Estonia, Financial Services, Markets and Companies, Taxation, Wages

International Internet Magazine. Baltic States news & analytics Tuesday, 28.11.2023, 20:47

Estonian state to support self-employed with payment of social tax

BC, Tallinn, 20.03.2020.Print version
The state will execute advance payments of social tax on behalf of self-employed persons for the first quarter to help such individuals cope with the impact of the economic difficulties going with the crisis, reported LETA/BNS.

"The state will transfer the amount of social tax of self-employed persons payable in advance into their advance payment accounts at the Tax and Customs Board. Those self-employed person who have executed the advance payment already can use the money for the payment of whatever tax obligation either at once or in the future, and may ask for [its transfer] into their bank account," Finance Minister Martin Helme said in a press release.

"We hope that this will serve as support for all self-employed persons who have the least bit of turnover and orders at this difficult time to stay in business," the minister said.

If the wage payout is smaller than the monthly rate of social tax, self-employed persons will not have to pay social tax on a smaller monthly rate in March, April and May. 

Neither self-employed persons nor other taxpayers will be calculated or charged interest for overdue taxes during a two-month period from March 1 to May 1, nor does the interest have to be paid later. 

The measure concerns both the calculation and payment of interest on tax indebtedness accrued earlier, as well as on debt accrued after March 1. The payment of interest will be suspended also in case of deferred tax arrears. From May 1, usual calculation of interest will resume -- then with a rate of 0.03% per day instead of the current rate of 0.06%.

In the case of deferral of arrears, the tax authority will be entitled to reduce the interest rate by up to 100%, compared with the present maximum rate of reduction of 50%.

The lower tax debt interest rate of 0.03% has been introduced indefinitely. 

The ministry added that tax returns have to be filled and submitted properly and on time also during the emergency situation, and taxes paid if at all possible, as these obligations continue to apply. For the functioning of the state at the difficult time, this is more important than ever before, the ministry said. 

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