Tax arrears in installments – Debts with the tax office?

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How entrepreneurs and the self-employed can quickly finance their tax debt

As a rule, the tax office does not give you much time to pay the tax arrears or the tax prepayment. The deadline for paying the tax debt is usually one month from the date of the tax assessment notice. So a solution must be found quickly! Pfando is the ideal partner in such a case - because we provide cash within 60 minutes!

As the market leader for short-term liquidity, we pay out cash immediately in an uncomplicated manner, without any nerve-racking procedures such as a KSV statement and proof of income. The prerequisite for this is your own vehicle or company car with a market value of at least 3,500 euros. After a free appraisal in one of our branches by a trained employee, we will make you a non-binding offer for a pawn loan with which you can finance part or all of your tax debt!

Bankruptcy due to high back taxes

Existence-threatening situation for tradespeople, the self-employed and start-ups

As an entrepreneur, you bear responsibility, often not only for yourself, but also for your employees. Even if, at first glance, your own company appears to be generating good sales, as a business owner you should deal with the tax burden in good time. Otherwise, demands from the tax office in the form of unexpected tax back payments or advance payments - for example for income tax, corporation tax or VAT - can seriously jeopardize ongoing business operations.
In the worst case scenario, this can mean closure, including insolvency, or the dismissal of employees. Payments for rent, insurance and living expenses can also quickly fall behind in the event of unexpected back tax payments. For many start-ups and young entrepreneurs, there are potentially major risks here that can abruptly turn the once glamorous dream into a nightmare.

Suddenly unexpectedly high tax debts at the tax office

Possible reasons for business-damaging additional tax claims for companies and the self-employed

One of the main reasons for paying tax arrears is paying too little tax in advance. This may sound trivial at first, but it's actually quite complex. Problems often arise when the tax office determines advance payments for the current year after the first tax assessment - this often affects entrepreneurs from the second or third financial year onwards. The basis for calculating the advance payments is the profit shown in the tax assessment notice. As a rule, the advance payments are to be made quarterly in four installments. Anyone who has declared very low profits or no profits at all in the first few years must expect correspondingly high additional payments as their income increases.

The amount of the quarterly advance payments is generally based on the income determined in the first tax assessment notice - assuming that your income situation does not change significantly. If you have not built up sufficient reserves by then, it can be a financial burden if you have to make advance payments for the first time in addition to any additional payments.

It is therefore important to always pay VAT correctly during the year, to realistically assess your own income in good time in order to adjust advance payments for income tax or corporation tax, to build up reserves and to submit your tax return on time.

The basis for the quarterly advance payments determined by the tax office is the tax liability determined in the last income or corporation tax assessment - provided that there are no significant changes to the income situation.

If, at the start of your self-employment, you qualify as a small business pursuant to Section 6 (1) no. 27 UStG, your sales are exempt from VAT. However, you should definitely pay attention to how your income will develop in the coming years.

If your turnover exceeds the limit of 55,000 euros (gross) in a calendar year, the tax exemption will no longer apply in the following year. A one-off excess of up to 10% (i.e. up to 60,500 euros) remains harmless.

As soon as you are liable for VAT, you must regularly pay VAT to the tax office. If your annual turnover exceeds 100,000 euros, monthly advance VAT returns are mandatory; below this amount, a quarterly return is usually sufficient.

High tax arrears threaten your liquidity: what to do if you can't pay your tax debts?

A financial bottleneck can affect anyone, even companies whose business is doing well. We know from talking to our customers how unexpectedly tax debts can put a company in a serious crisis situation, and we take your plight seriously. Pfando's Cash & Drive principle is ideal if you need cash quickly and don't want to or can't do without your vehicle. We recommend that you make an appointment at one of our branches so that you can quickly become solvent again and pay your tax arrears to the tax office.

Check your tax assessment and pay it on time!

To avoid aggravating your tax arrears situation, you should definitely act quickly! You have one month after receiving the tax assessment notice from the tax office to lodge an appeal if you believe the notice is incorrect - for example, because income or expenses have not been taken into account. Irrespective of this, payment is also due within one month of notification, unless the tax office grants payment relief (e.g. deferral or payment by installments). You will find the exact due date for the tax arrears payment in your tax assessment notice. If in doubt, it is therefore advisable to contact your local tax office.

Possible consequences of unpaid back taxes for your company!

If you fail to make a tax arrears payment for your company on time, the tax office in Austria will levy a late payment s urcharge of 2% of the tax not paid on time if the amount is over 50 euros. If payment is still not made, a second and third late payment surcharge of 1% each may also be imposed. These surcharges are incurred automatically without the need for a separate reminder. A so-called respite period applies to bank transfers: if the amount is received by the tax office within three days of the due date, the payment is still considered to be on time. This three-day grace period does not apply to cash payments or cheque deposits.

The late payment surcharge is relatively low in terms of costs. However, persistent non-payment can have serious consequences. Outstanding tax arrears are treated by the tax office as enforceable debts and can be collected through enforcement measures. These include account seizure, in which your business and possibly also private accounts are blocked and debited. Likewise, there may be an attachment of property in which business or private assets - such as vehicles, equipment or other valuable items - are confiscated and auctioned off. Seizure of assets and bank accounts are then often the critical cuts that cause many other problems in ongoing business operations.

Another possible measure is wage garnishment, where the tax office accesses your earnings directly - for example, in the case of sole traders with withdrawals or managing directors with salary payments.

