A company can request a refund of the VAT paid and pay it later

The company can request a VAT refund it has paid in January, February, and March 2020 by making a payment arrangement request to the Finnish Tax Administration. The company will pay later the returned VAT back to the Tax Administration according to the payment arrangement. A request for a payment arrangement can be made in MyTax (OmaVero) starting from 26.05.2020.

Taxes must be paid back later according to the payment arrangement

You can use the payment arrangement to get back the VAT paid by your business due in January, February, and March 2020.

The easiest way to make a request for a payment arrangement and a VAT return is in MyTax (OmaVero) starting 26.5.2020. The request can also be made starting 26.5.2020 via the Tax Administration service number 029 497 028.

Please note that it is a loan, meaning your business is not allowed to keep the paid-in VAT on a permanent basis. As a part of the payment arrangement, the company undertakes to pay the VAT back to the Tax Administration later. Under the payment arrangement, you will also have to pay 3% of late-payment interest on the VAT amount. The late-payment interest is calculated from the original due date of the tax.

If your business has previously applied for a payment arrangement with eased terms, and now wants to complement it with a VAT return request, you must submit a new payment arrangement request no later than June 15, 2020. The new payment arrangement request will replace the previous one.

An approved payment arrangement request will affect how your tax refunds are used

If your payment arrangement request is approved, it will affect any tax refunds you may receive from the date the application is approved until the end of the year. The Tax Administration will not use the tax refunds to pay the taxes included in the payment arrangement, as a rule, they are paid to your company directly. Nevertheless, tax refunds can still be used to pay tax debts that are not included in the payment arrangement; and any other debts that are being recovered by enforcement.

By requesting a payment arrangement, you can also request the Tax Administration to cancel the use of your tax refunds received in April, May, and June for paying your taxes. These taxes will then become unpaid again and will be added to the payment arrangement. The late-payment interest accrues from the original due date.

Processing of payment arrangement requests will begin in June 2020

The lower-than-normal interest rate on payment arrangements requires a temporary change in the law. In light of current information, the law will enter into force in June. The exact date is not yet set.

Once your request for payment arrangement has been processed, you'll be notified whether the request was approved. If you requested for your paid-in VAT back, your tax will be refunded to you approximately one week after the date of approval. If you requested the cancellation of your refunds, the tax refunds will be paid to you in accordance with the accepted schedule.

More detailed information can be found at Finnish Tax Administration website