A new procedure for prepayments
Part of: Tax reforms
The supplementary prepayment has been replaced by an additional tax prepayment, i.e. prepayment that is determined after the end of the tax year. For the purposes of supplementing prepayments after the end of the tax year, an application for an additional tax prepayment must be submitted to the Tax Administration.
Corporations and joint administrations must file their applications for prepayments and additional prepayment online.
The deadlines for applying for prepayments and changes to prepayments are extended, and paid prepayments are validated at the value cited by the Tax Administration's decision to impose the prepayment.
Supplementary prepayment has been abolished
Supplementary advance payments may be made until the entry into force of the tax reforms. The final date of payment depends on the customer group:
- corporations and joint administrations: 31 Oct 2017
- individual taxpayers and other taxpayers: 31 Oct 2018.
Supplementary advance payments made by 31 October 2017 by corporations and joint administrations for the 2017 tax year and following tax years will be taken into account in the same way as any prepayment paid by the said due date. Read more about paying prepayments.
Corporations and joint administrations can supplement their prepayments interest-free for one month after the end of the tax year. As of November 2017, interest will be calculated for additional prepayments of corporations and joint administrations whose accounting periods end in January–September 2017. Read more about interest on prepayments.
Extended deadlines for determining, changing and waiving prepayments
Applications for changes to prepayments may be submitted up to the end of the tax assessment:
- During the tax year, you can apply for prepayments or for your prepayments to be increased, lowered or waived.
- After the tax year has ended, you can apply for your prepayments to be lowered or waived, or supplement the taxes you have prepaid by applying for an additional prepayment.
The deadline for decisions on prepayments made at the Tax Administration’s initiative has changed:
- The Tax Administration can impose and increase prepayments up to the end of the second month after the end of the tax year.
- The Tax Administration can lower or waive prepayments up to the end of the tax assessment.
Apply for prepayments online
As of November 2017, corporations and joint administrations will have to apply for prepayments, changes to prepayments and any additional prepayments online. An application can be submitted via MyTax, Ilmoitin.fi, or Tyvi reporting services.
When a corporation or joint administration applies for prepayments via MyTax, the prepayment decision and payment details will be provided immediately. A decision on lowering or waiving prepayments, or increasing them during the tax year, will be provided after a certain processing time. Previously imposed prepayments will remain valid until the application has been processed. Applications for a change to prepayments may only be submitted on paper for a special reason, such as technical failure. However, no special permission is needed in these cases, and the Tax Administration does not need to be notified in advance of the reason for filing on paper. The Tax Administration may ask for the reason in connection with tax control. Paper applications concerning prepayments will take longer to process.
Please note the prepayment due dates during and after the tax year
The due date for prepayments that fall due during the tax year is the 23rd day of the month or the following banking day.
The due date for a prepayment to be made after the tax year is no later than three weeks after the date of the decision to impose the prepayment.
When you use MyTax to apply for an additional prepayment after the end of the tax year, you can choose the due date for the additional prepayment. It can be the same day or any date no later than three weeks in the future. However, the due date must be a banking day.
Do not forget the interest calculated on prepayments
Interest will not be accrued and paid with the prepayment if
- the prepayment due date falls within the tax year or the first month following the tax year, and
- the prepayment is made on the due date at the latest.
However, if the prepayment due date is the first day of the second month following the tax year or a later date, a discounted late payment interest of 2 per cent (in 2017) will be calculated on the prepayment. Interest is accrued from the first day of the second month following the end of the tax year until the due date of the prepayment. Interest is always calculated on an additional prepayment up to its due date, even if the prepayment is paid before the due date. The due date for an additional prepayment must also be a banking day.
If you pay the prepayment after the due date, late payment interest of 7 per cent (in 2017) will be calculated from the day following the due date until the tax is paid.
The new provisions on late payment interest will be applied for the first time on an unpaid prepayment of a corporation or joint administration from 1 November 2017. The provisions will be applied to other taxpayers from 1 November 2018.
The provisions on discounted late payment interest will be applied for the first time to the prepayments imposed on corporations and joint administrations on or after 1 November 2017. The provisions will be applied to other taxpayers starting on 1 November 2018. Read more about the changes to the calculation of interest.
Changes to the crediting of paid-in prepayments
For tax purposes, the paid-in prepayments of corporations and joint administrations are validated at the value cited by the Tax Administration's decision to impose the prepayment.
If prepayments are left unpaid that were intended to cover the tax year's taxes, they will not be removed from collection and recovery processes. Collection and recovery will continue until the imposed prepayments have been paid or waived, or they have fallen under the statute of limitations. This means that an unpaid prepayment will not be reintroduced as back taxes.
The new procedure will apply to corporations and joint administrations as of the 2017 tax year, and to other taxpayers as of the 2018 tax year.