Tax assessment time limit

What it means

The tax assessment time limit is the period during which the tax administrator can assess or reassess tax, for instance after a tax audit. Under the Tax Procedure Code it is generally five years from the end of the year in which the tax return was due. Income tax for 2025, with the return due in 2026, can therefore be assessed until the end of 2031.

If before the limit expires the administrator takes a step aimed at assessing tax, such as starting an audit, or the taxpayer files an amended return, a new five-year period starts from the end of the year of that step. The law also sets an overall cap, after which tax can no longer be assessed, except in cases linked to criminal offences.

Once the limit expires, the right to assess tax is extinguished: it is preclusion, not limitation, and the administrator applies it of its own motion. It works both ways: after expiry the taxpayer cannot claim a refund of an overpayment through an amended return either.

How it works in practice

The time limit determines how long documents must be kept. Although the Accounting Act sets its own retention periods, documents needed to support the tax should be kept at least until the assessment limit expires, and longer for tax losses and depreciated assets.

With a tax loss or assets depreciated over many years, the tax effects stretch far ahead. When auditing a later year, the administrator can examine the amount of a loss or the acquisition cost from a much earlier period, so we recommend keeping the supporting documents for as long as they are being used.

An amended return correcting an error in a past year is worth filing while the limit is still running. A voluntarily filed amended return carries a lighter penalty than a reassessment after an audit, but it also starts a new period during which the administrator can examine the whole year.

What to watch out for

A common mistake is destroying documents after five years without checking whether the limit was extended, for example by an audit or amended return. If the administrator then reopens an old period, the company cannot prove its expenses and the tax may be estimated by indirect methods.

Beware of wrongly counting on the limit having expired. A single step by the administrator aimed at assessment, such as a request or local inquiry, is enough to restart the period. In disputes over the limit it is therefore important to know exactly which steps were taken and when.