Last week, the ETCB began sending orders for payment of tax arrears to people and businesses that had not paid their tax liabilities or applied for payment in instalments by 16 June or immediately thereafter. Orders can be viewed in the e-services environment e-MTA.
If the tax liability is not paid or deferred within the term specified in the order, then, by law, the ETCB must begin with recovery. “We generally give 10 days for this, after which we begin compulsory enforcement,” said Kadri Kööp, Head of the Arrears Management unit of the ETCB’s Revenue Department.
The usual first step in compulsory enforcement is the seizure of bank accounts. In addition, the ETCB has the right to set restraining notes on disposing of assets of persons upon recovery of arrears, in the case of which the debtor is prohibited from entering into transactions with his or her assets without the consent of the ETCB. The ETCB also has the right to block securities or securities accounts and give orders for seizure of monetary claims to, for example, the debtor's employer, transaction partner, notary, enforcement agent, lessor or another third party.
If recovery of the arrears fails as a result of these actions, the ETCB may, in order to continue enforcement proceedings, turn to an enforcement agent, who will then start seizing and selling the debtor's assets. If enforcement proceedings are continued by an enforcement agent, this may also result in additional costs for the debtor due to enforcement costs. “However, we do not want to go that far in collecting any tax arrears. We would like to advise taxpayers and try to find solutions together on how to fulfil tax obligations and, if necessary, defer them. Therefore, we ask taxpayers to make sure that tax liabilities are paid or deferred soon," said Kadri Kööp.
When deferring a tax liability, it can be paid in instalments. The fastest way to apply for deferral of tax liabilities is to submit an application together with a payment schedule plan in the ETCB’s e-services environment e-MTA. An application for payment in instalments can be submitted for a period of 2 to 24 months.
The ETCB points out that interest is calculated on unpaid tax liabilities at a rate of 0.06% per day, i.e. 21.9% per year. At the same time, in the case of paying tax arrears in instalments, it is possible to apply for reduction of the interest rate by up to 50% as of confirmation of the decision of payment of tax arrears in instalments. Such a request must be indicated in the application for payment in instalments.
More information on payment of tax arrears in instalments for private clients and business clients on the website of the ETCB. You can also find instructions and answers to frequently asked questions on applying for payment of tax arrears in instalments by signing in to e-MTA and selecting “Payment of tax liabilities in instalments” in the Help Center section.
