Finnish Tax Administration’s Support for Companies during the Pandemic
The Finnish Tax Administration has published numerous support measures over the past few weeks to ease the exceptional circumstances created by the coronavirus pandemic.
The goal of the Tax Administration and the Ministry of Finance is to support companies through measures to ease cashflow problems and reporting. The measures published so far seem quite moderate from the perspective of improving the finances and liquidity of companies.
EASED TAX PAYMENT ARRANGEMENT
Companies that encounter solvency problems can request a payment arrangement for income and value added taxes. Due to the exceptional circumstances caused by the coronavirus, the Tax Administration will ease the terms of payment arrangements. In addition, on 2 April the Government submitted a bill to Parliament (HE 33/2020 vp) to temporarily lower late-payment interest rates for taxes in a payment arrangement.
A payment arrangement with eased terms has been available in MyTax since 25 March 2020. As of the same date, taxes that are included in a payment arrangement request will not be recovered by enforcement authorities and the company’s tax debt will not be published in the tax debt register or the protest list.
The due dates for payment arrangements will be postponed and late-payment interest will be lowered. The first instalment of the payment arrangement will fall due in three months after the arrangement is approved, as opposed to one month. The Tax Administration will automatically include any new tax debts in the arrangement that form after the payment arrangement has been taken into use until 31 May 2020.
According to the government bill, the rate of late-payment interest on taxes included in a payment arrangement would be lowered from 7% to 4%. The lowered interest rate would only apply to taxes that are included in a payment arrangement and that fall due after 1 March 2020.
Qualifying for a payment arrangement requires that you have no taxes in recovery by enforcement and that you have filed all the required tax returns and reports to the Incomes Register (earnings payment reports and employer’s separate reports).
The coronavirus pandemic and payment difficulties arising from it are not, as a rule, grounds for release from late-payment interest. However, you can apply for a waiver of late-payment interest in MyTax for a special reason. Such a reason could be if you paid taxes late due to a sudden illness or quarantine, and were unable to make the tax payment on time.
INCOME TAX SUPPORT
With respect to income tax, the Tax Administration has announced the following support measures:
- Reduction of tax prepayments by a notice of the taxpayer without the need for interim financial statements or other written reports
- Additional time to file tax returns for a justified reason (such as illness)
- No penalty for filing your tax return late if you have a justified reason
You have to request the above measures separately and provide grounds for the reduction, additional time or waiver of the late-filing penalty.
NO LATE-FILING PENALTIES FOR VAT RETURNS AND EXPEDITED PROCESSING OF VAT REFUNDS
No extensions to the deadlines for filing VAT returns or other tax returns for self-assessed taxes are available. However, you can request a waiver of the late-filing penalty. If you have a justified reason for filing late, such as illness, you may not have to pay a late-filing penalty.
The Tax Administration has also announced that it is expediting the processing of VAT Refunds.
POSTPONEMENT OF EXCISE DUTIES AND CAR TAX PAYMENTS
Payment arrangements are not available for car taxes and excise duties, but you can request a postponement of payments.
The coronavirus outbreak is a rapidly developing situation. This information was first published on 26 March 2020 and was updated on 9 April 2020.