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Payments to be rescheduled
VAT already paid by firms could be refunded
Published : 21 May 2020, 01:06
Updated : 21 May 2020, 10:28
The government is proposing that value-added tax (VAT) already paid in the early part of 2020 could be refunded to businesses as part of revised payment arrangements.
Under these arrangements, a rescheduled payment scheme would be drawn up for later payment of the returned amount of VAT to the Tax Administration, said a government press release.
“The temporary returning of VAT already paid is one of the government’s measures for alleviating the situation for businesses that find themselves in financial difficulties as a result of the COVID-19 epidemic. I’m pleased that this is now moving forward,” said Finance Minister Katri Kulmuni.
The government is also proposing that it would not be possible for the returned VAT to be used towards tax arrears in an adjusted payment arrangement or deferral, but would instead be paid to the VAT-liable business, provided that there are no other obstacles to doing so.
It is also proposed that late payment interest applicable to payment arrangements and deferrals would be lowered further to three per cent from the already reduced level of four per cent.
This lower rate would apply to taxes due between the start of March and the end of August and to VAT payable in early 2020 that is subject to adjusted payment arrangements.
The proposed changes would enter into force as soon as possible.