Taxes must be paid on time even if you have appealed against a tax decision
A debited tax must be paid by the date on the debit note. A debited tax caused by a tax audit must be paid even if you have appealed against it. The only exception is a stay of enforcement. This means the prevention or a stay of the collection of taxes. Preventing the collection of taxes means preventing or postponing any recovery proceedings.
Prevention or a stay of enforcement
An appeal for the prevention or a stay of enforcement must be submitted in writing to the authority who handles the adjustment claim or appeal regarding the imposing or debiting of a tax. In practice, this means the Adjustment Board, the Administrative Court or the Supreme Administrative Court. If the matter belongs to the Adjustment Board, the Tax Administration may also decide on the prevention or stay of enforcement.
It is not possible to receive the prevention of enforcement or a stay of the collection of taxes based on a completed tax audit. Initiating a stay of enforcement can only be done once a debiting decision has been given. An appeal for a stay of enforcement can be done only in situations where you claim an adjustment for the taxation measures carried out based on the tax audit.
An appeal for a stay of enforcement without a written complaint is in practice not enough for a stay of enforcement as the appeal will be considered unwarranted. To ensure that the unpaid taxes will not end up in recovery proceedings, a well-grounded claim for adjustment should be drafted at the same time as the appeal for a stay of enforcement is carried out. In situations like these, a tax attorney’s help is needed.
The new Tax Collection Act took effect on 1 January 2017. If a tax has received a prevention or stay of enforcement order for the duration of the adjustment process, the Tax Administration cannot use a tax refund for settling taxes. If the prevention or stay of enforcement has been given as a partial order, the refund can be used. A partial prevention or stay may mean, for example, that your assets may be subject to recovery proceedings, but the assets cannot be sold or funds accounted.
The help of an experienced tax attorney is justified
The Tax Administration’s new software related to the prevention of enforcement has suffered from certain problems since the beginning of 2017. In matters related to the prevention of enforcement, a seasoned tax attorney’s help and contacts at the Tax Administration play a significant role. Preventing enforcement is crucial in situations where business operations continue as usual, despite the additional taxation decision enforced based on the tax audit.