Back taxes — how to pay them
This guidance is for individuals, self-employed operators of a trade or business, self-employed professionals, partners of general partnerships, partners of limited partnerships, and for individuals with agricultural operations including farm and forestry operators or owners.
If you pay an insufficient sum during the year in the form of withholding — or in the form of income-tax prepayments — you must pay up the difference afterwards as back taxes. The Tax Administration's bank transfer forms for their payment are enclosed with your Tax Decision. The due date of the first instalment of the 2016 back taxes is 29 November 2017; for the second instalment it is 1 February 2018.
If the amount to pay is higher than €170, it is divided in two instalments. If it stays below €170, you must pay it up fully on 29 November 2017. If the amount to pay is less than €10, it is not collected from you at all.
Bank forms distributed to taxpayers in spring
The bank forms for back taxes are distributed in spring: they are enclosed with Pre-Completed Tax Returns. If you made no corrections or additions to your return, the bank forms you received at that time are still in force. You should keep them and use them when it is time to pay the back taxes. However, if changes to your taxation were made in the course of the year, the Tax Administration sends you a new set of bank forms enclosed with a revised Tax Decision. This is done in autumn.
When you send us money by wire transfer, include the international 'RF' reference code. Enter the entire code string including the RF letters (example: RF55 5305 8282 8282 8091 0197). If you have difficulty entering the RF code string, try leaving out the first four characters.
Use the bank forms you received. They contain the amount, the due dates, our bank account numbers and a bank reference code number. Note: the codes for first and second instalment are different.
If the bank forms indicate that you have two installments and you choose to make an extra payment, it is the second installment that it applies to.
Bank forms now have a QR code printed on them (top right) for facilitating payments with a cellular phone/pad.
Paying back taxes by e-Invoice and direct payment
By requesting your e-bank for an e-invoice or making a direct payment agreement with your bank, you can pay your back taxes conveniently and no longer need to remember due dates. Make the agreement early enough so it is validated in time for the due date. You must do so at least three weeks in advance.
If you now request an e-invoice for your real estate tax – or have done so earlier – you will also receive an e-invoice for possible back taxes from the tax year 2016. Similarly, if you request an e-invoice for back taxes, from then on you will receive one for your real estate tax as well. This also goes for direct payment. If you don’t want to pay by e-invoice or direct payment, you can cancel your request. Please note that this also cancels the e-invoice or direct payment of your real estate tax.
Interest on back taxes
For the 2016 taxes that are outstanding, the interest period begins 1 February 2017 and ends on the due date of the first instalment discussed above. The rate of interest for amounts below €10,000 is 0.5%. For the part going over €10,000 the rate is 2.0% in 2017 (this rate is the sum of the Bank of Finland's Reference Rate and 2 percentage points). The rate is reviewed every year. An automatic deduction of €20 is made from the interest. For back taxes relating to 2016, you will actually end up paying interest if the amount owed is €4,788.
Paying back taxes in advance of their due dates
- If you make a payment of either back taxes or supplementary prepayments beforehand, you receive a new Tax Decision and a new set of bank forms that have your arriving payment deducted from both the taxes and the interest on them. For this to happen, you must pay by 30 September. We send you the revised Decision and forms by the end of October. If you still owe some back taxes, the due date 29 November 2017 continues to be in force for the first instalment. And if the amount owed is less than €170, you pay it in one single instalment. However, if the amount you owe is €170 or higher, you pay it in two instalments, one falling due in November, the other in February.
- If you choose to pay up the first instalment in advance in October or in November, the accounting system will apply your payment against the November instalment.
Illustration 1: you have a total of 300 euros of back taxes to pay. This is divided into two 150-euro instalments, the first one falling due in November, and the second one in February. On 13 June 2017, you pay the November instalment €150. Then you get a revised Tax Decision and revised bank forms — the due date of the remaining 150 euros is now November. This means that you cannot avoid the November due date by paying up the first instalment in advance.
Illustration 2: Your total of back taxes is 550 euros, with €275 to pay in November and €275 in February. On 18 July 2017, you pay €200. You get a revised Tax Decision and revised bank forms — the due dates are now €175 in November, €175 in February.
If you pay back taxes before the due date but after 30 September 2017, the Tax Administration does not send you revised bank forms anymore. If you make a partial advance payment of an instalment, please use the same reference number when you pay the remaining amount.
Payments you make after the actual due dates are credited with late-payment interest which you must add to the tax yourself. Use the same bank form. Use the late-payment calculator to figure out the exact amount. If you must pay surtax, and your payment is past due date, you must add late-payment interest to that as well.
Interest period starts on the day after the due date, and ends on payment, and the interest calculation includes both these dates. The interest rate is reviewed every year. In 2017 the interest rate is 7.0%. Its threshold amount is 3 euros.
- Late-payment calculator (www.vero.fi/viivekorkolaskuri)
The Tax Administration sends only one reminder letter for both of the two instalments for tax year 2016.
If you are unable to pay the tax by the due date printed on the reminder letter, you can ask for a payment plan to be agreed with you.
If your tax is undergoing recovery by an enforcement authority, you can no longer pay it to the Tax Administration. Instead, you must pay it to the Enforcement Agency according to the instructions you have received from there. The Agency will collect an additional charge for their services even in cases where the taxpayer had paid the amount to the bank account of the Tax Administration directly.
Note: call the Tax Administration service number 029 497 026 if you have any enquiries about paying your back taxes. However, please call the Tax service number 029 497 050 if you want to ask a question about the amount or about your Tax Decision (including your deductions).