Finnish Cash Accounting Introduced With the 2017 Budget Law
This month the Finnish government published the 2017 budget law with important changes to value added tax.
As from next year, the Finnish tax authorities will allow cash accounting for small enterprises established in Finland. The turnover of these companies must not exceed €500,000. There are however further conditions about this regime such as application process and time requirements which still need to be published by the authorities.
Where the cash accounting regime applies, businesses issuing an invoice do not have to pay VAT until the payment is received from the customer. For example, if you issue an invoice in September 30 under the cash accounting scheme, you do not have to report and pay VAT on this invoice to the authorities as part of the third quarter VAT return. Instead, you will only report and pay VAT on this invoice when you receive the payment from your client, hence including the invoice in the VAT return period when this payment was received.
In addition to the cash accounting scheme, the 2017 Budget Law also introduced a new duty on electronic cigarettes and abolished the excise duties on sweets and ice-cream.