Financing options for your back taxes!

A classic bank loan or short-term loan is of course a good option for settling your tax arrears or advance payment. If you expect to receive a large payment for an order in the near future to plug the financial hole, this is a good option for getting the company out of financial difficulties in the short term. A loan approval from a bank is more likely for loans with a longer term, which also means you have a lower monthly burden.

However, if your own credit rating is not sufficient for a loan or there is no collateral, involving a second borrower or a guarantor can help you to obtain a loan anyway. If this person has a regular income and a positive KSV report, the chances of obtaining a bridging loan are much better. In the event of a payment default, the guarantor must be fully liable for the repayment of the loan - including interest and ancillary costs.

Another uncomplicated and immediately available option for obtaining cash to pay your tax debt at short notice is a collateral loan from Pfando. With us, you get quick liquidity - without proof of income, without guarantors and without KSV information. All you need to do is own a vehicle, such as a company car, car, truck, van or machinery with a market value of at least 3,500 euros. In this case, we at Pfando will be happy to make you a non-binding and free offer for a pawn loan with the aim of realizing the maximum payout amount for your vehicle.

As the market leader for short-term liquidity, we offer you several advantages:

• Cash in 60 minutes
• without proof of income & without KSV information
• Continue driving the vehicle directly
• Maximum payout amount
• Trained employees
• Bonus points program
• Austria-wide locations

Convert your company car, van or truck into cash quickly and easily, remain flexible and, above all, mobile! You can easily carry out your orders with the vehicles and at the same time receive money for the payment of tax arrears.

Defer tax debts: When does the tax office grant a deferral?

If you want to give yourself more time to pay a tax arrears payment, you can apply to the tax office for a deferral in accordance with § 212 BAO. This means that the due date of the tax debt can be temporarily postponed - either for a later one-off payment or as part of an installment payment.

The prerequisite for a deferral is that there would be considerable hardship if the payment had to be made on the due date - for example due to an acute liquidity bottleneck or a temporary emergency situation. At the same time, the tax office must be convinced that the tax debt can be paid in full at a later date, i.e. that collectability is assured.

The application must be submitted before the due date. In your justification, you should clearly explain why immediate payment is unreasonable - for example, due to temporary illness, non-payment by customers or other operational bottlenecks. You should also propose a specific repayment plan.

Whether a deferral is granted is at the discretion of the tax office. There is no automatic entitlement and the amount of bureaucracy involved can vary depending on the tax office. If the deferral is granted, deferral interest is usually charged. This is currently (as of 2025) 4.88% per year, depending on the applicable prime rate.

Tax arrears payment in installments: The tax office will only grant you payment of your tax debt in installments under these conditions

If you cannot pay your outstanding tax debt all at once, you have the option of applying to the tax office for payment in installments as payment relief. The prerequisite for this is that you - as with a deferral - submit a written application in accordance with § 212 BAO. This must be submitted before the due date and contain a comprehensible justification as well as a realistic repayment plan.

If the application is approved, you can pay the tax debt in monthly installments. As a rule, a maximum term of 12 months is granted. The monthly charge is made up of one twelfth of the amount owed and the deferral interest incurred. This is currently (as of 2025) 4.88% per annum, depending on the prime rate.

As with the deferral, the approval of the installment payment is at the discretion of the tax office. There is no legal entitlement, even if the economic situation is strained. It is important that the tax office is convinced that you will be able to repay the outstanding amounts in full within the requested period.

Deferral and installment payment rejected by the tax office - What now?

It is quite possible that both the application for deferral and the application for payment in installments will be rejected by the tax office. In this case, you have already gone through a lot of red tape without it having paid off - and at the same time valuable time is wasted, as several weeks can easily pass between the application being submitted, sent and processed.

As tax debts in Austria generally have to be paid within one month of receiving the tax assessment notice, you will quickly find yourself under time pressure if the tax office rejects your application. In such a case, you need an uncomplicated and reliable alternative that allows you to settle your outstanding tax debt in good time - before late payment penalties or even enforcement measures threaten.

Pfando's Cash & Drive GmbH is the ideal solution in this situation - because with us you can get cash within 60 minutes, become liquid again and stay mobile with your vehicle! Our trained staff will be happy to advise you and provide you with a free, no-obligation quote for your vehicle.

Credit for tax debts?

Pledge loan as a credit alternative without a credit check for your tax arrears payment

Were you unsuccessful in your attempts to finance your tax arrears with a loan, costing you a lot of time and nerves? - You are not the only person who is in a financial emergency and for whom the efforts to obtain a loan have not paid off.

In cases where you cannot provide any collateral, have to undergo a credit check and invest a lot of energy in the associated deadlines and requirements of a bank, it is worth rethinking!

Pfando offers you the better credit alternative! As the market leader for short-term liquidity, we specialize in providing competent assistance to our customers in payment difficulties and will make you an individually tailored offer for a collateral loan with the largest possible payout amount! With us, you do not need to provide proof of income or KSV information - simply bring your vehicle and the relevant documents with you!

If the loaned vehicle is used for business purposes, the costs associated with the pledge agreement can in many cases be claimed as business expenses for tax purposes - this can reduce your future taxable profit.

In short: with Pfando, you can easily obtain liquidity, remain mobile and flexible - and manage your tax arrears with a solution that suits your current situation.

Arrange an appointment in your area now and become solvent!