How refunds of self-assessed taxes are paid out

We pay refunds to taxpayers without delay, in accordance with the agreed refund dates and thresholds once the taxpayer's right to receive the payment is verified and if the refund is not going to be applied to any unpaid tax or other outstanding amount.  Refund payments may consist of negative VAT, decreases in amounts to pay a taxpayer-reported tax or a Tax Administration-debited tax, payments that have arrived from the taxpayer, and credit interest. The minimum refund total is 20 euros.  

Refund time and making changes to it

The Tax Administration pays refunds for self-assessed taxes (for example negative VAT) immediately after processing if the taxpayer has not selected a different refund time or set a limit and there are no other factors to prevent the refunding.

You can specify the refund time so that the refund either remains on the account to cover any future liabilities, or is paid out immediately after its processing is complete.

You can make changes to refund times and limits in MyTax. (tax.fi/mytax).

Refund time alternatives

The default value is to pay a refund to the taxpayer immediately (for negative VAT, for refunds due to tax decreases, for credit interest).   However, the earliest possible date for refunds of negative VAT is after the general due date of the month following the tax period. The refund does not remain unrefunded so as to wait for any upcoming taxes. When taxpayers have made payments, the money is refunded on request.

Example 1: Your tax period is the month. On 3 March, you file a return where you report negative VAT for January and your employer contributions for February.  The negative VAT is refunded as soon as the Tax Administration has processed your return, provided that you have no unpaid taxes outstanding, including any employer contributions that fall due during the same calendar month.

Example 2: Your tax period is the month. On 3 February, you filed a return (i.e. your return arrived before the general due date of the month after the tax period) where you report negative VAT and your employer contributions for January.  The negative VAT will be applied to the employer contributions that fall due 12 February. If any money is left over after the payment of those self-assessed taxes that fell due, it is applied to any other receivables of the Tax Administration or to debts you may have outside the Tax Administration (at the Enforcement Agency, for example). Any excess that may remain is then refunded to you.

Example 3: The VAT tax period of a self-employed business owner, or of a primary producer, is the calendar year. On 4 January, they filed a return (i.e. before the due date of the month after the tax period) where they report negative VAT accrued the year before.  This negative VAT is refunded as soon as the return is processed, however, not until 12 January has passed.  That date is the general due date following the tax period (which is the calendar year in this case). The return for the previous year may not be filed until all transactions affecting the VAT for the calendar year have been cleared up.  If any money is left over after the payment of any self-assessed taxes that fall due, it is applied to any other receivables of the Tax Administration or to any debts outside the Tax Administration (at the Enforcement Agency, for example). Any excess that may remain is then refunded to the taxpayer.

A refund is made up of negative VAT, of decreases in amounts to pay taxes, and of credit interest. Similarly, it may be made up of payments that had arrived from the taxpayer but were not used.

The taxpayer's tax period is the month: The refund will stay on the account waiting for the next general due date following the day of filing the tax return. Then it will be applied to any self-assessed taxes that fall due.  If any money is left over, it is applied to any other receivables than those relating to self-assessment. Any excess that may remain is then refunded. If the taxpayer files a return indicating negative VAT on the due date, it will be applied to any receivables of the Tax Administration falling due on that due date.

Example: Your tax period is the month.  On 3 March, you file a return where you report negative VAT for January and your employer contributions for February. The negative VAT is applied to paying the employer's contributions that fall due on 12 March. If any money is left over after the payment of those self-assessed taxes that fell due, it is applied to any other receivables of the Tax Administration or to debts you may have outside the Tax Administration (at the Enforcement Agency, for example). Any excess that may remain is then refunded to you.

Example: A business taxpayer's tax period is the month. On 15 March, the business filed a return indicating that its VAT for February was negative.  The negative VAT is applied to paying the employer's contributions that fall due on 12 April. If any money is left over after the payment of any self-assessed taxes that fall due, it is applied to any other receivables of the Tax Administration or to any debts outside the Tax Administration (at the Enforcement Agency, for example). Any excess that may remain is then refunded to the business.

The taxpayer has an extended tax period: Refunds are left waiting for the tax period's due date. If the taxpayer does not file the return until after the due date, the refund is created by the IT system on the general due date of the next month.

Example: A taxpayer's tax period is the quarter, and they have filed a tax return for the first quarter on 15 April indicating that VAT has been negative. The refund will remain unpaid, waiting for the due date pertaining to the tax period i.e. 12 May. If any money is left over after the payment of any self-assessed taxes that fall due, it is applied to any other receivables of the Tax Administration or to any debts outside the Tax Administration (at the Enforcement Agency, for example). Any excess that may remain is then refunded to the taxpayer.

