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 Finnish parliament has decided that late-payment interest is temporarily reduced for taxpayers whose taxes are covered by a payment arrangement. In addition, the Tax Administration will make other terms of the arrangements more flexible.

Accordingly, the rate of interest is reduced from 7% to 2.5%. Starting 1 May, the reduced rate is in effect on all unpaid taxes covered by payment arrangements.

This decision and other eased terms aim for supporting small businesses that are having financial difficulties. However, not only businesses but also individual taxpayers are entitled to ask for payment arrangements to be made.

The changes in the conditions for payment arrangements are in force as of 21 June 2021. 

Taxpayers can log in to MyTax to submit an application for an eased-terms arrangement up to 31 August 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.

Please note that the Tax Administration can also reject an application for an arrangement for other reasons. For example, if the business enterprise or the people in charge of the business have a history of neglect, it may constitute a reason for rejection.

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. Please note that if the first instalment of back taxes, real estate tax, inheritance tax or gift tax is included in a payment arrangement, the second instalment will automatically be included in the payment arrangement as well.

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 for an eased-terms arrangement up to 31 August 2021. 

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. 

Request a payment arrangement in MyTax

How to request a payment arrangement in MyTax

The Tax Administration will process the requests for payment arrangement in the order in which they arrive. You will be notified when your request for payment arrangement has been processed. When your application for a payment arrangement is being processed, the taxes concerned by the arrangement are not sent to the enforcement authorities for recovery. Correspondingly, your company’s tax debts are not sent out for publication in the tax debt register or on the protest list.

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

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.

You are not removed from the tax debt register while your request for payment arrangement is waiting for processing. If the Tax Administration accepts your request, you will be removed from the register.

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.