New Developments in Taxation
Next year will bring great changes in taxation. The Ministry of Finance has planned changes in respect to the content as well as technical aspects of the Taxation Act, which should offer the persons who arrears more flexible opportunities for fulfilling their obligations.
Payment of tax arrears in instalments will become more flexible. In the future payment in instalments can be requested also retroactively, i.e. for tax arrears the payment date of which has already arrived. The interests paid as a result of payment in instalments can be included in the expenses related to business. The rate of the published tax arrears will increase from the current 10 euros to 100 euros up to this limit, the Tax and Customs Board can issue a certificate on the absence of the tax arrears.
Collection of debts will become more efficient. For example, a company’s tax arrears could be collected from a person who is actually behind the debt. This means that the person responsible for a company’s tax arrears is no longer only a member of the board, but the responsibility could also be extended to the persons managing the company who might not even be set out on the registry card.
Amendments to the Taxation Act are generally a welcome phenomenon, but the Chamber does not support the developments regarding disclosure tax secrecy. Namely, access to the tax secrecy will be allowed to legal entities governed by private law with the aim of allowing real time testing of the IT systems with real data. The tax secrecy includes a very sensitive part of a company’s business and economic data and their disclosure to third parties is always a risk. So far, disclosing tax secrecy to third parties has been done only under limited grounds and it is allowed mainly for other state authorities to the extent that is necessary for performing their duties. Considering the risks, disclosing tax secrecy to legal entities governed by private law for the purposes of testing IT systems might not be justified.
Several other changes are planned with the draft Taxation Act Amendment Act, for example, there is a plan to update the employment register with the position of an employee, their place and rate of working. Additionally, there is a plan to establish a possibility to create certain administrative acts with the help of an automatic computer programme without the immediate participation of an official.
Read about the planned amendments here (in Estonian) and tell us what you think.