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Payment of tax liabilities in instalments

How to apply for the payment of tax arrears and future tax obligations in instalments?

The easiest way to apply for payment by instalments is through e-maksuamet/e-toll (hereafter the e-services). You can use this option if you have a user account in the e-services, you have tax debts or obligations that need to be paid in the near future and you have not already sent an application for instalments.

To send the application you need to log in to the e-services and either choose the direct link on the first page “Soovin maksegraafikut / I want a payment plan” or go to section “Nõuded ja kohustused / Claims and liabilities” and choose “Application for instalments”.

If for some reason you cannot submit your application through the e-services, then it is still possible to send the application on a specific form by e-mail (with a digital signature) to ajatamine@emta.ee or by post to Lõõtsa 8a, 15176 Tallinn or leave it at any of our service bureaus.

You can apply for a payment by instalments for a period of 2 to 24 months. The minimum amount of debt that can be paid in instalments is 50 euros.

How fast and how will I receive the decision about the instalments?

Your request for payment of tax liabilities in instalments will be dealt with under the simplified procedure and the decision with a relevant interest claim will be automatically generated in the data processing system if the following conditions are met:

  • the total amount of tax liabilities is up to 20 000 euros:
  • the period of instalment schedule is up to 12 months;
  • all the obligatory tax returns are submitted;
  • there are no valid instalment schedules or court approved compromise schedules;
  • you have neither unpaid fines nor penalty payments imposed by the Estonian Tax and Customs Board and there are no overdue public claims (fine, penalty payment, pecuniary punishment, procedure expenses) arisen as the result of judicial proceedings;
  • no bankruptcy, liquidation or restructuring proceedings have been initiated against the applicant;
  • there is no solidary obligation (i.e. tax arrears to be jointly paid by several persons);
  • there are no disputes on any tax liabilities;
  • tax arrears have not been handed over to the bailiff for compulsory execution;
  • there are no instalment schedules which have been declared invalid within the last six months.

Automatic decision will be generated on the basis of the data submitted by you in the request. Automatic claim for interest will include the amount of interest that has been calculated on your tax obligations as of the day of the decision. Payment of the interest is included in the confirmed schedule of payments, no separate unscheduled payments are required. Both automatically generated documents will be verified with a digistamp (a digital stamp or digistamp is a service that enables legal persons to digitally sign documents. Thereby a confirmation is added to a document proving that the document originates from the legal entity where it was signed (i.e. the digital document is confirmed by a legal entity, not by an authorised natural person) and the document has not been changed between issuing and receipt).

If the submitted request does not meet the requirements of the simplified procedure, then your request will be looked over by an official pursuant to the normal procedure provided for in the Taxation Act (hereafter the TA). In this case we make a decision to satisfy or to refuse to satisfy a request for payment of tax liabilities in instalments within 20 days as of receipt of the request.

Upon deciding to satisfy a request we take into consideration:

  • Prior performance of tax-related obligations
  • Financial situation
  • Economic indicators
  • Proposed schedule for payment of debts and future obligations
  • If security is required, then the reliability of the security provided

Sometimes we might ask for a security to ensure the payment of tax liabilities. In such cases we prefer a registered security over movables established in favor of the state or a mortgage (the expert’s opinion not older than 3 months must be added in order to establish the value of the security provided).

Procedural documents relating to the request for payment of tax liabilities in instalments are deemed to be delivered to the client as of the time of making them available in the e-services. The client receives a notification of the delivery of documents by email or text message. If only a postal address is known to the tax authority, the documents will be sent by post and the delivery of documents is conducted pursuant to the procedure provided for in Chapter 4 of the TA.

Can the tax authority deny a request for payment in instalments?

We have the right to deny a request for payment of the tax liabilities in instalments if:

  • the request is not reasoned or is insufficiently reasoned;
  • you have been issued an order to pay the tax arrears within 48 hours as of the date of receipt of the order;
  • you do not keep accounts pursuant to the procedure provided by legislation, do not submit tax returns or do not preserve documents;
  • you fail to provide the required security for the set term or we don’t consider that the security provided is sufficient or trustworthy;
  • other circumstances or grounds exist, which causes us not to consider the payment of tax arrears in instalments to be expedient (for instance according to the data collected from the submitted tax returns or from other sources you actually are capable of meeting your obligations).

Calculating interest on the tax arrears being paid in instalments

Interest in the amount of 0,06% per day or 21,9% per year will be added to the principal amount of debt up to the date of its final payment, which is by far more expensive than payment of interest on a bank loan. No additional interest is calculated from the interest amount. When applying for payment in instalments you can ask for interest reduction up to 50%. This reduction would apply to the interest that is calculated starting from the day of the decision, it doesn’t affect the interest that has already been calculated.

In the case of simplified procedure a 50% discount applies automatically on the interest calculated on the amount of claims included in the payment schedule as of the confirmation time of the schedule.

What will happen if I fail to meet the payment schedule or do not pay the taxes that become due?

If a taxable person fails to meet the schedule for payment of the tax arrears, does not pay the taxes that become due on time, does not file tax returns on time or in the event of a decrease in the value of security, does not submit replacement security accepted by the tax authority, the tax authority has the right to revoke the decision on the payment of tax liabilities in instalments and revoke the reduction of interest rate.

After revocation of the decision on the payment of tax liabilities in instalments the tax authority has the right to initiate a compulsory execution of the claims arising from tax arrears pursuant to the procedure provided for in Chapter 13 of TA.

What else should I keep in mind?

  • Tax arrears in instalments can be paid prematurely by using the specific reference number provided in the decision.
  • It is not possible to apply the so-called “payment holiday”.
  • A sole proprietor cannot deduct the interest calculated from the tax arrears from business income, because it is not a business expense.

Additional information

16.01.2017