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14.5. Interest and Penalties

Late Return Filing

Failure to file a tax return by the due date will result in a penalty of up to EUR 300.

Late Tax Payment

Late tax payments are subject to an interest penalty at an annual rate of 7% (previously 7.5%).

COVID-19 Emergency Measures

In response to the COVID-19 pandemic, Finland announced a reduction in the rate of late-payment interest on taxes included in a payment arrangement from 7% to 2.5% (previously 4%).

The reduced interest rate applies to taxes that are included in a payment arrangement through a request made between 21 April 2021 and 31 August 2021 (previously applied from 25 March 2020 until 31 August 2020);

The reduced rate of 2.5% will apply for as long as the payment arrangement is in force.  

Supplementary Tax Payment

When the final tax liability exceeds the advance payments, an interest penalty applies at a rate of 2.5% (2014). If the taxpayer makes the payment for the amount exceeding the advance payments by the deadline for the tax return, no interest penalty applies.

Filing of an Incorrect Return

For errors in a tax return, a fine of up to EUR 800 will be imposed depending on the seriousness of the errors. In the case of significant errors, a penalty of up to 30% of the correction may also apply.

Cases of fraud or other serious violations will result in additional fines and imprisonment of up to 4 years depending on the nature of the fraud or violations.

Tax Increase Penalty

Effective from 1 May 2018, a tax increase penalty may be levied on a taxpayer by the tax administration if:

  • A tax return or other notice, or any other information, document or statement submitted is incomplete or incorrect, or has been omitted entirely;
  • The taxpayer has not submitted transfer pricing documentation or supplementary information within the prescribed time limits or has submitted documentation/information that is substantially inadmissible or incorrect;
  • The taxpayer has not submitted a Country-by-Country report by the prescribed deadline or has submitted a report with essential omissions or errors;
  • The taxpayer has unduly applied for credit for tax paid abroad;

The amount of tax increase penalty may range from 0.5% to 10% on the basis of additional income. Where the amount of tax increase penalty cannot be imposed based on additional income, the penalty may range from 2% to 50%. The tax increase penalty is limited to EUR 25,000 with a minimum of EUR 150.