Using a payment for different taxes

This guidance is for both individual and corporate taxpayers. It contains information about how the taxpayers’ payments are used for different taxes.

Use the correct reference number

Different tax types have different reference numbers. The reference number determines which tax a specific payment is used for in the first place. Tax types that have their own reference numbers include:

  • income taxes, such as prepayments, additional prepayments and back taxes
  • self-assessed taxes, such as employer contributions and VAT
  • inheritance tax
  • gift tax
  • real estate tax
  • transfer tax.

In different situations, other references may also be used, such as a reference for overdue taxes (taxpayer reference) or a reference for a payment plan.

You can check the reference numbers in MyTax or in the payment instructions printed in the tax decision. If you receive a summary containing a payment request, you can also find the appropriate reference number there.

How to find the correct reference number in MyTax

Paying tax with the reference number for income tax

Use the reference for income tax if you primarily wish to pay income tax, i.e. prepayments, additional prepayments or back taxes. When you use the income tax reference, the amount you pay is used first for all your income tax instalments – including those not yet due – and only then for other taxes.

The payment is used for due and not yet due income taxes in the order of due dates. When all the income tax instalments have been paid, the payment will be used for your other overdue taxes and tax debt liabilities. The rest of the payment will be refunded unless there is an obstacle to refunding or the refund is distrained.

Payments made with the reference number for income tax are used for taxes in the following order:

  1. overdue income taxes
  2. income taxes not yet due
  3. income taxes covered by a payment plan
  4. income taxes that are being collected through enforcement
  5. other overdue taxes
  6. your tax liabilities in the capacity of co-partner, party to an estate, etc.

Emma Example must make prepayments on rental income in three instalments: in February, July and November. Each instalment is €500. The prepayments fall due on the 23rd of each month. Emma has also been imposed back taxes for the previous year. The first €300 instalment falls due on 1 August and the second on 1 October.

On 15 July, Emma pays €600 with the intention of paying the back taxes, and uses the reference number for income tax. She has no overdue taxes at that time. A prepayment for July falls due before the back tax, so €500 of Emma’s payment is used immediately for the prepayment, and the remaining €100 is used for the first instalment of the back taxes.

If, in addition, Emma pays €500 on 23 July with the intention of paying July’s prepayment and uses the reference for income tax, €200 of the payment will be used for the first instalment of the back taxes and €300 for the second instalment. This is because July’s prepayment has already been settled with Emma’s earlier payment.

Eddie Entrepreneur has been imposed prepayments of €1,000 per month. The first instalment falls due on 23 January. In addition, a VAT payment of €500 falls due on 12 January. He has no overdue taxes to pay.

Eddie’s intention is to pay both the prepayment and the VAT on 9 January. He pays €1,500 using the reference number for income tax. €1,000 of the payment is used for January’s prepayment and €500 for February’s prepayment. The reference number allocates the payment, in the first place, to income tax, including instalments that are not yet due.

In other words, Eddie should pay his income taxes using the reference for income tax and his self-assessed taxes using the reference for self-assessed taxes, so that the payments could be allocated correctly and he would avoid late-payment interest.

A corporate taxpayer has been imposed prepayments of €2,500 per month. The prepayments fall due on the 23rd of each month. The taxpayer also has €3,000 in back taxes from the previous year, and they fall due on 3 August.

On 15 July, the taxpayer makes a payment of €3,000 with the intention of settling the back taxes and uses the reference for income tax. The corporate entity has no overdue taxes at that time. Their July prepayment falls due on 23 July, i.e. before the back taxes, so €2,500 is used for the prepayment and the remaining €500 for the back taxes. If, in addition, the taxpayer pays €2,500 on 23 July with the intention of paying July’s prepayment and uses the reference for income tax, the payment will be used for the previous year’s back taxes. This is because the prepayment has already been settled with the earlier payment.

A corporate taxpayer has requested an additional prepayment of €2,000 for the previous tax year, and it falls due on 21 January. In addition, the corporate entity has employer contributions of €1,500 falling due on 12 January and the current year’s prepayments of €2,800 falling due on 23 January.

They pay €3,500 on 14 January using the reference number for income tax. Their intention is to pay both the additional prepayment and the employer contributions in one go. €2,000 of the payment is used for the additional prepayment and the remaining €1,500 for January’s prepayment. The payment has now been used up, so there is nothing left for the employer contributions.

