The novel coronavirus COVID-19 has been declared a pandemic by the World Health Organization WHO. This pandemic has significant effect on our society especially on companies and their finances. The situation is causing a lot of uncertainty and concern for businesses. We have listed below the measures that have been taken in Finland to help the businesses during these uncertain times.
The Finnish Tax Administration has announced many special arrangements concerning taxes during the exceptional circumstances. These special arrangements include VAT refunds, extended filing time for corporate income tax returns, eases in changing the prepayments and in the terms of payment arrangements as well as in some cases the Tax Administration’s possibility to remove the late-filing penalties.
VAT refunds for VAT amounts the companies have paid during 2020 can be made by request. However, the refund is granted as a loan that is to be paid back to the Tax Administration at a later date as a part of a payment arrangement. This measure is waiting for further guidance from the government and the Tax Administration.
Extended filing time for CIT tax returns has been granted to corporate entities whose accounting period ended between December 2019 and February 2020. More time for filing income tax return can be requested if there is a justified reason that prevents from filing the return on time. The additional extension can be applied in My Tax or with a paper form (Application for extension of time to submit tax return). The application must arrive in the Tax Administration before the original filing deadline. A free-form written account is sufficient to justify the reason.
A change in the prepayments can be applied, if the income or the expenses differ from the estimate that the amount of prepayment is based on. The prepayments can be checked, and the change can be applied in MyTax. The change can be exceptionally applied without providing an interim financial statement or other written report on the changes in income and expenses.
Payment arrangement can be requested on eased terms starting 25th of March, if the company has difficulties paying taxes. During the payment arrangement the Tax Administration will not start an enforcement process of the unpaid taxes that are a part of the arrangement.
During the exceptional circumstances, from the 25th March to the end of August:
- the first payment of the arrangement is due three months from the approval of the arrangement
- the new tax debts arising after the payment arrangement will be automatically added to the arrangement till the end of May
- the penalty interest is 4 percent on the taxes in the arrangement that have fallen due after the 1st March 2020.
Late-filing penalty on self-assessed taxes can be removed from request, if there is a justified reason for filing late. It is not possible for the Tax Administration to grant more time for filing the taxes. In case of a justified reason, contact the Tax Administration by phone or on MyTax on the due date of the specific self-assessed tax or immediately after.
Measures of support
The government has introduced a set of measures that have been created to help the economic situation of businesses in these exceptional circumstances. Different kinds of supporting measures have been proposed and implemented. The government has gathered a financial supporting package to help the economic situation and circumstances. The size of the supporting package is about 5 billion euros and it will be allocated to for example health care, municipalities and businesses.
Safeguard the financing of businesses
The purpose of the business supporting measures is to safeguard the financing of businesses in Finland. The support is allocated to companies by raising the financing possibilities of the Finnish government’s special finance company Finnvera. Also, the financing decisions of Finnvera will be made more fluent. Financing support is also given by Business Finland and the Centre for Economic Development, Transport and the Environment to the areas of business that have the most difficulties due to the corona virus circumstances.
The Bank of Finland has also launched a debt program of 500 million euros, which will provide the banks more opportunities to grant loans to Finnish businesses. Some banks have also expressed a possibility for flexible payments or payment holidays for existing loans. The businesses are advised to contact their banks in case of financing needs or payment difficulties.
Direct financial support
Direct financial aid can be applied from Business Finland, Centre for Economic Development, Transport and the Environment (ELY-centres) and municipalities depending on the number of employees in the company. Business Finland grants development aid up to 100 000 EUR for businesses with six to 250 employees. Centre for Economic Development, Transport and the Environment grants aid for businesses with one to five employees. Self-employed entrepreneurs without employees can apply for a 2000 EUR aid from municipalities.
There will be a 2.6 percentage point decrease in the employer contributions that will take effect from the 1st of June 2020 at the latest till the end of the year 2020. It is possible to get a payment time extension of up to three months according to the exception rule. The rule is concerning invoices that fall due between the 20th of March and the 30th of June 2020. The extension will be requested from the company’s employment pension provider.
The Tax Administration’s updating news page: https://www.vero.fi/en/About-us/newsroom/corona-situation/
Centre for Economic Development, Transport and the Environment: http://www.ely-keskus.fi/en/web/ely-en/
Business Finland: https://www.businessfinland.fi/en/for-finnish-customers/coronavirus/