Tax Prepayments

Companies and corporations must usually make tax prepayments on their profit. Profits subject to prepayments can include business operations, agriculture or other activities for the production of income. New prepayment or change of such must be requested separately by delivering a calculation including a company’s report of its incomes and expenses. Based on the information, the amount of tax prepayment is calculated.

For a company’s cash management, it is important to ensure, that the amount of prepayment is correct. If it becomes evident during the financial period that the amount of paid prepayments has been too high or too low with regard to the company’s operating result, the company can apply for an increase, decrease or removal of the assessed prepayment. During one month after the tax year has ended, there’s opportunity to supplement paid-in prepayments without having to pay late-payment interest, corresponding to the reference interest rate set by the Bank of Finland plus two percentage points (at least 2 %) . On the other hand, in case the amount of paid prepayment is too high when compared to the final income tax, the excess amount is refunded together with the refundable corporate interest which, however, only corresponds to the reference interest rate set by the Bank of Finland minus two percentage points (however, no less than 0.5 per cent).