The taxpayer should pay income taxes and self-assessed taxes using their dedicated reference numbers. In this case, the taxpayer pays €1,500 by the due date of the self-assessed taxes, i.e. 12 January, using the reference for self-assessed taxes, and €2,000 by the due date of the additional prepayment, i.e. 21 January, using the reference for income tax. This way, the taxpayer avoids any late-payment charges.

Paying tax with the reference number for self-assessed taxes

Use the reference number for self-assessed taxes if you want to pay self-assessed taxes, such as employer contributions and value added tax. Your payment will be used first for overdue self-assessed taxes. If you have no overdue taxes, the payment will be kept waiting for your future self-assessed taxes. The payment can also be used for other overdue taxes at the end of the month or if the payment would otherwise be refunded.

If you use the reference number for self-assessed taxes, the payment will be used as follows:

  1. overdue self-assessed taxes
  2. self-assessed taxes that are being collected through enforcement
  3. self-assessed taxes covered by a payment plan or an amount according to a payment arrangement set by a court of law – not until the end of the month or if the payment would otherwise be refunded
  4. other overdue taxes – not until the end of the month or if the payment would otherwise be refunded
  5. your debt liabilities – not until the end of the month or if the payment would otherwise be refunded

Guidance on payments for self-assessed taxes.

Refund time and refund limit affect the order of use

You can set the refund time and refund limit for self-assessed taxes in MyTax. It depends on the refund time setting whether a refundable amount is kept waiting for future taxes or refunded to you immediately as the processing has ended. It also affects the order in which your payment is used for taxes.

Read more about refunded payments as well as refund times and refund limits

The taxpayer’s self-assessed taxes – €3,000 in VAT and €2000 in employer contributions – fall due on 12 March. The taxpayer files self-assessed taxes on a monthly basis. In addition, a prepayment of €1,000 falls due on 23 March. The taxpayer’s intention is to pay all the taxes in one go on 9 March, and so they make a payment of €6,000, using the reference for self-assessed taxes.

If the refund time selected by the taxpayer is ‘immediately after processing': 

€5,000 of the payment will be used for the self-assessed taxes that fall due on 12 March. The remaining €1,000 will be kept waiting. A payment made with the reference for self-assessed taxes will be used for other than self-assessed taxes at the end of the month or if it would otherwise have to be refunded. For this reason, the remaining €1,000 is not used for the prepayment until 31 March, which means that late-payment interest will be calculated on the prepayment for 24–31 March.

Note: If the refund time is ‘immediately after processing’, unused payments will not be refunded except at the taxpayer’s request.

If the refund time selected by the taxpayer is ‘after the next general due date’: 

€5,000 of the payment will be used for the self-assessed taxes that fall due on 12 March. The remaining €1,000 is refunded to the taxpayer if they have no other overdue taxes. In this case, the prepayment remains unpaid.

Note: If the refund time is ‘after the next general due date’, then any unused payments will be refunded automatically.

In this example, it would be advisable for the taxpayer to pay

  • €5,000 in self-assessed taxes by the due date of 12 March, using the reference for self-assessed taxes
  • €1,000 in prepayments by the due date of 23 March, using the reference for income tax

This way, the taxpayer avoids any late-payment charges.

Paying tax with the reference number for overdue taxes

You can use the reference number for overdue taxes (taxpayer reference) to pay overdue taxes.

The payment is used for your taxes in the following order:

  1. overdue taxes primarily in the order of statute dates and secondarily in the order of due dates
  2. overdue taxes covered by a payment plan
  3. taxes that are being collected through enforcement
  4. other overdue taxes – not until the end of the month of if the payment would otherwise be refunded
  5. your debt liabilities – not until the end of the month of if the payment would otherwise be refunded.

On 12 September, €800 in employer contributions falls due. In addition, the taxpayer has been imposed back taxes for the previous year, and the first €200 instalment falls due on 1 September.

The taxpayer’s intention is to pay the overdue employer contributions and back taxes in one go on 15 September, and they make a payment in MyTax using the reference number for overdue taxes. The taxpayer can see the tax amount with interest in MyTax. The payment is used first for the back taxes and their late-payment interest and then for the employer contributions and their late-payment interest.

€500 in real estate tax falls due on 6 October. Of self-assessed taxes, €2,400 in VAT and €600 in employer contributions fall due on 12 October. In addition, the taxpayer also has €1,000 in prepayments to pay, and the due date is 23 October. The taxpayer is registered for VAT.

