The state supports sole proprietors by paying their social tax
27. March 2020 — 22:51
The state pays on behalf of the sole proprietors (FIE) the advance social tax payments for the first quarter to help cope with the economic difficulties caused by the crisis.
"The state will transfer the amount of the advance payment of the social security tax payable by sole proprietors in the first quarter to their prepayment accounts at the Tax and Customs Board. If a sole proprietor has already paid the advance payment, he/she can use this money to cover any tax liability, either immediately or in the future and may request the amount to his/her bank account”, said Minister of Finance Martin Helme. "We hope that this will support all sole proprietors, to continue activities, who at least have some turnover and orders in these difficult times.
If the salary pay-out is lower than the monthly social tax rate, then in March, April and May businesses do not have the obligation to pay social tax, at least from the monthly payment. Sole proprietors nor other taxpayers will be assessed with interest on arrears on tax debts during two months or from the 1st of March until the 1st of May and the interest will also not become payable later.
The measure concerns both the calculation and payment of interest on previously incurred tax debts, as well as the calculation of interest on tax debts incurred on or after the 1st of March. The payment of interest will also be suspended in the case of a deferred tax debt. The usual calculation of interest will be restored, starting from the 1st of May, however then already at the rate of 0.03 per cent per day.
The TCB will receive the right to reduce the interest by up to 100 per cent, in the case of deferred tax debts. Currently the maximum possible reduction in interest rates is 50 per cent. The interest rate will be reduced indefinitely from today's 0.06% to 0.03%.
During the emergency situation the obligation to present correct and timely tax returns still remains, and if possible, all taxes must be paid on time. These obligations will not be removed. This is more important than ever before for the functioning of the state, during these difficult times.
The sole proprietor's period of taxation for social tax is the calendar year, as the taxable income is determined once a year based on the income tax return of the natural person. The sole proprietor must make four social tax advance payments during the year.