Tax board chief: Half a million taxpayers due a rebate

Director-General Valdur Laid of the Tax and Customs Board was Estonia's top-paid official in 2018.
Director-General Valdur Laid of the Tax and Customs Board was Estonia's top-paid official in 2018. Source: Siim Lõvi /ERR

Valdur Laid, Director General of the Tax and Customs Board (MTA) says that while online filing of taxes began Thursday night, with close to 150,000 doing just that by Friday lunchtime, it is wise to wait a couple of days, or even more, before declaring, due to high levels of demand on the authority's e-channels.

Speaking on commercial radio station Kuku Raadio's "Nädala tegija"  broadcast, Laid said that while how many people are likely to get rebates, including for overpaid taxes, for 2019, will be clearer once all the returns are in, this is likely to stand at around 500,000 taxpayers, or around 50 percent of the entire taxpayer base.

A little under 70,000 are likely to have underpaid and will have to make payments by the October 1 deadline, he said.

As reported on ERR News, the tax return deadline has been shifted back one month to April 30 this year, with the due date for payments October 1.

The MTA says this move has highlighted the option of charitable giving and that this is tax deductible.

"Christmas has shown that Estonians are very dedicated givers to charity, and now we have integrated the opportunity to do good with a positive outcome, when people become aware of income tax rebates [due to them]," Laid said, according to ERR's online news in Estonian.

On the issue of rental income, Laid said the MTA has become more vigilant in this area, particular with those with multiple rental properties, who have received reminders.

The same applies to the sale of real estate, Laid said, since once every two years real estate purchased for personal use can be sold tax-free, but all other real estate transactions must be declared as taxable.

"We have previously informed the public that we have dealt with these issues and sent reminders to people who seem to be at risk, and we also enquire in the tax return whether rental and real estate sales and income earned abroad have been declared," Laid said.

The exchange of information between the tax authorities of different countries is somewhat in real-time and up-to-date, so it makes sense to record the income earned abroad, Laid said.

When people first had to declare their income under the new system last year, many remained unconvinced that they were doing everything right, and the number of inquiries to the tax authorities increased significantly via e-channels, phone and MTA offices.

 The burden on the latter is growing every year during the income tax reporting period, Laid said.

"In previous years, it dropped significantly after one or two weeks, but last year /.../ there were queues for the next two months almost every day," he said.

If a taxpayer receives a notification that his or her declaration is subject to additional verification, there is no reason to worry, Laid said, noting that recovering overpaid tax quickly works well in Estonia, adding if the MTA wants to verify a tax return more randomly or for some other reason, this usually means that it simply takes a little longer to get your money back.

The MTA will start to pay rebates on excess income tax from February 26 for electronic filers, and from March 19 for paper filers (the paper returns themselves will be issued on Monday).

Both rebates by and payments to the MTA must be made by October 1.

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Editor: Andrew Whyte

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