Corona situation: Eased terms for payment arrangements – applications can be made up to 31 August for the new, temporary arrangement
The terms for the Tax Administration’s payment arrangements will be eased for the time being because of the coronavirus. The Government has proposed a temporary reduction of the rate for late-payment interest on taxes covered by payment arrangements. In addition, the Tax Administration will make other terms of the arrangements more flexible.
According to the Government Proposition, the rate of interest is reduced from 7% to 2.5%. Starting 1 May, the reduced rate would apply to all unpaid taxes covered by payment arrangements.
The eased terms aim for supporting small businesses that are having financial difficulties.
The changes in the grounds for granting a payment arrangement and in the eased terms and conditions will enter into force as soon as the amended act on late-payment interest on taxes is adopted. We will update this guide accordingly.
Taxpayers can log in to MyTax to submit an application for a new arrangement between April 21 and August 31, 2021. After the taxpayer’s application is submitted, the authorities stop the recovery of the taxpayer’s unpaid taxes until the Tax Administration has processed the application.
Overview of relevant terms and conditions
A payment arrangement gives you more time to pay your taxes. This means that the Tax Administration will not send your tax debts to the enforcement authorities for recovery when you either have submitted an application for an arrangement, or already have an arrangement.
You can submit an application if
- you do not have any taxes undergoing recovery by enforcement, and
- you have filed all the required tax returns and reports on time, including your earnings payment reports and employer’s separate reports to the Incomes Register.
You are entitled to apply for the new, eased arrangement even if you have had a payment arrangement previously but it has ceased to be in effect. However, this requires that the previous arrangement’s taxes have not yet been transferred to enforcement authorities for recovery. Normally, the rules would not allow any further arrangements to be made with the taxpayer in circumstances described above.
You are entitled to apply for the eased arrangement also if you have a previous arrangement still in effect. This is another new rule that helps give taxpayers more time to pay their taxes. If you have a previous arrangement and you submit a new application, the Tax Administration will make a new payment arrangement with you to replace the previous one entirely.
We recommend that you first decide how long you need your payment plan to be valid – when a new arrangement has been finalised, no changes can be made. This means that it is impossible to make the payment plan longer, but nothing prevents you from sending the payments on an accelerated schedule. Your first instalment will fall due in one month after your new arrangement has been finalised. The maximum period of validity of 24 months.
The arrangements cover all your taxes that are overdue on the day when the arrangement is registered, plus all your upcoming taxes – for which you have filed the tax returns – that fall due in the next 45 days.
As with normal payment arrangements, the eased arrangements will lapse if the taxpayer fails to follow the agreed terms. The payment arrangement lapses if you fail to submit tax returns and other reports on time, if you fail to pay the instalments on time, or if new tax debts are recorded in your account.
If after your payment arrangement request has been accepted, you receive tax refunds some time during the year, the Tax Administration will not use them on any of the taxes included in the new, easier payment arrangement, which you made in 2021. Instead, your tax refund is paid to your bank account unless you owe any taxes that are outside of the eased-terms arrangement.
Requesting a payment arrangement with eased terms
You can submit an application between April 21 and August 31, 2021. If you submitted it sooner, it will be processed according to the regular terms for payment arrangements. If necessary, you can submit a new application later for an eased-terms arrangement to replace the one that was made prior to 21 April.
We recommend that you submit your application in MyTax because then the processing time will be much shorter than for applications submitted by telephone. If you cannot log in to MyTax, call the telephone service on +35829 497 028 to submit your application.
After we have started processing it, enforcement authorities do not recover the taxes that are included, and your company’s tax debt is not published in the tax debt register or on the protest list.
The Tax Administration will process all the received applications when the reduced interest rate has entered into force. There may be some delays if the number of applications is high. However, we always process them in the order in which they arrive.
You do not have to give an account of your financial difficulties. It is enough if you just fill in the desired period of payment. It is important to include your contact information, so that the Tax Administration can reach you if any further information is needed.
The arrangements are for taxes that remain unpaid when their due dates have passed. For this reason, you should not request an arrangement in advance – or “just in case” – if you do not have any unpaid, overdue taxes yet. However, after you have failed to pay a tax and the due date has passed, please submit your application as soon as you can.
Read more: Requesting a payment arrangement
If you have an active payment arrangement, you can request a new one in MyTax starting 21 April. You can get a new arrangement with eased terms, provided that you meet the requirements. One of the benefits is that taxes that are included in an arrangement you are requesting are not transferred to enforcement authorities for recovery until your application has been processed.
No, if a payment arrangement is made between the Tax Administration and yourself in 2021 under the easier terms, no refund that you receive will be used as a tax payment. Instead, your tax refund is paid to your bank account unless you owe any taxes that are outside of the eased-terms arrangement.
In the following circumstances, we still use the money that would otherwise be refunded:
- To cover any unpaid taxes that are outside of your payment arrangement.
- To cover any of your unpaid taxes included in another payment arrangement that was not made in 2021 under the eased terms.
- To pay off your debts if they are in recovery by the Enforcement Authority.