Compulsory execution

(1) A tax authority is required to collect tax arrears unpaid by a taxable person. Compulsory execution of claims arising from tax arrears shall be conducted pursuant to the procedure provided for in this Chapter and in legislation regulating enforcement procedure. If a taxable person is declared bankrupt, tax arrears shall be settled pursuant to the procedure provided for in the Bankruptcy Act.

(2) Compulsory execution of claims arising from tax arrears is permitted if:

1) the due date for performance of the obligation has arrived and the claim is collectable;

2) the taxable person has been notified of the administrative act containing the claim pursuant to the procedure provided by law;

3) the tax arrears are not being paid in instalments;

4) the limitation period for the tax arrears has not expired and the tax arrears have not been forgiven or have not extinguished on other grounds;

5) execution of the administrative act has not been suspended.

(3) Compulsory execution of a claim for an amount of tax declared and not paid by a taxable person or an amount of tax payable pursuant to a tax notice is permitted only after a term has been set at least once for the taxable person to pay the tax arrears together with a warning stating the consequences of failure to perform the obligation within the term (§ 129).

(4) A tax authority may also collect fines imposed by the tax authority and other financial obligations arising from this Act, including the costs of substitutive enforcement and penalty payments and the costs of the performance of obligations by interpreters, translators, experts or third parties if, pursuant to law, such costs are payable by the taxable person. In such case, the provisions concerning the compulsory execution of claims arising from tax arrears apply to the compulsory execution of such claims. If a person who is obligated to cover costs or pay a penalty payment has not incurred tax arrears or if a tax authority has not commenced compulsory execution of claims arising from the tax arrears, the tax authority may submit a request for compulsory execution of the abovementioned claims to a bailiff.

(5) The tax authority shall first collect the amount of tax to be paid and thereafter interest. If other financial obligations arising from this Act are subject to compulsory execution together with tax arrears, the arrears shall be collected in the order provided for in subsection 105 (6) of this Act. If amounts of money recovered as a result of compulsory execution are not sufficient to satisfy all tax claims, the amounts of money recovered as a result of compulsory execution shall be calculated to cover different taxes in the order provided for in subsection 105 (6) of this Act.

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

(5¹) [Repealed - RT I 2008, 58, 323 - entry into force 01.01.2009]

(6) If amounts of money recovered as a result of compulsory execution conducted by a bailiff are not sufficient to satisfy all claims, the amount received shall first be calculated to cover the costs of execution and the remuneration of the bailiff and, thereafter, the claims shall be satisfied in the order provided for in subsection 105 (6) of this Act.

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

(7) A tax authority for a state tax may, by way of compulsory execution, collect state tax arrears of rural municipality and city agencies. If a state agency incurs tax arrears, the administrative authority exercising supervisory control over the state agency shall be addressed to settle the matter.

(8) A tax authority has the right to waive compulsory execution if the expenses related to compulsory execution exceed the amount to be collected or collection of the amount is hopeless due to the insolvency of the taxable person and if it is not expedient to submit a bankruptcy petition.