Extension of deadlines and deferral of payments
Extensions granted for individuals, but not for SMEs or large businesses, which are still required to submit tax declarations on time. Our service bureaus were closed between 13 March and 18 May, so the deadline for submitting Personal Income Tax returns of 30 April 2020 was extended to 30 June 2020.
The tax authority can make changes to previously agreed schedules of payment in instalments for individuals, SMEs and large businesses.
Remitting penalties and interest
During the emergency situation period (from 1 March to 17 May 2020) we suspended interest calculation on the tax arrears for individuals, SMEs and large businesses From 18 May (after the end of the emergency situation) the interest calculation will continue, but the interest rate will be reduced from the current 0.06% per day to 0.03% per day from 18 May 2020 until 31 December 2021.
Debt payment plans and suspending debt recovery
Taking account of the emergency situation, we are more flexible on giving payment schedules and we encourage individuals and companies to request a payment schedule. In case of the payment of the tax liabilities by instalments, the interest rate can be reduced by up to 100% (from 01 May until 31 December 2021).
We stopped all debt recovery during the emergency situation. Debt recovery proceedings which were made before the emergency situation remained in force. We will open the public inquiry of tax arrears on 25 May 2020 (it was also closed during emergency situation) and after that during the 22. week we will start recovery of tax debts.
Our refunds are already very quick, starting with 5 working days. Our routine has not changed.
Audit policies and tax certainty
All the necessary information concerning changes in tax law and in our services was posted promptly on our website.
There were no changes in audits that had been already initiated. The Impact of Coronavirus has been taken into account when calculating risks for new audit targets.
Enhanced services and communication initiatives
Everything could be done electronically already before Coronavirus. There hasn’t been need for longer opening hours of telephone centers. Although we have made changes to job management inside tax authority to be able to solve taxpayers’ problems as quickly as before.
Agreed communication plan, special section in our website (ETCB's information on emergency situation), dedicated webinars.
The tax authority has cooperated with other state authorities that pay out subsidies (we have supported with information and risk analysis).
Dedicated web page: https://www.emta.ee/eng/emergency-situation
Business Continuity Measures
Long before the Covid-19 crisis, we have implemented fully electronic decision-making processes. In the interest of rapid implementation of national decisions and to ensure the efficiency of information exchange we established a special Covid-19 steering group, in which all the activities were represented. We also launched different regular (weekly, daily) informative interactive meetings with our officials working remotely from a distance or in the office.
We have set up effective digital solutions before the crisis. Risk management is greatly automated and set up to detect any new risks, we are continuously monitoring the changes in tax data, including Covid-19 impacts. Digital processes are supported by different information security measures that meet the high expectation also within the period of the crisis - policy based on ISKE, three-step reference system for information systems, local implementation of German BSI, mandatory by the law, current version is 8.00, audit at least every three years with the external auditor reviewing both the organisation of information security and its implementation. Regarding the measures taken recently, we have taken additional control over the activities of users with privileged rights and enhanced monitoring of data processing.
Identification of critical and non-critical activities
We have temporarily cancelled certain activities not suitable as a result of the changes. For example, tax debt recovery measures were postponed temporarily, we suspended the disclosure of tax debt information for third parties (public query), provided interest exemption on tax debts occurring during the crisis, extended the deadlines for submitting the declarations. We continuously estimate and plan our activities and resource management to maintain and ensure high tax compliance level in a changed economic environment.
Understanding critical vulnerabilities
Measures are no different from the pre-crisis period.
Staff and taxpayer safety
Risks related to the spread of infectious diseases do not differ from the usual situation, but the occurring probability may have increased. We have supplied the organisation with additional protective equipment, measures (including physical solutions) on occupational health tactics are put in place (protection of boarders, tax procedures and customer service, taking statements etc.).
Risks related to home-offices do not therefore differ from the usual situation as we have provided our staff the opportunity to work remotely also before the crisis and all related support mechanisms were already developed. But the extent of the remote working has increased, so also the occurring probability of the risk may have increased. Regards to information security issues, we believe in the importance of prevention. Auditing of usage of data is common. We have improved the analysis of audit logs, where we use expert models. We have taken additional control over the activities of users with privileged rights, and there is continuous network monitoring in close cooperation with respective authority (Information System Authority). Continuous monitoring of the activities of the officials. Weekly notification and enhanced monitoring of data processing. A new digital test has been made available to all officials, including cyber-learning materials and the obligation to pass the test.
Measures are no different from the pre-crisis period.
No special measures have been implemented. ETCB uses operational communication with the taxpayer through e-channels and digital tax system in place to support remote activities. With regards to our staff, we increased the regularity of informative meetings (interactive, weekly, daily).
Training and redeployment
To prevent improper use of protective medical equipment and to protect staff welfare we have repeatedly provided the staff with the necessary instructions. Estonia is a border country for EU, our customs and tax officials are already used to carry out related proper border crossing tasks. Still, the closure of the borders within the EU related to movement restrictions did affect the daily routine of some of our officials and training was performed to ensure the best execution.
Recruitment and retention
This has not proved necessary.
It is highly relevant to stress the importance of scenario planning regarding national support measures to mitigate the effects of the crisis. The Estonian government has established a number of financial support measures, our role in this is to support with the analysis of tax risks, so that tax risks regarding tax fraud are taken into account and mitigated. For example, if the state builds the support measures and decisions on the tax data regarding the amounts of turnover and labour tax has been reported by respective taxpayer, we shall make sure that we mitigate the risk of incorrect data (misrepresentation from the taxpayers in order to qualify for the support measure). Therefore, we have established with respective institutions a secure data exchange and supplemented the regulation for the protection of tax secrecy within this cooperative approach. As our risk analysis is automated, the data exchange and detection of fraudulent activity is very efficient to avoid fraud in support measures and make sure the right target group receive the support. Regarding the risk methodologies in place, we continuously scan the changes in the data, including corrections of declarations and other amendments to the tax data, also RIFF notices and other international information is implemented to this automated process. The outcome is put into patterns to detect new tax risks arising from the crisis and to improve the existing methodologies. The methodologies are fully automated and initiate notices if changes appear.
The temporary measures taken during the crisis might have longer-term impact on tax administration resources than first meets the eye (both fiscal and HR) and because of this, the scenario planning is very important. For example the government has set the expectation for the temporary measure that affects tax collection principles so the approach affects our accounting system and we need to make severe changes also into our digital accounting system, that later on, when the situation calms, must be changed back again - tax administration faces rapid IT developments to implement government decisions, also after the crisis (procurement proceedings, financing developments, setting priorities) . So, the impact is not only during this crisis, but continues to drive the necessity for the developments in the future.
In case you have any document of information which you find worth to share regarding the actions, measures or concrete experiences in countering the crisis, please do not hesitate to upload it to the subpage focusing on Covid-19 Crisis Support on IOTA website in order to share it with other members.