Prepayments - individual taxpayer
You must usually make prepayments of income tax if you receive rental income or profits for selling an asset or property. Prepayments are also required if you are self-employed, i.e. you operate a business, a trade, an agricultural farm, etc.
Request or change a prepayment (tax.fi/taxcard)
Use your e-bank security codes to log in.
Use our e-services to request prepayments or to change them
Request a calculation of prepayments or for an increase or decrease of the amount you must pay during the tax year. Do this by mid-November. If it turns out that you pay too much in prepayments this year, you can no longer correct the situation next year.
You need to give an estimate of your income and deductions for the entire year in order to request new prepayments or changes to prepayments. You also need to state how much income you have received this year since January and how much tax has been withheld on it.
You can use one of the following methods to submit your application:
- log in to Tax Card Online (tax.fi/taxcard) with your personal e-bank security codes call the service number +35829 497 000
- complete and print a paper application form and send it to the Tax Administration by post
- visit a tax office
Pay the taxes on rental income as prepayments, or raise the percentage rate on your tax card
Make tax prepayments on rental income
You are required to inform the Tax Administration that you are receiving rental income. Deduct the expenses that are directly linked to your activity of offering an apartment for rent – report just the net rental income to the Tax Administration. An easy way to take care of this is to fill in an application for a new tax card. If you are requesting changes to your tax card and/or prepayments online, by post or by telephone, the tax office will send you a new set of bank forms by letter.
Ask your withholding rate to be increased – no prepayments are needed
If you start receiving rental income, you can raise the withholding rate on your wages or pension to also cover the tax on the rent. Doing this makes prepayments unnecessary. You can estimate your new, higher withholding rate yourself and then give it directly to your employer, pension provider or other payor.
However, before you ask them to increase the withholding you must make sure that the Tax Administration has not made a prepayment decision for you already. If this is the case, you must ask the Tax Administration to remove your prepayments. If you stop making prepayments without notifying the Tax Administration, you will be sent a reminder. After this, any outstanding tax debt will be collected through enforcement.
Start the Calculator to estimate your need for increased withholding (tax.fi/taxcalculator).
Example: Your annual gross income has consisted of €15,000 in pension and now you also receive €3,000 a year from a tenant who pays you rent.
Alternative 1: You opt for making prepayments. In this case, the withholding rate on your pension income is 12%.
Alternative 2: You opt for having your withholding rate increased so you do not need to make prepayments. In this case, the withholding rate on your pension income is 18%. Because your withholding is higher, your tax liability for the rental income is covered.
The municipality of domicile in this example is Hattula.
Check the amounts of rental income printed on your tax card
When you receive your tax card in a letter at the start of the new year, we recommend that you check the rental income values that are printed on it. If the rental income is not right and must be changed, or if you want to opt for increased withholding instead of prepayments, please contact the Tax Administration or log in to Tax Card Online to send us the information for changed prepayments.
In the course of the year, prepayments may be decreased or increased; you can ask for these changes to be made so that they reflect the changes in your rental income. It is not a good idea to leave a prepayment unpaid. The Tax Administration transfers unpaid prepayments to the enforcement authority for recovery.
Do not forget that if you pay the tax on the rent you receive later, when the Tax Administration's regular assessment for the year is in process, you may have to pay interest for late payment.
Prepayments are collected on capital gains income
If previously have owned a house, apartment or a summer cottage that you had bought as an investment instead of for living in it permanently and you sell it, you may receive a profit, i.e. capital gains, which is subject to tax. Normally, the Tax Administration contacts sellers when the tax year is still ongoing in order to ascertain the amount of the profit.
When we have the information we need, we calculate the prepayments you must pay. You'll receive a set of bank forms for paying them. When you pay your tax on capital gains as a prepayment, you'll avoid having to pay back tax and interest.
Another option is that you pay the tax on your own initiative as supplementary prepayments (if the tax office has not instructed you to make a prepayment as described above).
The size of your prepayment instalments depend on your actual tax liability
Individual taxpayers make prepayments in two or more instalments of equal size. How much you must pay per instalment depends on how much income tax in total you are liable to pay in advance. The due date is the 23rd of each month.
Not only your rental income but also your other income during the tax year has an impact on how much you must pay: Wages, benefits and other income you receive during the tax year also affect your prepayments. In addition, you may have tax-deductible expenses, such as home loan interest payments. They, too, will affect your prepayments, so you should include them in your request for a prepayment calculation.
From prepayments to the final assessment of income tax
If it turns out that you have not paid enough in prepayments during the year, you must make up for the difference afterwards as back taxes. The back tax may accrue interest. On the other hand, if it turns out that your prepayments have been too high, you will get a refund. There may be significant differences between your estimated and final income/expense details if you have not checked them or updated them during the year when you make the prepayments.
You should ask for an increase of the prepayment well in advance. You can still follow the old procedure and make supplementary prepayments until 31 October 2018.
Start the Calculator to estimate the supplementary prepayment you should pay (tax.fi/taxcalculator).
Note: Read the instructions first: on the Calculator's menu, select How to pay the tax. Remember that when you use the Calculator, you should treat the resulting figures as a rough guide only, something to help you get started with your planning.
Recovery of unpaid prepayments through enforcement authorities
If you don't pay a prepayment by its due date, we send you a reminder letter. If you receive one, you must pay up the amount by the date indicated. It is the Tax Administration's practice to transfer all imposed but unpaid prepayments to enforcement agencies for collection.
If you lost or misplaced the bank forms, ask for a new set. They will be sent to you within a week.
Alternatively, call +358 29 497 000.