Corona situation: Payment arrangements up to 31 August were available under easier terms
The terms for the Tax Administration’s payment arrangements were eased for a limited period because of the coronavirus. The percentage rate of interest was lower for the overdue amounts, and the general terms and conditions for entering into the arrangement with the Tax Administration were more flexible than usual.
Starting 1 September, requests for payment arrangement are again processed according to regular terms. In regular arrangements, the late-payment interest is 7% and if you, the taxpayer, receive any tax refunds after the arrangement’s start date, the amount that otherwise would be paid to you will now be applied on the unpaid taxes covered by your payment arrangement. Read more about payment arrangements.
A temporary change in tax laws was the reason behind the easy-terms arrangement; from 1 May onwards, the interest for late payments of taxes was reduced to 2.5%. Those who have a payment arrangement that has started in 2021 with the eased terms, do not have to have their tax refunds go towards the unpaid taxes. This continues to be in effect for the remainder of 2021.
What is a payment arrangement with eased terms?
If you make a payment arrangement with the Tax Administration, you get more time to pay your taxes: up to 24 months from the date when the decision is made. This means that if an arrangement is in effect, the Tax Administration does not assign recovery actions to collect your tax debts.
Your first instalment under the arrangement falls due when the first month from the arrangement’s start date has elapsed.
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. Please note that if the first instalment of back taxes, real estate tax, inheritance tax or gift tax is included in your arrangement, also the second instalment will automatically be included.
As with normal payment arrangements, the easy-terms arrangements are due to lapse if the taxpayer fails to follow the agreed terms. The 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 the date when the decision was made to approve your easy-terms arrangement, you receive any tax refunds during the remaining months of 2021, the Tax Administration will not use them on the taxes that are included. Instead, we send your tax refund to your bank account unless you owe any taxes that are outside of your arrangement.
For all unpaid taxes that your new payment arrangement with the eased terms covers, the interest is 2.5 per annum, starting 1 May 2021 and ending when the arrangement is over.
However, if your arrangement covers taxes that fell due prior to 1 May 2021, a late-payment interest must be paid. This interest is reassigned to your new eased-terms arrangement as such. In this case, some of your unpaid taxes can carry a 7-percent interest rate, while other unpaid taxes carry a 2.5-percent rate.
If your new arrangement with the eased terms were to lapse, the interest rate would go to 7% starting the next day following the date of the arrangement’s lapse.
If you have an active payment arrangement, you can submit a new request for a payment arrangement with eased terms in MyTax up until 31 August. You can get a new arrangement with eased terms, provided that the conditions are met. One benefit is that taxes covered by a payment arrangement request that is being processed are not transferred to enforcement authorities for recovery.
The payment arrangement enters into force as soon as the Tax Administration has accepted your request. You will be able to see your payment arrangement immediately in MyTax. If your request is rejected, you will see a letter on the rejection in MyTax as soon as the matter has been resolved. If you have not activated Suomi.fi Messages, you will also receive letters on your payment arrangement by post.
If you had not filed your self-assessed tax return before the payment arrangement was made, the Tax Administration was not aware of your self-assessed taxes and they could not be included in the arrangement.
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.
After the Tax Administration has completed the assessment process of your 2020 taxes, your unpaid back taxes can be included in an eased-terms arrangement.
You can find the end date of your assessment process on the tax decision or in MyTax.
- If you request a payment arrangement only for the back tax, we recommend that you wait until the assessment process is over, and then submit your application. However, to enter into an arrangement with the temporary easier terms, you must submit the application by 31 August 2021.
- If the end date of your assessment process is a later date than 31 August, and you cannot pay the back tax you owe – or if you request an arrangement not only for the back tax but for other unpaid taxes, we recommend that you submit a request in MyTax for an additional prepayment. The amount of that prepayment should be the same as your back taxes are. After you have done so, you can request a payment arrangement with eased terms with the additional prepayment included. You can submit that request even if the assessment process has not ended yet.
- After 31 August, you can request a payment arrangement under the usual terms and conditions. Such a request can be submitted after the completion of your tax assessment.
Read more about additional prepayments and how to request them.
Please note that after you have requested an additional prepayment, new tax decisions for 2020 will be made out both for you and for your spouse. This can result in a delayed date of ending the tax assessment process, which concerns both you and your spouse. Consequently, your due dates for back taxes – or the dates when a tax refund would be paid to you – would also be delayed.
Requests for a payment arrangement with eased terms that have been submitted before the entry into force of the Act will be processed by the end of June. Usually it takes about a week to process a payment arrangement request.
The first instalment according to the payment plan is one month after your request has been accepted, and the other instalments follow at 1-month intervals.
When your request for payment arrangement is accepted, any taxes that you are liable to pay and that are falling due within the next 45 days are automatically included in the arrangement.
Check your accepted payment plan to make sure that the tax is really included in your payment arrangement. If it is, you do not need to pay the e-invoice but you can delete it. Instead, you will pay the tax as part of your payment arrangement and use the payment arrangement’s reference number.
Because you used the reference number for the payment arrangement with eased terms, the payment has been assigned to taxes included in the arrangement. However, if your self-assessed taxes (such as employer's contributions) are due before the due date of the payment arrangement, we can re-assign the payment to self-assessed taxes if you so request. The benefit is that you will then not incur new tax debt. If you incurred new debt, your payment arrangement with eased terms would lapse.
If you want us to re-assign the payment, call the Tax Administration’s service number 029 497 026. Note that you must pay the instalments of the payment arrangement and the taxes that are not included in the arrangement by their due dates. Otherwise the payment arrangement will lapse.
Make sure you always use the reference number for the payment arrangement with eased terms when you pay instalments of the arrangement. If you want to pay employer's contributions or VAT, use the reference number for self-assessed taxes. You can find the reference numbers in MyTax.
If you paid a self-assessed tax included in the payment arrangement with eased terms using the reference number for self-assessed taxes, the payment will be used for self-assessed taxes that are not included in the payment arrangement. If you do not have any overdue self-assessed taxes, your payment is placed on an account of unused credit. Due to the special rules applied to the payment arrangement with eased terms, payments on the account of unused credit are currently not used for payable amounts included in the arrangement with eased terms. Read more: How to see your unused credit in MyTax (available in Finnish and Swedish, link to Finnish).
If there is less than one week to the due date of your payment arrangement, you can call the Tax Administration’s service number 029 497 026, if necessary. If there is more than one week to the due date, you can request a refund of your payment in MyTax and pay the instalment again by using the payment arrangement’s reference number. Always remember to use the payment arrangement’s reference number when you want to pay instalments related to the arrangement. You can find the reference number in your payment plan or in MyTax.
Before requesting a refund of your payment, check whether you have any self-assessed taxes not included in the payment arrangement with eased terms that will fall due in the near future. The payment may be needed for these taxes before the due date of the payment arrangement with eased terms. Please note that the arrangement lapses if you have overdue taxes, even if they are not included in the arrangement.