§ 114. Writing off and forgiveness of tax arrears

(1) A tax authority for state taxes shall write off:

1) the tax arrears of a legal person upon the dissolution of the legal person with bankruptcy or liquidation proceedings or upon the compulsory dissolution of the legal person without liquidation proceedings if no third party is liable for performance of the tax liabilities or the tax arrears cannot be collected from such third party;

2) the tax arrears of a natural person upon the death or declaration of death of the natural person if no estate exists which could be subject to a claim for payment, or tax arrears to the extent exceeding the value of the inventoried estate from which claims with higher ranking have been satisfied pursuant to the provisions of the Law of Succession Act.

 

(2) A tax authority for state taxes may forgive tax arrears in order to make a compromise in bankruptcy proceedings, as well as by debt restructuring by  way of reducing the debts in the reorganisation procedure or in the debt restructuring procedure.  If a tax authority agrees to a compromise proposal, the tax authority shall make a decision to forgive tax arrears, which enters into force on the date on which the compromise is approved.

[RT I, 06.12.2010, 1 - entry into force 05.04.2011]

 

(3) A tax authority for state taxes may forgive the tax arrears of a taxable person on the reasoned written request of the taxable person if collection of the tax arrears is hopeless or would be unfair due to circumstances beyond the control of the taxable person, including force majeure. The tax authority has the right to request that documents that are necessary to establish the abovementioned circumstances be submitted. In such case, the tax authority may make a decision within thirty days as of the submission of the documents. The provisions of subsection 111 (5) of this Act apply to the forgiveness of tax arrears.

[RT I, 06.12.2010, 1 - entry into force 05.04.2011]

(4) The Minister of Finance shall establish the procedure for the writing off and forgiveness of tax arrears by a regulation.

§ 1141. Restructuring of tax arrears and release thereof

(1) The provisions of this section are without prejudice to the restructuring of tax claims and release thereof in the reorganisation procedure of a legal person or debt restructuring procedure of a natural person or release from debts in the bankruptcy procedure in accordance with special laws.

(2)  If the restructuring of tax claims and release thereof  in the reorganisation procedure of a legal person, confirmation of compromise in the bankruptcy procedure or debt restructuring of a natural person (entrepreneur)  is state aid within the meaning of Competition Act , the tax authority shall follow the provisions of § 34¹ of  the Competition Act.

[RT I, 06.12.2010, 1 - entry into force 05.04.2011   

Chapter 11

Interest

§ 115. Interest payable by taxable person

(1) If a taxable person fails to pay tax by the due date prescribed by law, the taxable person is required to calculate and pay interest on the amount of tax outstanding by the due date. Interest shall be calculated as of the day following the day on which payment of the tax was due pursuant to law until the date of payment or set-off, inclusive of the latter.

(1¹) Upon provision of international professional assistance interest on the amount payable in a foreign state shall be calculated from the day following the day when the tax authority received from a competent authority of a foreign state a request for recovery until the day of payment of the tax, the latter included.

[RT I, 13.12.2011, 1 - entry into force 01.01.2012]

(2) If, on the request of a taxable person, an amount of tax is refunded to the taxable person or is transferred to cover other tax liabilities of the taxable person and if such amount of tax is greater than that due to be refunded or transferred pursuant to an Act concerning a tax, the taxable person is required to calculate and pay interest on the amount refunded to the taxable person or transferred to cover other liabilities without basis. Interest shall be calculated as of the day on which the amount was refunded to the taxable person or transferred to cover other tax liabilities until the date of payment or set-off of the amount, inclusive of the latter.

(3) If a taxable person fails to pay interest pursuant to the provisions of subsections (1) and (2) of this section, the tax authority shall issue a claim for interest stating the number of days delayed, the interest rate, the amount of interest payable and the term for payment. The term shall not be shorter than ten days. The provisions concerning notices of assessment (§ 95) apply to claims for interest.

[RT I 2008, 60, 331 - entry into force 01.01.2009]

 

(4) A claim for interest may be issued in a notice of assessment, a liability decision, a decision concerning fulfilment of a claim for refund or a warning simultaneously with the assessment or collection of an amount of tax. If tax arrears are collected by way of compulsory execution, interest shall be calculated by the tax authority or bailiff conducting the enforcement proceedings. If interest is paid by way of set-off of a claim for refund or in the course of enforcement proceedings, the term for payment of a claim for interest provided in subsection (3) of this section and the minimum rate specified in subsection 119 (3) of this Act shall not apply thereto and payment shall take place on a continuous basis.

[RT I, 10.12.2010, 4 - entry into force 01.01.2011]

(5)  The provisions of subsection (1) of this section also apply if the taxable person fails to make advance payments by the due date prescribed by law.

(6)  Interest is received by the state.

[RT I 2008, 58, 323- entry into force 01.01.2009]