How payments are applied on different taxes
This guidance concerns individual taxpayers, self-employed operators of a trade or business, operators of agriculture or forestry and other taxpayers using the bank reference numbers designed for different types of taxes. The instructions below contain descriptions of how the Tax Administration will allocate paid-in amounts to the taxes of a taxpayer.
Corporate taxpayers use the single general reference number for taxes when paying. Read more about the general reference number for taxes.
Choose the correct reference number
For every taxpayer, the different categories of taxes have their own reference numbers. When making payments, the reference number will determine the matching – often called allocation – of the paid-in amount with the tax you intend to settle. Here is a list of typical categories having their own reference numbers:
- income tax
- self-assessed taxes
- real estate taxes
- transfer tax
- inheritance tax
- gift tax
However, other reference numbers have been issued to some taxpayers. For example, if you are on a payment plan there would be a special reference number connected to the payment arrangement you have.
You can use MyTax or read the payment instructions printed in your tax decision to verify the correct reference number before sending us a payment.
Where can I find the bank account number and the reference numbers?
MyTax instructions: How to pay taxes or check the details needed for paying in MyTax
The reference number for income tax
When you type in the reference number for income tax, the Tax Administration will allocate the payment on your income taxes such as your prepayments, your additional prepayment, and your back taxes. This way, the Tax Administration will use the paid-in amount on all instalments of income tax – including any instalments not yet due.
The Tax Administration will use the amount in the following order:
- overdue income taxes,
- income taxes not yet due,
- income taxes covered by a payment arrangement,
- taxes undergoing enforcement proceedings,
- other overdue taxes belonging to other types of taxes,
- your tax liabilities in the capacity of co-partner, party to an estate, etc.
If after the above, an unused amount is still remaining, the Tax Administration will send it back to you unless there are any records indicating that this cannot be done and unless the Enforcement Authority would place a distraint order on the amount.
Because Emma receives rental income, the Tax Administration has imposed income tax to be prepaid, in 3 instalments, with due dates in February, July and November. Each instalment is €500. The prepayments always fall due on the 23rd of the month.
For the previous year, Emma must pay back taxes. The first €300 instalment will fall due on 1 August and the second €300 – on 1 October.
On 15 July, Emma sends the Tax Administration €600 and types in the reference number for income tax. However, Emma’s prepayment is falling due in July before the back tax falls due. As a result, the Tax Administration will apply €500 of Emma’s payment on the prepayment and only the remaining €100 will go toward the back tax.
Later, on 23 July, Emma sends the Tax Administration €500 and types in the reference number for income tax again. €200 of Emma’s payment will be used on the first instalment of the back taxes and €300 – on the second instalment. This is because Emma’s first payment 15 July already settled her prepayment.
Eddie Entrepreneur runs a business. The Tax Administration has imposed income tax to be prepaid, €1000 every month. The first prepayment for the current year will fall due on 23 January. In addition, a VAT payment of €500 will fall due on 12 January. Eddie Entrepreneur owes no other taxes from before, which would be overdue.
His intention is to send one payment, to pay both the prepayment and the VAT. To do this, he pays €1,500 to the Tax Administration’s bank account typing in the reference for income tax. €1,000 of the payment is used immediately, for the January prepayment, and €500 of it – for the prepayment for February. This is because the reference number Eddie used will make all payments treated primarily as settlements of income taxes, including any income tax that is not yet due.
In other words, Eddie should pay his income taxes using the reference for income tax and his VAT using the reference for self-assessed taxes, so the Tax Administration could allocate the payments as they should be.
Anne Rossi runs a business. The Tax Administration has imposed prepayments, €2,500 per month. The prepayments always fall due on the 23rd of the month.
In addition, Anne must pay a back tax of €3,000 that will fall due on 3 August.
She pays €3,000 to the Tax Administration’s bank account on 15 July, typing in the reference for income tax. Anne’s prepayment for July is falling due 23 July – before the back tax. As a result, the Tax Administration will immediately apply €2,500 of the paid-in amount on the prepayment and the remaining €500 will go toward the back tax.
