Legal Alerts/25 Mar 2020
Tax Reliefs in Finland due to COVID-19
Due to the difficulties caused by coronavirus pandemic to entrepreneurs and companies, the Finnish tax authorities (FTA) have granted certain reliefs concerning filing or paying of taxes. However, the due dates for filing and paying taxes have not changed despite the coronavirus situation, but there are several means by which a taxpayer may ease their situation:
1. Possibility to request more time to file in income tax returns and removal of late-filing penalty
- Taxpayers are provided with a possibility to request more time for filing the income tax returns, if necessary. The additional time may be given if the taxpayer have a justified reason, e.g. illness, which have prevented the taxpayer from filing the tax return in time.
- Moreover, if the taxpayer files the tax return late due to a justified reason (e.g. illness), the taxpayer may request that the late-filing penalty will be removed.
2. Possibility to request for a removal of late-filing penalty relating to VAT returns
- At this time, the FTA does not grant more time for filing VAT returns or other tax returns for self-assessed taxes.
- However, there is a possibility to request late-filing penalty to be removed also in the event that a VAT return or other self-assessed tax return is filed late.
3. Payment arrangement with eased terms and removal of late-payment interest
- The companies having temporary financial difficulties may request for a payment arrangement with eased terms. The eased terms will apply to payment arrangements that have been requested between 25 March and 31 August.
- Under the new terms, the first instalment of the payment arrangement will fall due in three months after the arrangement has become active (instead of one month).
- In accordance with the legislative amendment being under preparation, the rate of late-payment interest on taxes included in a payment arrangement will 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.
- If the company already has a payment arrangement and has financial difficulties caused by the coronavirus, there is a possibility to request a new payment arrangement with eased terms.
- In addition, companies having temporary financial difficulties may request for a removal of late-payment interest incurred due to illness or other special reason.
- It should be noted that FTA’s processing times may be longer than usual, as there is likely to be a large number of requests.
4. Possibility to make amendments to the tax prepayment amounts
- If the actual income or expenses differ from the company’s previous estimate, it is possible to request a change to the tax prepayments.
- The changes may be made in FTA’s online service MyTax.
In addition to the above, further reliefs may be expected depending on the extent of the effects to the companies caused by the coronavirus situation. Borenius’ lawyers are available to assist in addressing any questions you may have regarding the reliefs available in Finland due to the coronavirus situation.