They pay €4,500 on 12 October, using the reference number for overdue taxes (taxpayer reference). The taxpayer’s intention is to pay, in one go, the self-assessed taxes falling due on 12 October, the real estate tax falling due on 6 October, and the prepayment falling due on 23 October.

If the refund time selected by the taxpayer is ‘immediately after processing’:

Part of the payment is used immediately on 12 October to pay the real estate tax and its late payment interest, and then €3,000 is used for self-assessed taxes. The remaining amount is kept waiting for taxes falling due later. At the end of the month, on 31 October, the payment is used to pay the prepayment and its late-payment interest. Interest is calculated on the prepayment for 24–31 October and on the real estate tax for 7–12 October.

If the refund time selected by the taxpayer is ‘after the next general due date’:

Part of the payment is used immediately on 12 October to pay the real estate tax and its late payment interest, and then €3,000 is used for self-assessed taxes. The remaining part of the payment is refunded to the taxpayer, as they have no other overdue taxes on the date of payment. The payment is thus not used for the prepayment.

If the taxpayer makes the same payment of €4,500 on 23 October, using the reference number for overdue taxes:

The payment is used first for the real estate tax and its late payment interest, and then for the self-assessed taxes and their late payment interest. The remaining part of the payment is then used for the overdue prepayment. Late-payment interest is calculated on the real estate tax for 7–23 October and on the self-assessed taxes for 13–23 October.

In this example, it would be advisable for the taxpayer to pay

  • real estate tax by 6 October, using the reference number for real estate tax
  • self-assessed taxes by 12 October, using the reference for self-assessed taxes
  • prepayment by 23 October, using the reference for income tax.

Paying tax with the reference number for real estate tax

When you pay the real estate tax, use the payment details found in the decision on real estate tax or in MyTax, i.e. the bank account number, reference number, amount of real estate tax, and due date.

When you use the reference for real estate tax, your payment is used primarily for real estate taxes. However, you cannot choose the instalment that your payment is allocated to. Your payment will be used for all instalments of real estate tax – including instalments not yet due – in the order of due dates, before it is used for any other taxes. If all the real estate tax instalments have been paid, the payment will then be used for your other overdue taxes and tax debt liabilities. The rest of the payment will be refunded unless there is an obstacle to refunding or the refund is distrained.

You can use your own payment details only to pay your own real estate tax. In other words, you cannot use your own details for example to pay your spouse’s real estate tax.

Eddie Entrepreneur has two real estate tax instalments to pay, €600 each. The due dates are 6 August and 6 October. In addition, a VAT payment of €500 falls due on 12 August. Eddie has no overdue taxes to pay.

Eddie’s intention is to pay both the real estate tax and the VAT in one go. He makes a payment of €1,100 on 6 August, using the reference for real estate tax. €300 of the payment is used immediately for the first instalment of the real estate tax, and €300 is used for the second instalment. The rest of the payment is then refunded unless there is an obstacle to refunding. The reference number allocates the payment, in the first place, to real estate tax, including instalments that are not yet due. The payment is not used for overdue taxes of other tax types.

Therefore, Eddie should pay his real estate taxes using the reference for real estate tax and his self-assessed taxes using the reference for self-assessed taxes, so that the payments could be allocated correctly and he would avoid late-payment interest.

Paying tax with the reference number for transfer tax

When paying transfer tax, you must use the reference for transfer tax, so that the payment can be allocated correctly. The reference number for transfer tax is taxpayer-specific, and it does not change.
The payment details, such as the reference number and the Tax Administration’s bank account number, can be found in MyTax, and you can also get them by calling our telephone service. You can pay the tax either in MyTax or in your online bank.

Starting November 2019, transfer tax is no longer paid with a separate bank transfer form.

On 2 August, Emma Example files €2,000 in transfer tax. In addition, €300 in real estate tax falls due on 6 August.

Emma has paid the transfer tax on 30 June using the reference for transfer tax, but the amount she has paid is €2,200. €2,000 of the payment is used for the transfer tax on 2 August, i.e. immediately as the tax return is received.

However, the €200 paid in excess is not used for real estate tax immediately. The excess amount can be refunded to Emma at her request. If Emma has other overdue taxes at the time of refund, the refundable amount will be used first for the overdue taxes and only then paid back.