When she pays €2,500 on 23 July to the Tax Administration’s bank account, again with the reference number for income tax, the Tax Administration will use it on the back tax, for which the due date is 3 August. This is because Anne’s first payment on 15 July already settled the July prepayment.
Chris Taylor runs a business. After requesting an additional prepayment, Chris received a decision, to pay €2,000 as an additional prepayment that will fall due on 21 January. In addition, Chris has to pay the current year’s prepayment amounting to €2,800 by 23 January.
He pays €2,800 to the Tax Administration’s bank account on 23 January, typing in the reference number for income tax. His intention was to cover the current year’s prepayment. Because Chris did not pay the additional prepayment by the due date, the Tax Administration will apply the paid-in amount on the additional prepayment now overdue. A late-payment penalty interest must be added.
The remainder will be used on the current year’s prepayment that fell due 23 January. However, the current year’s prepayment will still remain partially unpaid.
The reference number for self-assessed taxes
When you send a payment and use the reference number for self-assessed taxes, the Tax Administration will book the paid-in amount toward your self-assessed taxes including VAT, withholding tax on paid wages, and on other employer contributions.
The Tax Administration will first use the payment on your self-assessed taxes that have fallen due, in the order of their due dates, from oldest to newest. If there are several self-assessed taxes falling due on the same day, such as VAT and withholdings, the paid-in amount will be applied in the following order:
- amounts withheld,
- the employer’s health insurance contribution,
- value added tax,
- excise duties, and
- other self-assessed taxes.
If after the above have been settled there is still an amount remaining, the Tax Administration will apply it – on respective due dates – on your upcoming self-assessed taxes.
If your paid-in amount was not applied on taxes and you submit a request for refund, the Tax Administration will still use it, during the refunding stage, to settle unpaid taxes in the following order:
- other overdue taxes, outside of self-assessment (such as income taxes and real estate tax, and others),
- all taxes covered by a payment arrangement, also including self-assessed taxes,
- taxes undergoing enforcement proceedings,
- taxes overdue that have been part of a payment plan in a debt arrangement, and
- debts for which you have third-party responsibility.
For an operator of a business, the following self-assessed taxes are falling due 12 March:
- Employer’s contributions — €2,500
- Excise duty (on alcohol) — €1,000
On 10 March, the business operator sends the Tax Administration a payment of €3,500 using the reference number for self-assessed taxes. The Tax Administration will apply the paid-in amount on the employer's contributions and the excise duty on alcohol on 12 March, the due date.
The reference number for real estate tax
When you type in the real estate tax reference number issued to you personally, the Tax Administration will allocate the payment on your real estate tax. This way, the Tax Administration will use the paid-in amount on all instalments of real estate tax – including any instalments not yet due. If you send a payment to the Tax Administration and your intention is to pay up a real estate tax for which your spouse is the actual taxpayer, please type your spouse’s reference number, not yours.
The Tax Administration will use the amount in the following order:
- overdue real estate taxes,
- real estate taxes that have not yet fallen due,
- real estate tax covered by a payment arrangement,
- real estate tax being recovered through enforcement proceedings,
- other overdue taxes belonging to other types of taxes,
- your tax liabilities in the capacity of co-partner, party to an estate, etc.
If after the above, an unused amount is still remaining, the Tax Administration will send it back to you unless there are any records indicating that this cannot be done and unless the Enforcement Authority would place a distraint order on the amount.
Eric and his wife are the co-owners of their house. Both spouses have the first instalment of real estate tax falling due on 6 August.
Eric pays the real estate tax for which Eric is the taxpayer, typing in his real estate tax reference number. He also sends a payment intended to cover his wife’s real estate tax. However, he types his personal reference number again.
As a result, the Tax Administration will use the payment on the second instalment of Eric’s real estate tax. The outcome is that his wife’s real estate tax will still be unpaid, and a late-payment interest will accrue.
The reference number for transfer tax
When you use the reference number for transfer tax when paying, the Tax Administration will apply your payment on a transfer tax. This means that the Tax Administration will not apply it on any other tax.