Payment, arrears

State taxes, payments and other financial obligations arising from law (interest, penalty payments, fines, etc.) and pecuniary punishments, fines, and case costs imposed by a court or prosecutor’s office, must be paid into the account of the Estonian Tax and Customs Board.

The easiest, quickest and cheapest way is to pay the tax arrears that have arisen immediately by transferring the amount of tax arrears into the bank account of the Estonian Tax and Customs Board.

When making a bank transfer, please indicate on the payment order your reference number, which can be found using the search of personal reference number.

In a case where you have a claim for income tax refund, the Estonian Tax and Customs Board has the right to check the claim before satisfying it. If you have a claim for refund of a natural person’s income tax and tax arrears at the same time, we will collect the whole amount of the arrears, regardless of the amount being checked in relation to the claim for refund.

Notification of tax arrears

Taxpayer does not have previously unpaid tax arrears when the debt incurs

1. Notification

First, we will send the taxpayer a notice of tax arrears (usually an e-mail or text message). We will send the notification when we have correct contact details of the taxpayer. 

2. Order

If the taxable person does not respond to the reminder, we will prepare an administrative act, an order for payment of tax arrears, for the taxable person. We will send the order to the e-services environment e-MTA and inform the taxpayer by e-mail or text message.

More information from the article „Delivery of documents“ (in Estonian).

Taxpayer has previously unpaid tax arrears when the debt incurs

1. Order

We will prepare an administrative act, an order for payment of tax arrears, for the taxable person. We will send the order to the e-services environment e-MTA and inform the taxpayer by e-mail or text message.

More information from the article „Delivery of documents“ (in Estonian).

The content of the order
  • The order specifies the types of claims and the amount of the tax debt.
  • The order also contains a compulsory execution notice, which means that if the taxable person fails to pay or apply for payment in instalments of the tax arrears within the specified term, the Tax and Customs Board has the right to commence collection of tax arrears. The order does not contain claims already contained in previous administrative acts.
  • Generally, the order gives 10 days to pay the arrears. This means that if the taxable person does not pay or defer the arrears during this period, the Tax and Customs Board will commence compulsory enforcement 10 days after the delivery of the document. The term given in the new order does not cancel the term given in the previous order.
  • In exceptional cases, the Tax and Customs Board may issue an order ordering payment of the arrears within 48 hours. In such a case, compulsory enforcement is also commenced at the end of 48 hours if the debt is still outstanding or not deferred.

If tax arrears are neither paid on time nor scheduled for payment in instalments, the Estonian Tax and Customs Board will initiate compulsory execution of tax arrears.

Activities of Tax and Customs Board upon collection of tax arrears

If the taxable person has not paid the debt on the basis of the order issued, the Tax and Customs Board will send all Estonian credit institutions providing settlement account services orders to seize the taxable person's bank account.

In order to avoid overpayment of money as a result of seizure of bank accounts, in addition to the seizure order, a money transfer order (payment instruction) will be sent to one bank (which is known to be the main bank of the taxable person).

Banks have specific times when transfers from accounts seized by payment instructions take place. In other banks, the taxable person's accounts are seized, but the amount is in "reserved" status. Banks that have reserved the money in accounts and that have not received payment instructions do not transfer the money to the Tax and Customs Board on their own initiative.

Banks execute orders for seizure in the order in which they are received.

Identification of the debt claim that is the basis for the seizure

In the e-services environment e-MTA, the taxable person can see which debt claim his or her bank account(s) have been seized for. To do this, you need to sign in to the e-services environment and select AccountingDebt claims from the menu. There you can find information on the seizure.

Debt claims in e-MTA

According to this example, the taxable person has one debt claim (warning of compulsory execution) for the execution of which bank account(s) have been seized.

By clicking on the number in the "Document No" column, you can check the debt claim.
In the column "Payment instruction", you can see the name of the bank that has been instructed to transfer the money in the bank account to cover the debt claim to the bank account of the Tax and Customs Board. According to the example, the order for money transfer has been sent to LHV Pank.

Using a seized account

With questions about the use of a seized account, contact the bank where the account has been seized.