Example: A taxpayer's tax period is the quarter, and they have filed a tax return for the first quarter on 15 May indicating that VAT has been negative. The refund will remain unpaid, waiting for the next general due date i.e. 12 June. If any money is left over after the payment of any self-assessed taxes that fall due, it is applied to any other receivables of the Tax Administration or to any debts outside the Tax Administration (at the Enforcement Agency, for example). Any excess that may remain is then refunded to the taxpayer.

The entire refund will remain on the taxpayer's account waiting for any future taxes (or other Tax Administration's receivables), and nothing is refunded to the taxpayer. Negative VAT, refunds caused by tax decreases, credit interest, and also the payments the taxpayer may have made are kept on the account. However, on the last day of the month, the refund or part of it is applied to any tax debts of the taxpayer.

Example: Your tax period is the month. On 3 March, you file a return where you report negative VAT for January and your employer contributions for February. The negative VAT is applied to the employer's contributions falling due on 13 March, and any leftover money will stay on the account to wait for any upcoming taxes.  On the last day of the month, it is applied to any tax debts or to any debts outside the Tax Administration (at the Enforcement Agency, for example).

How to set a refund limit

Taxpayers may set a threshold amount in euros as their refund limit if they have chosen "Refund immediately after processing" or "Refund after the next general due date" as their refund time. Then the Tax Administration will only refund the amounts that exceed the limit to the taxpayer. The amount below the threshold stays on the account for covering any taxes that fall due later. On the last day of the month, refund money can be applied to other taxes that have fallen due although the taxpayer had set a refund limit.

Credit interest on refunds

Interest is accrued on the refundable amount. The rate of interest paid on a credit balance is the reference rate of Bank of Finland, in force during the six months preceding the current calendar year, minus two percentage points.  However, it cannot be less than 0.5%. It is reviewed every year. In 2018, the interest rate is 0.5%.

If VAT is to be refunded to the taxpayer, credit interest accrues on it from the day after the VAT due date up to the day when the sum is applied to paying up other taxes, or to the day when a refund is paid out from the Tax Administration's bank account.

Example: The taxpayer's tax period is January.  A tax entitling the taxpayer to a refund will accrue interest starting 13 March, the day that comes after the general due date in March.

Example: The taxpayer's tax period is January to March. Credit interest begins to accrue on the day after the general due date for May i.e. on 13 May.

If the tax period for VAT is the calendar year, the last day to file the tax return for VAT is the last day of February; consequently, credit interest begins to accrue on 1 March.

The received credit interest is not subject to income tax.

Refunds are paid on bank accounts

The primary way to pay refunds is to direct-transfer them to taxpayers' bank accounts.  The Tax Administration database can only have one bank account number per taxpayer.

You can use the MyTax e-service for submitting your bank account number. If you have not given us your account number, we pay the refund through a payment order via the bank. Tax refunds under €15 are paid as money orders only at the taxpayer’s request. For instructions on how to receive such a refund, read the guidance printed on the payment order that the bank sends you. The payment order can only be sent to a Finnish address.

A refund paid to your bank account will reach you approximately one week sooner than a refund via a payment order.

Refunds can be used for unpaid taxes

Tax Administration may settle unpaid taxes (or comparable charges) that are due for The Tax Administration may settle unpaid taxes (or comparable charges) that are due for payment to the Tax Administration with the refund. Alternatively, it can be used for settling certain receivables of parties outside the Tax Administration. We can also use a refund for covering any third-party tax debts an individual taxpayer may be liable for. We always send a message to the recipient of the refund on how the amount has been used.

Payments of refunds are prevented in case of non-filing

If the taxpayer has not filed their tax return on self-assessed taxes by its due date, or has filed incomplete returns, the Tax Administration cannot pay a refund. This rule concerns both self-assessment and corporate income tax: if the taxpayer is a non-filer of self-assessed returns or income tax returns, the Tax Administration cannot pay either types of refund. If tax returns that are not filed as they should, information on non-filing will appear in MyTax the day after the deadline for filing.

Another possible reason for delays in refunding is that the taxpayer's bank account information or address are incomplete. In such circumstances, no refund is made; the money stays on the account and is applied against the taxpayer's upcoming taxes. Information on the refunds that are not paid is available in MyTax.

Refunding a mistaken payment made by the taxpayer

If a taxpayer of self-assessed taxes has paid in an amount by mistake or for an incorrect reason, it may be refunded on the taxpayer's request.  Minimum refund is €20. Requests may be filed in MyTax.

You can make changes to refund times and limits in MyTax.

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