the only business where just plain not reporting taxes is still happens sometimes is small scale construction (ie you pay some guy to come and rebuild your bathroom etc).

[vinay427]

> Here cash heavy businesses are rare

The divide here is certainly not between the US and much of Europe. If anything, the US is far closer to the Nordics than much of Europe based on the statistics I could find [1] and my own anecdotes from living in Western/Central Europe.

> For retail/coffee shops/any direct to consumer business you have to pay VAT and thus are required to always print a receipt to the customer.

For what it's worth, this is true in every European country and every part of the US and Canada I've been to. Virtually any store with a physical location will have some PoS system that manages this, and mobile businesses that provide services (such as the construction you mentioned) increasingly do so as well.

[1] https://www.statista.com/chart/19868/share-of-cash-payments-...

[the-dude]

> This means you have to input the sales into the register and now it is in the books and thus really hard to not end up paying all the taxes.

These are typically cash heavy businesses ( as long as it is allowed ) and keeping revenue out of the books is as old as the Romans.

> Also companies get a part of the VAT back so they really really want to register the sale into their system or they are out of that (VAT is 24% for most stuff at the moment here in Finland)

Companies generally deduct all of the VAT on their expenses and it is not a fraction of the revenue. If the sum is negative, our IRS pays up.

Furthermore, in NL coffee is in the low bracket of VAT ( used to be 6%, is now 9% )

> Basically the only business where just plain not reporting taxes is still happens sometimes is small scale construction

I think you are pretty naive here.

[doikor]

> These are typically cash heavy businesses ( as long as it is allowed ) and keeping revenue out of the books is as old as the Romans.

Cash is used in less then 5% of transactions here in Finland (and it is roughly the same in the rest of Nordics last time I checked). Basically I have not carried any cash with me for the last 10 years or so. I am a bit of an extreme case but none of my friends carry any cash with them either these days. Having a cash only business here would just mean that people would not do business with you. If you go to a bar/restaurant/whatever and say "I want to pay" at the end the default is that they bring you the payment terminal.

> I think you are pretty naive here.

I am not that is just how it is here.

Illegal tax evasion still happens but it is not done in the "lets just not put this transaction into our system" way. Most of it is just lying about deductible expenses after that is employing someone without an actual employment contract (and thus nobody is paying any taxes for anything on that). Small scale construction is the one field where the "I'll just take the money and write a fake receipt" is done in any meaningful amount here.

For the record the Finnish tax office collects somewhere between 92 to 96% of the tax revenue it should be receiving according to studies by them and the government. They believe they could get more but in their infinite wisdom every even slightly right leaning government in power has slashed their budgets (and thus less tax auditors) for the last couple decades even though every euro spent on the tax office budged brings in multiple times of that in tax revenue back (there is some limit where that is no longer the case but we are nowhere close to that)

[the-dude]

> Cash is used in less then 5% of transactions here in Finland

How does one compile statistics on unregistered transactions?