Refund applications for source taxes have shorter deadlines in 2017

Tax Administration Bulletin, 11/15/2016

The period when an application can be submitted, and also the appeal period, are shorter in 2017. Application deadline is three years instead of five. If an appeal needs to be lodged against a decision on refund, the new deadline is 60 days.

Three-year period for applications

If too much tax was withheld at source, the taxpayer may ask for refund during the three calendar years that follow the year of withholding.  The new deadline is first applied on dividends paid in 2017.

Illustration: A beneficiary of dividends from a Finnish payer receives them in 2017. Source tax was withheld at the rate of 30%. However, the applicable tax-treaty provisions would entitle the beneficiary to 15% source tax instead.  The beneficiary may ask the Tax Administration for a refund in 2018, 2019 or 2020. His application must arrive to the Tax Administration by 31 December 2020.

Appeal period is shortened to 60 days

Under the new rules, the deadline for lodging an appeal against a refund is 60 days of the date when the beneficiary received the decision letter. They are delivered by post, and the practice is to allow 7 days for postal delivery after the date when a letter was sent.  The new appeal period will apply to the refund decisions made by the Tax Administration after the amended Act has entered into force, i.e. after 1 January 2017.

Illustration: A decision on no refund of source tax has been received by a taxpayer. It is dated 23 January 2017, posted 24 January 2017 according to its "mailed date". The taxpayer is deemed as having received information on what was decided after seven days have elapsed after the day when the letter was sent, i.e. on 31 January 2017.  The end date for the appeal period would fall on Saturday 1 April 2017. This means that the following business day, Monday 3 April 2017, will be the final day when the taxpayer is allowed to lodge an appeal.

Completing the application form is required  

It is no longer permissible to submit an application on a free-text letter or by filling out an old version of the Tax Administration's application form. The forms available on for downloading are now required.