Supplementary prepayment by an individual taxpayer

This guidance is for individuals, self-employed operators of a trade or business, partners of general partnerships, partners of limited partnerships and individuals with agricultural operations, including farm and forestry operators or owners.

You can avoid paying interest on back taxes for 2017 if you pay a supplementary prepayment in good time. You can avoid paying interest for 2017 entirely if you pay a sufficient supplementary prepayment by no later than 31 January 2018.

You can reduce the interest at a later date with a supplementary payment between 1 February and 30 September 2018. As the last date of payment is a Sunday, you can pay the supplementary payment on the next weekday, that is 1 October 2018. In practice, interest is charged on back taxes for the 2017 tax year only if the amount of back taxes is more than about EUR 4,788. The sum has been calculated on the basis of the back tax due dates.

It is worth it to pay supplementary prepayments for capital gains, options or new rental income, for instance, if no tax prepayments have been imposed for them. You can also pay supplementary prepayments if the tax rate for your wage income or the tax prepayments for business income have been set too low. However, one should primarily always ensure that the withholding amount has been set correctly.

How are supplementary prepayments paid?

When you pay a supplementary prepayment, use the correct bank form and follow the payment instructions.

Always fill out the message field. Filling in the correct information in the message field is particularly important, because the Tax Administration uses this information to allocate the payment to the right payer. In the message field, provide the tax ID, the personal ID number of the taxpayer and the tax year for which the supplementary prepayment is intended. Do not store any information in the reference number field. If you do not indicate a tax year, the Tax Administration will assume that the supplementary payment is intended for the first possible tax year. For instance, a supplementary prepayment made on 28 August 2018 will be considered to be for the 2017 tax year.

If you wish, you can make several supplementary prepayments for the same tax year. If you make supplementary prepayments between 1 February-1 October 2018, the Tax Administration will send you a new tax assessment and bank forms by the end of October. These will account for your supplementary prepayments.

Note that foreign decedents' estates may not pay supplementary prepayments as an individual taxpayer. Instead, they must apply for an additional prepayment for corporations and joint administrations. Apply for additional prepayment via MyTax. If a foreign decedent's estate does not have a Katso ID, which is required to log in, it can apply for additional prepayments using the tax prepayment form for corporations (form 5017).

Additional information on applying for and paying supplementary prepayments: Tax prepayments for corporations.

Interest on back taxes for the 2017 tax year

You can avoid paying interest on back taxes for the 2017 tax year if you pay a sufficient supplementary prepayment by no later than 31 January 2018.

Interest on back taxes for 2017 is calculated as from 1 February 2018 until the first due date for back taxes, 3 December 2018. The interest on back taxes of less than EUR 10,000 is 0.5%. For the part exceeding EUR 10,000, the interest in 2018 is 2.0% (the rate is the reference interest rate confirmed by the Bank of Finland plus two percentage points). The interest rate is checked annually. EUR 20 is always deducted from the calculated interest on back taxes. In practice, you will have to pay interest on back taxes for the 2017 tax year if your back taxes exceed about EUR 4,788.

How to calculate the amount of the required supplementary prepayment?

Use the tax percentage calculator on Vero.fi to calculate a sufficient supplementary prepayment. Please note that the result provided by the calculator is only indicative.

You can calculate the required supplementary prepayment using the tax percentage calculator  (www.tax.fi/taxcalculator)

Key terms:

AnswerBank

Go to AnswerBank