Applying for an extended tax period

For self-assessed taxes such as VAT and employer’s contributions, the default tax period is the calendar month.

Payroll reporting including employer contributions has changed, and the length of the payor's tax period has no impact anymore on when reports must be filed. Read more: How to report wages and employer´s contributions

You must pay the employer's contributions to the Tax Administration as previously, with separate payments for each tax period.

Taxpayers are entitled to submit an application for changing their tax period to a longer one. Once the selection of the tax period has entered into force, it cannot be changed until a year has passed. However, the tax period has to be the same (either the calendar quarter or the calendar month) for filing and paying withheld tax, tax at source and employer's contributions.

If the VAT taxpayer is a primary producer or a creator of works of art with no other operations subject to VAT, the default tax period is the calendar year.

Example 1: Choosing different tax periods for VAT and for employer contributions.  If a business registered for VAT is also a payer of employer's contributions, it may select the calendar year as its VAT tax period while filing and paying its employer's contribution by the month.

Information on every payment of employer's contributions taking place after 1 Jan 2019 must be filed to the Incomes Register, regardless of the employer's tax period. If your tax period is the month, you must pay your employer's contributions once a month.

Applications for extended tax periods can be accepted if the following requirements are satisfied:

  1. You are a VAT payer and your net turnover per calendar year (or other comparable annual sales) is below the threshold of €30,000. On application, the calendar year or the calendar quarter are the possible tax periods, and VAT must then be filed and paid either once a year or once every quarter.
  2. You are a VAT payer and a regular employer (or other similar payor), and your net turnover per calendar year (or other comparable annual sales) is below the threshold of €100,000. On application, the calendar quarter is the possible extended period, and VAT must then be filed and paid once every quarter. Wages and employer's contributions must be filed to the Incomes Register in 5 days after payday, regardless of your tax period. You must pay your employer's contributions to the Tax Administration once every quarter.
  3. If you have neglected some tax returns or have overdue taxes, the Tax Administration will not be able to grant your request for extended tax periods.

The extended tax period is not available to casual employers. They must file and pay their employer's contributions every month. However, starting 1 January 2019, your tax period does not affect the deadlines for employer's contributions filing. Read more: Casual employer

Submitting an application for an extended tax period or changing the tax period

Newly established businesses may use

  • the Start-Up Notification (Forms Y1 - Y3)
  • the Request form for change of reporting and payment periods (Form 4071e).  

Businesses that are already on the Tax Administration's registers can send their application

  • in MyTax
  • on the Request form for change of tax period of self assessed taxes (Form 4071e)
  • Notification form for changes (Y4 – Y6), on which they can inform the authorities of other changes as well.

The Tax Administration sends the applicant an acknowledgement of the changed tax period enclosed with information on the the start date of the new tax period. Up to the time when the letter arrives, the applicant must continue to file and pay within the framework of its original tax period. If the turnover of the business has gone over the threshold, the Tax Administration sends the applicant a letter stating that the requested extension of the tax period cannot be granted. Similarly, if the applicant has neglected its tax returns or has overdue taxes, the Tax Administration will not be able to grant the extension.

You must keep the same tax period for at least one year. A business may ask for having its tax period changed when at least 12 months have elapsed since the start of its operation, or from the date when a change was last requested.  

If a tax period is made longer, its start date is always the first day of the next calendar year.

Example 1: Your tax period is the calendar month. In October 2018, you ask for the quarterly tax period. The change to your new, extended tax period is effective as of January 2019.

If the tax period is made shorter, it begins the first day of the shorter tax period that comes after the date when you submitted your application.

Example 2: Your tax period is the quarter. In May, you file an application to get the monthly tax period. The change to your new tax period is effective as of June. In these circumstances, you must file a return for the tax period just before the change date (spanning the time between April 1 and May 31) by the general due date for July. The VAT for June must be filed and paid by 12 August.

From 1 Jan 2019 on, employer's contributions must be filed to the Incomes Register. This is not affected by the length of the employer's tax period. The Incomes Register expects an earnings payment report for each payday in 5 days. Employer's separate reports on contributions must be submitted by the 5th of the month following the payday month. In this example, you would have to pay the employer's contributions for April, May and June to the Tax Administration by 12 July.

If the taxpayer's tax period has been the year, and they change it to the quarter, this will become effective as of the start of the calendar quarter that follows the date when the application was submitted.

Example 3: Your business's tax period is the calendar year. In May, you ask for the quarterly tax period. The change to your new tax period is effective as of July. You must file and pay VAT for the January-June period by 12 August. Correspondingly, you must file and pay VAT for the July-September period by 12 November.

From 1 Jan 2019 on, employer's contributions must be filed to the Incomes Register. This is not affected by the length of the employer's tax period. The Incomes Register expects an earnings payment report for each payday in 5 days. This report must also show the amounts you have withheld. Employer's separate reports on contributions must be submitted by the 5th of the month following the payday month. You have to pay your employer's contributions for July, August and September to the Tax Administration by 12 November.

Businesses with the extended tax period must inform the Tax Administration of a growth in turnover

If your sales are likely to go over the threshold (€30,000 / €100,000) during the current or next calendar year, you must immediately report it

  • in MyTax
  • on a completed Request form for change of tax period of self assessed taxes (4071e)
  • on a Notification form of changes form (Y4 - Y6), if you inform the authorities of other changes as well.

The Tax Administration will inform you of the date when your new tax period comes into force.

Your tax period can be changed to a shorter period during the ongoing tax period, as well. In this case, you must file a return for the months belonging to the old tax period and pay your taxes for them sooner than you would with the old tax period’s usual due date. You must file the return and pay the taxes by the general due date of the month following the first calendar month of your new tax period.

Employer's contributions must be filed to the Incomes Register. This is not affected by the length of the employer's tax period.

Example 1: Your business's tax period is the quarter. In April, you file a notification on your own initiative to the Tax Administration stating that you no longer meet the requirements for the extended tax period. The Tax Administration changes the tax period to the shorter, one-month period as of May.

For the January-March period, your VAT return must be filed and the taxes paid by 12 May. For the April period, VAT must be filed and paid by 12 June. For May, VAT must be filed and paid by 12 July.

From 1 Jan 2019 on, employer's contributions must be filed to the Incomes Register. This is not affected by the length of the employer's tax period. The Incomes Register expects an earnings payment report for each payday in 5 days. This report must also show the amounts you have withheld. Employer's separate reports on contributions must be submitted by the 5th of the month following the payday month.

For the January-March period, you must file and pay your employer's contributions to the Tax Administration by 12 May. For April, you must file and pay your employer's contributions to the Tax Administration by 12 June. Also, for May, you must file and pay your employer's contributions to the Tax Administration by 12 June.

If growth in turnover takes place but the business taxpayer does not inform the authorities of it, the Tax Administration may impose a forced transfer to the shorter tax period. This process is possible if it has become obvious that the business is no longer entitled to the extended period.  The Tax Administration sends a letter to the business taxpayer notifying them of the transfer.