Additional income tax due

Due date for payment of an additional income tax for 2012 is 1 July 2013. Due date for an additional income tax due for the persons who were engaged in business or had gains from sale of property in 2012 is 1 October 2013. Sole proprietors are also required to pay assessed additional social tax by 1 October 2013.

The Estonian Tax and Customs Board shall issue a corresponding notice of assessment to each person who must pay an additional amount of income tax and the notice of assessment shall be available through the e-Tax Board/e-Customs. The persons, who prefer to have the notice of assessment on paper, will receive it by registered mail.

It is up to the taxpayers to decide which bank they prefer for payment of the additional tax due.

Account numbers for state taxes and payments*

* Please indicate the Estonian Tax and Customs Board (Maksu- ja Tolliamet) as the recipient of the payment.

In case of an intra-bank transfer in the following banks: SEB Pank, Swedbank, Nordea Pank or Danske Pank information on transfer of the payment is communicated from the bank to the Tax and Customs Board within 20 minutes.

Every taxable person has a personal reference number for all kind of taxes, charges, levies, payments and other financial obligations (interest, penalty payments, fines, etc.) arising from an Act concerning a tax; the reference number is to be found under: „Personaalse viitenumbri otsing" („Search for personal reference number").

You can also find your personal reference number under the heading „Nõuded ja kohustused” („Claims and liabilities") in the e-Tax Board/e-Customs. Please insert the reference number in the appropriate field of the payment order.

If, in case of temporary insolvency problems, it may happen that a taxable person is not able to make the payment of tax arrears right away, the tax authority may recommend applying for payment of tax arrears in instalments. Payment of tax arrears (incl. interest arrears) in instalments means monthly payments on the basis an approved payment schedule.

A taxable person shall submit an application for payment of tax arrears in instalments either in free wording or on the form available on the webpage of the Tax and Customs Board.

An application shall be submitted to the nearest service bureau of the Estonian Tax and Customs Board.

An application bearing digital signature together with supporting materials may be submitted electronically and sent to an e-mail address: pohjaemta.ee.

As a rule, a natural person may use a simplified procedure for payment in instalments, if he or she meets the following requirements:

1. the person has submitted tax returns;
2. the person has legal income;
3. the total amount of tax arrears does not exceed 3200 euros;
4. recommended period for payment in instalments may be up to 6 months.

An application must include:

• Reasons for creation of the tax arrears and why the person applies for payment in instalments.
• Explanations on the person's ability to pay tax arrears in instalments and other current liabilities (e.g. bank loan or lease payments) in the period of payment of tax arrears in instalments.
• Length of an instalment period, the amounts of monthly payments and the payment date.

Upon submission of an application a person must follow the principle that while taking into account the current economic situation, a payment schedule should be requested for a possibly short period, because until settlement of the principal debt, a daily interest of 0.06% or an annual interest of 21.9% will be added, which may be much more expensive than payment of a bank loan interest. The tax authority may reduce an interest rate for up to 50% on the payment of tax arrears payable in instalments, but this is applicable to future payments only. And the taxpayer must express his or her wish for it.

A sole proprietor may not deduct from his or her business income the interests calculated on the basis of tax arrears, because such interests are not business expenses. At the same time sole proprietors are not required to pay income tax on these amounts.

Upon payment in instalments it must be taken into account that:

• In the period of payment in instalments, until settlement of the principal debt the additionally calculated amounts of interest are also added to the payments due according to the payment schedule;
• Payment of tax arrears in instalments does not exempt a taxpayer from his or her current tax liabilities;
• If a person wishes to make a payment before the prescribed date, the person must insert in the payment order the reference number indicated in the decision on payment in instalments. In other cases a personal reference number of the prepayment account is used upon making the payments.
• Financial obligations of a taxable person will be paid or settled in the order of creation of payment obligations;
• Proceed from the Taxation Act, so-called 'tax leave' it is not possible.