Tax debt is like any other debt when it comes to interest, i.e. the principal accrues interest. The interest is defined by the Interest Act. As the interest rates of the past few years have been low, it might make sense to take out a loan from some other place and pay the debited tax to the Tax Administration in case the chance to succeed with the tax appeal has been deemed limited.
It should be remembered that you must pay reassessed tax and the interest accrues even if you appeal against the decision. If a tax attorney compiles a well-founded appeal and demands a stay of enforcement, the Tax Administration may grant a stay of enforcement for the reassessed tax. However, the Tax Administration is not legally obligated to grant a stay of enforcement. When applying for a stay of enforcement, it is best to turn to a tax attorney for help.
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The late-payment interest is calculated for debited and overdue tax in a manner stipulated by section 4 and 5 of the Tax Increase and Late-Payment Interest Act. The late-payment interest is the reference rate for the half-year period preceding the calendar year as referred to in section 12 of the Interest Act plus an additional seven percentage points. The late-payment interest is calculated from the day following the due date of the tax until the payment date, including the payment date. If the unpaid tax is paid in instalments, the late-payment interest is calculated separately for each unpaid amount. The late-payment interest must be paid for the tax and the possible tax increase.
For assistance, you can use the interest rate and tax increase calculator. The calculator can be used to calculate the amount of the interest rate.
There is another type of late-payment interest rate that is an interest rate calculated for the taxes referred to in section 5 of the Tax Increase and Late-Payment Interest Act. The interest rate is the reference rate in force during the half-year period preceding each calendar year pursuant to section 12 of the Interest Act plus an additional seven percentage points. In general, the late‑payment interest rate is calculated for unpaid tax from the day following the due date until the payment date.
The Tax Administration or some other authority levying tax cannot collect a tax increase, late‑payment interests and discounted late-payment interests in full or in part if the payment of tax is delayed due to measures by the authorities. This type of a delay may be caused by, for example, an unreasonable prolongation of a tax audit.
The matter is regulated by section 53 (a) of the Administrative Judicial Procedure Act:
“If the matter involves the imposition of an administrative financial sanction or an appeal against the decision of an administrative authority by which such a sanction was imposed, the Administrative Court or another judicial organ may, in its decision, take consideration of the fact that the processing of the matter was delayed and this violated the right of the party concerned to have a trial within a reasonable period of time. To compensate for such a delay, the Administrative Court or another judicial organ may lower the amount of the administrative judicial sanction or eliminate it in full.”