There is money on the seized account

Example 1

The money is on the seized account for which a payment instruction was sent to the bank. The money is transferred to the account of the Tax and Customs Board at the time determined by the bank. If the taxable person wishes to use his or her account earlier, we recommend contacting the bank and asking to transfer the money and then release the account.

Example 2

The money is on the seized account for which a payment instruction was not sent to the bank and the amount is reserved. The taxpayer can contact the bank to pay the debt, as payment to the Tax and Customs Board is allowed from the seized account. You can also contact the Tax and Customs Board to amend the order sent to the bank.

Seizure after revoking the decision on payment of tax liabilities in instalments

If the decision on payment of tax liabilities in instalments has been revoked or the payment schedule has been terminated by failure to pay, the claims covered by an administrative act prepared for the person before the approval of the schedule and outstanding claims will be seized without warning the person again of coercive acts.

Seizure, although according to the order there are still 10 days remaining

If a taxable person has received an order for payment of the debt within 10 days and 10 days have not yet passed but his or her bank account has been seized, the reason may be that the person has already received orders for payment of previous outstanding claims the term for payment of which has expired.

Taxable persons can see all orders issued to them in the e-services environment e-MTA by selecting Communication - Documents after signing in.

Release of a seized account

If a bank account has been seized, it will not be released for the reason that additional time is requested to pay the debt. The account is released when the debt is paid, deferred, or otherwise terminated.

Example 1

A schedule has been drawn up to pay off the debt. Bank accounts are released from seizure within three working days, usually on the next working day.

Example 2

The debt has been paid. Bank accounts are released from seizure within three working days, usually on the next working day.
If the debt was paid from a seized bank account, the bank will release the account from seizure immediately after the transfer of the money to the bank account of the Tax and Customs Board.

The Tax and Customs Board has the right to apply for a prohibition which makes visible the restraint on disposition to be entered in the land register or another property register (e.g., motor register) without the consent of the person concerned.

The prohibition does not mean that the owner of the property cannot use it. The content of the prohibition notation entered in the register is that the debtor is prohibited from making transactions with the property without the consent of the Tax and Customs Board. With the consent of the Tax and Customs Board, the debtor may sell the property. The assumption is that money will be received from the transaction to cover the debt claim.

In general, the Tax and Customs Board does not give consent to the transfer of property below its market value, unless the property is sold at a price fixed in the valuation act.

If a bailiff continues tax collection, the taxable person must agree the transactions related to the sale of the property with the bailiff.r

The Tax and Customs Board has the right to order the registrar of the securities register to freeze the securities or securities account of the taxable person. Freezing securities or securities accounts means that an entry is entered in the register that temporarily restricts the disposal of securities or a securities account.

In order to collect tax arrears, the Tax and Customs Board can make orders which seize existing and future financial claims of a taxable person against a third party. The order obliges a third party to transfer financial obligations to cover the debtor's tax arrears to the Tax and Customs Board. For example, an order can be issued to seize the taxpayer's financial claim to the employer, lessee, commercial lessee, transaction partner, bailiff selling property, trustee in bankruptcy, etc.

The order does not require a third party to pay the tax arrears of the taxable person, but the third party must transfer money to the Tax and Customs Board for covering the debt only if the third party has financial obligations to the taxable person. The order will also be sent to the taxable person for information.

If the third party has no financial obligations to a taxable person, it is sufficient for the third party to inform the person who prepared the order thereof. At the same time, it must be taken into account that the order also applies to future claims until the Tax and Customs Board has ordered the release of the financial claim from seizure.

1. Seizure of a financial claim to an employer

Example 1

The Tax and Customs Board prepared an order for XX OÜ to withhold payments to Mari until the claim of 3200 euros is satisfied or the employment relationship is terminated. The order obliged not to withhold the amount of the minimum monthly wage in one month.

Mari's monthly net wage is 1100 euros.
The amount of the minimum monthly wage is 725 euros in 2023.
XX OÜ deducts 375 euros (1100 - 725) from the first payment following the order and transfers it to the Tax and Customs Board’s bank account using the reference number specified in the order.
XX OÜ transfers 725 euros to Mari's bank account.

In the following months, XX OÜ must make deductions until it has transferred the seized 3200 euros to the Tax and Customs Board. In this example, XX OÜ must make deductions in nine consecutive months.
XX OÜ does not have to inform the Tax and Customs Board about the execution of the order.

