Tax arrears are either the amount of tax not paid by the due date and the interest calculated thereon or the amount of tax arising from customs debt not paid by the due date and the interest calculated thereon. Tax arrears are not, for example, non-compliance levy, fines, etc.
Tax arrears are forgiven if
- collection of the tax arrears is hopeless;
- collection would be unfair due to circumstances beyond the control of the taxable person, including force majeure;
- income tax debt resulted from the realisation of a taxable person's property as security for debt of third parties in enforcement proceedings or bankruptcy proceedings.
What to keep in mind?
- Tax arrears cannot be forgiven by agreement.
- Forgiveness cannot be based solely on solvency problems.
As a general rule, recovery of tax arrears can be regarded as hopeless in a situation where the applicant’s work ability has been reduced and the applicant does not have additional income or realisable assets.
The work ability of a person of working age is assessed by the Estonian Unemployment Insurance Fund. Recipients of old-age pension need not prove the decrease in their work ability to the Tax and Customs Board.
Please add to your application:
- bank account statements for all of your bank accounts for the last 12 months;
- data on assets you own and/or hold, including joint marital assets (list of assets, description of condition, estimated value, etc.);
- information on your marital status and dependants;
- your (household’s) monthly average income calculation (including net salaries, pensions, benefits, scholarships, income from abroad, child support, rent, interest income and the like for you and all your household members);
- your (household’s) average monthly costs (including expenses on dependants, rent, utilities and communications, electricity, food, medicines, transport, loans, leases, hire-purchases, etc.);
- information on your loans, leases and hire-purchases (balance of liability, amount of monthly repayment and final due date);
- proof of assessment of work ability, if applicable.
What to keep in mind?
- The legality of tax arrears will not be assessed.
- The burden of proof lies with the applicant.
Collection of tax arrears is unfair if all these conditions are met at the same time:
- there is evidence of exceptional and unforeseeable circumstances (e.g. force majeure);
- it has been proven that the occurrence of the circumstance did not depend on the will of the applicant;
- it has been demonstrated that the occurrence of the circumstance was not preventable by the applicant;
- it has been demonstrated that the applicant is not able to eliminate the circumstance;
- the applicant has been shown to be in an unequal position compared to other similar taxable persons.
Please add to your application:
- evidence to support the explanations and claims contained in the application;
- information that you have acted in accordance with the applicable law in this case.
Income tax debt is forgiven if it arises from the realisation of the assets of the applicant as a security for the debt of a third party in enforcement proceedings or bankruptcy proceedings.
Please provide explanations and evidence of the situation described.
Submitting an application
In order for the tax arrears to be forgiven, an application in Estonian (free format) together with relevant evidence must be submitted to the Tax and Customs Board either:
- by e-mailing it to [email protected] (the application must be digitally signed), or
- by mailing it to Lõõtsa 8A, Tallinn, or
- by bringing it to one of the service bureaus.
The time limit for processing the application is 30 calendar days. We will issue a written decision to the applicant or his or her representative.
Last updated: 20.09.2022