Corporate restructuring and bankruptcy
Debtors that have financial difficulties may apply for corporate restructuring.
The purpose of restructuring may be to restore the viability of the healthy parts of the business or to facilitate their operation, and to make debt adjustment possible. The decision to start a corporate restructuring process is made by a court of law.
Reporting VAT and pay data at the beginning of corporate restructuring
Value added tax data is submitted to the Tax Administration by using the tax return for self-assessed taxes. All information on wages, salaries and employer’s contributions paid on 1 January 2019 or later must be reported to the Incomes Register. The information is shown in MyTax, where the taxpayers also can look up the sum they must pay for the current tax period. The total amounts of wages subject to tax withholding and employer’s contributions can always be viewed in MyTax on the seventh day of the month following the tax period.
When corporate restructuring is underway, the debt balance subject to restructuring is determined as of the date when the application for restructuring has become pending. However, as creditor, the Tax Administration applies the principle of not splitting any tax periods. As a result, the debtor does not have to split the self-assessed tax return for the period when the application became pending. Instead, the debtor must file a similar return as is filed for any tax period. The self-assessed tax is included fully in the debt balance for the period when the application became pending (unless the application date is the first day of a calendar month).
Debtors can be put into bankcruptcy
A debtor who has an unpaid tax debt may be declared bankrupt. The petition for bankruptcy may be filed to a court by the debtor, or by the Tax Administration as creditor.
For more information on bankruptcy proceedings (www.konkurssiasiamies.fi)