VAT in Finland- a complete guide. Rates and registration thresholds | VAT in Europe #20

The value-added tax VAT in Finland (locally known as Arvonlisävero) was introduced in the country in 1994. The Finnish Value Added Tax legislation is governed by the Value Added Tax Act No. 1501 of 30th December 1993, as well as by the European VAT Directives.

The regular publication of updates and leaflets regarding Finnish VAT is the responsibility of the National Tax Administration. However, for a company that is not a tax resident in Finland, VAT settlements are subject to the local tax office in Uusimaa.

Should you register for VAT in Finland?

The Finnish requirements regarding VAT registration are identical to the rules applicable in other EU member states. Finland, based on a few exceptions specified in the VAT Directive, has the right to waive this requirement. This applies to situations such as:

• importing goods into Finland for the first time,
• intra-Community sale or purchase of goods from other European countries,
• purchase and sale transactions of goods in Finland,
• accumulating consignment stocks in warehouses,
• engaging in call-off stock agreements, which involve storing inventory for one customer – in that case, they are exempt from tax provided that the conditions are individually negotiated with the local tax authorities responsible for tax collection.
• organizing and conducting events, conferences, exhibitions, and other cultural events where admission is charged at the entrance,
• online sales targeted at customers who are not registered as VAT payers – if the turnover from such sales, together with other sales to EU consumers, exceeds 42,000 PLN

Companies that are not tax residents in Finland are not strictly required to register in order to provide services in Finland. Customers usually settle in accordance with the self-assessment principle.

Compliance with VAT in Finland rules

Once a company registers as a VAT payer, its responsibilities will include adhering to local regulations regarding accounting, invoicing, and performing necessary procedures. This applies to:

• issuing invoices with sensitive data, specified in the Finnish VAT Act,
• proper invoicing of customers (for goods or services) in accordance with Finnish VAT regulations regarding the time of delivery,
• using electronic invoices, which should comply with the latest EU directives on invoicing,
• keeping VAT ledgers and other records to confirm VAT, Intrastat, and ESL declarations,
• processing credit notes and other corrections,
• applying foreign currency exchange rates.

Finnish VAT returns

In Finland, VAT returns can be filed monthly, quarterly, or annually. The deadline for submitting monthly VAT returns is the 12th day of the second month following the tax period. For example, the declaration for March must be submitted by May 12th.

Quarterly declarations must be submitted by the 12th day of the second month following the quarter being reported. For example, the declaration for the first quarter must be submitted by May 12th.

Additionally, enterprises whose annual turnover did not exceed 30,000 euros may file a VAT return once a year. The deadline for submitting the annual VAT return is the last day of February for the previous tax year. So, the annual VAT return for the year 2023 must be filed by February 29, 2024.

Rates of VAT in Finland

The Finnish government has the authority to set standard, higher VAT rates. Similarly, this applies to reduced rates. The EU requires that the minimum tax rate be above 15%. It also specifies a set of general rules regarding which goods qualify for reduced or zero rates. Every company not tax-resident in Finland and registered as a VAT payer is required to adhere to local rates and will be held accountable for any discrepancies in the charged VAT.

RATE	TYPE	TYPE OF GOODS OR SERVICES
24%	standard	all other goods and services not covered by the reduced VAT rate,
14%	reduced	foodstuffs (excluding live animals), some agricultural products, restaurant and catering services (excluding alcoholic beverages), non-alcoholic beverages, takeaway food, cut flowers and plants for food production,
10%	reduced	pharmaceutical products, domestic passenger transportation, books (including e-books), newspapers and magazines (sold by subscription), admission to cultural events and amusement parks, tv licence, writers and composers, accommodation in a hotel, admission to sports events, using sports facilities, domestic transportation,
0%	zerowa	printing services for publications of non-profit organizations, intra-Community and international transportation, taxation of certain bars, gold bullion, and coins, certain works of art, collectibles, and antiques.

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