Finland introduced Value Added Tax (VAT) in 1994 with a standard rate of 22%. The current standard VAT rate is 24%, which has been applicable since 2013.
The official Tax Authority of the country is Verohallinto, founded in 1970.
The standard VAT rate is 24% in Finland, which has been applicable since 2013.
A reduced VAT rate of 14% can be applied for product such as groceries, feed, restaurant and catering services, however it is not applicable for alcohol and tobacco products.
A reduced rate of 10% is applicable for a number of products, e.g. Books, newspapers, pharmaceutical products, accommodation services, passenger transport, etc.
Some items are eligible for applying 0% VAT, such as the sale, rental and chartering of VAT-exempt vessels and work performed on such vessels, tax-exempt sales of member’s magazines and advertisements to non-profit corporations, tax-exempt sales relating to warehousing procedures (tax warehouse in VAT), exports outside the EU, etc.
If the taxable turnover of a business is more than EUR 15,000, the business has to register for VAT. Voluntary registration is also possible for businesses with taxable turnover that is less than EUR 15,000.
Certain activities are exempt from VAT perspective, and do not require VAT registration, but in some cases voluntary registration is available (e.g. Medical services, social services, general postal services, etc).
Registration usually takes up to 3 weeks to be processed. If the company already has a Business ID in Finland, the registration can be completed through MyTax portal. The Business ID is issued when the business gets established.
In Finland, for monthly and quarterly VAT returns, the submission deadline is the 12th of the second month following the end of the tax period (i.e. VAT return for March should be submitted and paid by 12 May).
For yearly returns, the submission deadline is the end of February of the following year.
If the deadline falls on a weekend or public holiday, the submission is due with an extension on the following working day.
EU VAT recapulative statements should be filed on the 20th day of the month following the period end. The the Intrastat declaration should be submitted by the 10th working day of the month.
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The filing frequency of VAT returns can be monthly, quarterly or yearly.
VAT returns and EU VAT Recapitulative Statements should be submitted online, through the MyTax portal. Paper form submission of returns are only accepted in exceptional cases. Intrastat declasarions are submitted online through the Customs website, using an ASCII or CSV uploader file.
There are certain requirements regarding the content of an invoice, which includes:
In case the amount is less than EUR 400, a simplified invoice can be issued (except for intra-Community supplies of goods and distance sales of goods)
Finnish businesses have the opportunity to appoint an agent to act on their behalf regarding their VAT compliance, however it is not compulsory. In case the business decides to give authorization to an agent, it can be done online on Suomi.fi.
It is not compulsory to have a fiscal representative in Finland for VAT purposes, however it might be required in some cases for non-EU companies.
The Import One Stop Shop was introduced on 1 July 2021. It can be used for international consumer sales, allowing sellers to report VAT in a centralised manner in a single EU Member State. The IOSS covers services sold to private consumers in the EU and distance sales of goods to EU consumers. Registration for IOSS is voluntary, however if a seller does not register for IOSS, it will have to register for VAT in all the countries where consumers purchase the goods or services provided by the seller covered by the special scheme.
In Finland, the registration for IOSS can be submitted via MyTax portal, and once the Tax Authority has processed the registration, a decision letter will be sent also through MyTax portal.
Finland offers VAT relief for small businesses, who are registered for VAT and have had a net sales of EUR 15,000 or less for a period of 12 months. Furthermore, if the company’s net sales have been more than EUR 15,000 but less than EUR 30,000, there is a possibility for partial relief.
To submit the request for VAT relief, the company has to provide the amount of net sales and VAT qualifying the relief (not all sales and taxes can be taken into account for this). The VAT relief request can be submitted along with the VAT return, and the e-service will automatically deduct the relief amount from the payable VAT amount.
It is important to note that the amount received as VAT relief is taxable, and has to be included in the company’s accounting as income received.
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