Example 2

The Tax and Customs Board prepared an order for XX OÜ to withhold payments to Mari until the claim of 600 euros is satisfied or the employment relationship is terminated. The order obliged not to withhold the amount of the minimum monthly wage in one month.

Mari's monthly net wage is 1400 euros.
The amount of the minimum monthly wage is 725 euros in 2023.
A maximum of 675 euros (1400 - 725) of Mari's wage for one month can be seized. However, since the financial claim in the amount of 600 euros was seized with the order, XX OÜ transfers 600 euros to the Tax and Customs Board’s bank account when making the first payment following the order using the reference number specified in the order.
XX OÜ transfers the remaining 800 euros (1400 - 600) to Mari's bank account. Therefore, the order is fulfilled after the first payment.
XX OÜ does not have to inform the Tax and Customs Board about the execution of the order.

Example 3

The Tax and Customs Board prepared an order for XX OÜ to withhold payments to Mari until the claim of 600 euros is satisfied or the employment relationship is terminated. Since Mari has one dependant, the employer was obliged not to withhold the amount of two minimum monthly wages in one month.

Mari's monthly net wage is 1500 euros.
The amount of the minimum monthly wage is 725 euros in 2023. The amount of two minimum monthly wages is 1450 euros
XX OÜ deducts 50 euros (1500 - 1450= 1450) from the first payment following the order and transfers it to the Tax and Customs Board’s bank account using the reference number specified in the order.
XX OÜ transfers 1450 euros to Mari's bank account. In the following months, XX OÜ must make deductions until it has transferred the seized 600 euros to the Tax and Customs Board. In this example, XX OÜ must make deductions in twelve consecutive months.
XX OÜ does not have to inform the Tax and Customs Board about the execution of the order.

Example 4

The Tax and Customs Board prepared an order for XX OÜ to withhold payments to Mari until the claim of 600 euros is satisfied or the employment relationship is terminated. The order obliged not to withhold the amount of the minimum monthly wage in one month. Before the Tax and Customs Board's order, a bailiff had issued an act of seizure of wages to XX OÜ.

Since the act of seizure of wages made by the bailiff arrived before the order of the Tax and Customs Board, XX OÜ will first make the withholdings until payment of the amount specified in the act of seizure of the wages of the bailiff and thereafter proceed to execute the order of the Tax and Customs Board.

2. Seizure of a financial claim to a transaction partner

Example 1

YY AS has a tax debt of 4500 euros.
The Tax and Customs Board issued an order to XX OÜ, the transaction partner of YY AS, obliging XX OÜ to transfer the financial obligations to YY AS in the amount of 4500 euros to cover the tax debt of YY AS to the Tax and Customs Board's bank account. 
YY AS had submitted an invoice to XX OÜ for services in the amount of 3200 euros, which had not yet been paid at the time of receiving the order.
According to the order, XX OÜ must pay for this invoice in the amount of 3200 euros to cover the debt of YY AS instead to the bank account of the Tax and Customs Board, using the reference number specified in the order.
After payment, the balance of the claim seized by the order is 1300 euros (4500 - 3200 = 1300).

YY AS submitted another invoice to XX OÜ in the amount of 3200 euros. From this invoice, XX OÜ must pay to the Tax and Customs Board 1300 euros (the balance of the claim seized by the order after the first payment). The remaining 1900 euros (3200 - 1300=1900) will be paid by XX OÜ to the referred account of YY AS.
Therefore, the order issued to XX OÜ is fulfilled.
OÜ XX does not have to inform the Tax and Customs Board about the execution of the order.

If XX OÜ has no outstanding invoices at the time of receiving the order and the cooperation with YY AS has ended, the person who compiled the order must be informed by e-mail or phone. This means that it is not necessary to challenge the received administrative act.

3. Seizure of right of claim for transfer of right of ownership and financial rights

Third parties to whom the Tax and Customs Board prepares orders can also be lessors.

The difference between orders made to lessors and other orders for the seizure of financial claims is that, with orders to lessors, the right of claim for transfer of right of ownership is also seized. This means the right of claim for transfer of right of ownership (including valid in the future) belonging to a taxable person against a lessor, which arises, for example, from a contract which is the basis for the use of a particular vehicle.

