Finnish Tax Authorities’ actions to support companies during the COVID-19 epidemic

16 March 2020
Last updated: 10 June 2020

The Finnish Tax Authorities have published actions to support companies with challenges they might face during the COVID-19 epidemic as follows:

Filing deadline for corporate income tax returns is extended by one month.
Extension can be applied for filing of the corporate income tax return.
Penalty related to late filing of the corporate income tax return may not be collected.
Possible late payment interest may not be collected.
The Finnish Tax Authorities enhance the handling of refunds related to value added taxes (VAT).
Penalty related to late filing of the VAT return may not be collected.
There is a possibility to apply for a payment arrangement with relieved terms.
The interest rate on taxes included in a payment arrangement is temporarily lowered.
VAT payments paid in the beginning of 2020 can be lent back to companies.
Extended payment time can be requested for car tax and excise duties.

The Finnish Tax Authorities are reminding companies to amend the assessed advance taxes where needed.

The authorities are also enhancing the handling of the above listed matters. However, please note that due to the situation, there will probably be a large amount of requests to the Finnish Tax Authorities which may result in longer processing times. Therefore we recommend contacting the Tax Authorities as soon as possible.

Filing deadline for corporate income tax returns extended by one month

The filing deadline for corporate income tax returns has been extended by one month from four months to five months. This applies for limited liability companies, branches and PEs where the accounting period ends between December 2019 and February 2020. For entities where the accounting period ended on 31 December 2019, the extended due date was on 1 June 2020 as 31 May 2020 fell on a Sunday.

There is no need to file an extension application to request the extra month and there will be no late filing penalties for tax returns filed during the extended one month period.

In spite of the automatic extension, the Finnish Tax Authorities encourage entities to file their corporate income tax returns as soon as possible and preferably within the normal four month deadline, if possible.

Applying for extension for filing of tax returns and collection of late filing penalties

Companies can apply for extension for corporate income tax return filing based on specific reasons of which one is a situation where a key person has fallen ill and the company cannot file the tax return by the automatically extended statutory due date. Extension can be applied for either electronically in MyTax or on a paper form. Please note that the extension needs to be applied no later than on the statutory due date.

There is no possibility to apply for extension for filing of the VAT return, however in case a VAT or corporate income tax return is filed late, companies can request that the Finnish Tax Authorities do not collect the late filing penalty.

Payment arrangement with relieved terms

As of 25 March 2020, companies can apply for a payment arrangement with relieved terms in case the company faces difficulties with making tax payments on time because of the coronavirus epidemic.

The relieved terms include:

Unpaid taxes will not enter enforcement proceedings
Tax debts will not be published in the tax debt register or on the protest list

The payment arrangement with relieved terms can only be applied for between 25 March 2020 and 31 August 2020 by telephone or in MyTax. If the company applies for a payment arrangement before the 25 March 2020, it will be subject to regular terms.

Once the company enters a payment arrangement with relieved terms, the first payment due date is three months after the payment arrangement has been approved instead of the regular one month. In addition, new tax debt formed during the payment arrangement until 31 May 2020 will be automatically included in the payment arrangement.

Please note that a company is only eligible for a payment arrangement if:

the company does not have taxes in recovery by enforcement
the company has filed all required tax returns and Incomes Tax Register reports.

Interest on tax payments

The interest rate on taxes included in a payment arrangement is temporarily lowered from 7% to 4%. The lowered interest rate will only apply to taxes that are included in a payment arrangement and are due after 1 March 2020 and before 31 August 2020. The lowered interest rate also applies to taxes and payments deferred based on legislation given on excise duties, car taxation, vehicle taxation and excise duties on liquid fuels.

In certain circumstances, for example where a key person has fallen ill, the company can request the Finnish Tax Authorities not to collect late payment interest on tax payments.

VAT payments reimbursed as a loan

Companies can request the VAT they have paid in January 2020 - March 2020 to be reimbursed to them as a loan by submitting a request for a payment arrangement. As part of the payment arrangement, the company must agree to repay the VAT at a later date and a 3% interest rate applies to the arrangement.

This payment arrangement can be applied for starting from 26 May 2020. All payment arrangements granted after 25 March 2020 are subject to the relieved terms presented above.

Car tax and excise duties

A payment arrangement cannot be applied for car tax or excise duties, but companies can apply for an extended time for payment for these taxes on the phone or by sending an open letter to the Finnish Tax Authorities. Please note that the extended time for payment cannot be applied for in MyTax.

Questions or in need of assistance? Our tax professionals are happy to help you with communicating with the Finnish Tax Authorities and with preparation and filing of applications. Feel free to contact us!