If the taxable person has paid the lessor all the financial obligations arising from the contract, then the lessor may not register the vehicle in the name of the debtor. The lessor informs the Tax and Customs Board when the debtor has acquired the right of claim for transfer of right of ownership. Then, the Tax and Customs Board usually requests the continuation of the enforcement proceedings from a bailiff with an application for enforcement. This is because the Tax and Customs Board does not have the right to sell property. The role of the bailiff in such a situation is to place a prohibition notation on the leased property and then, if necessary, continue with the sale of the leased property.

If, as a result of the enforcement actions of the Tax and Customs Board, it has not been possible to fulfil the financial obligation within a reasonable time, the Tax and Customs Board may contact a bailiff to continue the enforcement proceedings in order to collect the debt. If the debt is transferred to a bailiff, the bailiff's fee, and expenses, which must be paid by the debtor, are added to the tax debt.

Please note that the bailiff's fee and expenses must be paid even if the tax liability is reduced as a result of correcting the declarations later. It is therefore important to make sure that the information provided in the declarations is correct. If claims have already been sent to a bailiff for collection, it is usually no longer possible to apply for a payment schedule for these claims in the Tax and Customs Board. It is possible to request payment in instalments from the bailiff, but it must be considered that the bailiff will ask the Tax and Customs Board for consent and conditions.

Domestic provisions regarding the collection of tax debts apply only in each country's own territory, but the Tax and Customs Board has the right to request and provide international assistance for debt collection. International professional assistance is provided in accordance with the procedure and to the extent stipulated in European Union legislation and on the basis of international agreements. The competent authority of a foreign country can perform the same enforcement actions in order to provide international professional assistance as it does when collecting debts in its own country. For example, the competent Finnish authority can submit a request for debt collection to the Estonian Tax and Customs Board, after which the Tax and Customs Board will start collecting the debt incurred in Finland from the debtor in Estonia.

A uniform instrument

If the Tax and Customs Board collects a tax debt incurred in a foreign country, it sends a uniform instrument to the person along with the order containing a warning of compulsory enforcement. A uniform instrument includes the contact details of a competent authority of the foreign state and all relevant information to identify the uniform instrument authorizing enforcement, for example, information related to the claim. If the uniform instrument does not provide answers to all questions related to the claim, the person must contact the competent authority of the foreign state for additional information at the contacts indicated in the document. 

Contestation

Since the debt claimed by the order of the Tax and Customs Board derives from the uniform instrument, the validity of the debt cannot be challenged by the person in Estonia. For contestation of the uniform instrument a challenge or appeal must be lodged to a competent authority of a foreign state.

When providing international professional assistance, enforcement is suspended only if the enforcement document underlying the uniform instrument submitted by the competent authority of a foreign state is disputed in the foreign state and the Tax and Customs Board receives relevant information from the interested person or the competent authority that submitted the collection request. For example, a copy of the challenge can be used for this purpose.

Payment of taxes

The information on this page is intended to help in paying taxes and state claims, state fees, court securities, and securities established by the Estonian Tax and Customs Board.

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Payment of interests

If you have tax arrears, you are required to calculate and pay interest on the amount of tax outstanding by the due date. Interest is calculated as of the day following the day on which payment of the tax was due pursuant to law until the date of payment or set-off, inclusive of the latter.

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Payment of tax liabilities in instalments

If you are experiencing temporary difficulties in meeting your tax liabilities, it is possible to apply for payment in instalments.

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Forgiveness of tax arrears

A taxable person may apply to the Tax and Customs Board for forgiveness of his or her tax arrears if its collection is hopeless or would be unfair due to circumstances beyond the control of the taxable person, or if the income tax debt arises from the realisation of the taxable person’s assets as a security for the debt of a third party in enforcement proceedings or bankruptcy proceedings.

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Prepayment accounts

Every person has a prepayment account in the Tax and Customs Board’s e-services environment e-MTA, where all the amounts transferred to the Tax and Customs Board are received, and from which claims are paid. Upon payment of state fees and securities related to court proceedings or securities of the Tax and Customs Board, an account for state fees and securities or an account of the Tax and Customs Board’s securities will be created respectively.

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Last updated: 14.09.2023

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