Finland

VAT Basics

What are the VAT rates in Finland?

The reduced VAT rate will only be applied to specific products covered by the VAT Directive.

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VAT rates in Finland by product or service

The standard VAT rate is 25.5%. Also, the standard VAT rate will generally apply to all goods and services for which no exemption or reduced VAT rate is provided.

The first reduced VAT rate is 14%. This reduced rate will be applied to most food products, including catering and restaurant services, water, and pet food.

In addition, legally, there is a reduced VAT rate of 10%. This other reduced VAT rate will generally apply to certain pharmaceutical products, books (both printed and digital), newspapers and periodicals, passenger transport, hotel accommodation, cinema, and sports services.

Supplies and services at 0% are general supplies, such as exports.

Finally, some supplies are exempt from VAT, such as, for example, health and social care, education, financial and insurance transactions, and real estate exemptions.

Furthermore, if you are in doubt about the VAT rate applicable to a particular product or service in Finland, we recommend that you contact us.

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VAT Deduction Limits in Finland

Input VAT is generally deductible as long as the goods or services are used for business purposes.

However, certain expenses are subject to special rules:

• Hotel accommodation: input VAT is 100% deductible provided the invoice is issued to the company and the expense is incurred for business purposes. The VAT on hotel breakfast is not deductible though.
• Business entertainment: input VAT is generally not deductible. However, staff entertainment is 100% deductible, although subject to limitations.
• Gifts to employees are not deductible.
• Marketing and samples of goods or advertising gifts are deductible.
• Attendance to conferences, fairs and exhibitions: input VAT is 100% deductible.
• Cars, vans and trucks cost: the deduction of input VAT is restricted, particularly when it comes to vehicles for mixed use. We recommend check the guidelines in detail.

A valid and fully compliant VAT invoice must be issued for each expense on which VAT is deducted.

Find here general information about VAT deduction in Finland, and here the VAT deduction rules for VAT on vehicles.

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Statute of Limitations in Finland

The statute of limitations is three years in Finland.

The statute of limitations period determines the periods on which the tax authority can go back to review the information declared, and apply additional VAT assessments, penalties or interests. An extended period of time may apply in certain scenarios, for example, when the Finnish tax authorities receive the information from international exchange of information between tax administrations.

The statute of limitations also determines the period a taxpayer can voluntarily correct any errors on past submissions, as well as deduct input VAT. This is three years calculated from the beginning of next year.

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Tax point rules in Finland

The tax point is the time when VAT becomes due. VAT due should be distinguished from VAT payable. VAT is due when the tax point occurs. VAT is payable between the day after the end of the reporting period and the due date to submit and pay the VAT return.

• General rule: When the supply of goods or services is subject to the mandatory issuance of an invoice, then the tax point is by the time of the supply of the goods or services. If the invoice is issued prior to the supply of goods or services, the tax point arises on the invoice date.
• Prepayments or advanced payments create a tax point because an invoice must be issued for each instalment or prepayment. Special rules apply for vouchers.
• Continuous supplies of services: if the intra-Community acquisition of a service covers a period of more than 1 year, VAT has to be accounted on an annual basis. Tax point is considered to have occurred the last day of the year.
• Intra-Community acquisitions and supplies: Tax point occurs on the invoice date or the 15th day of the month following the month in which the invoice was issued, whichever occurs earlier
• Import: Tax point occurs when the goods are imported according to the relevant import documents.

Find here official information about time for issuing an invoice.

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VAT registrations and simplifications in Finland

When Do I Need a Finnish VAT Number?

Generally, a foreign business must register for VAT (Arvonlisävero in the local language (ALV)) in Finland as soon as a taxable supply is made. The following are the usual examples of taxable transactions:

• Domestic supply of goods not reverse charged: A supply of goods located in the Finland where reverse charge does not apply requires a VAT registration of the supplier.
• Supply of services not reverse charged: Foreign non-established businesses supplying services on which Finnish VAT is due by the supplier must register for VAT. These services are rather exceptional, as the general B2B rule would apply.
• Export: Exporting goods to a non-EU country requires a VAT number before the export is made.
• Intra-Community acquisition: Acquiring goods from another Member State where all conditions for intra-Community movements are met requires the customer to register for VAT.
• Intra-Community supply: Supplying goods another Member State is also a taxable transaction that obliges the supplier to register for VAT.
• Distance sales: When applicable in case the Seller has not joined OSS. See the E-commerce manual for more information.

Finnish established companies can benefit from a VAT registration exemption threshold amounting to EUR 15,000. This is the VAT registration threshold applicable to small established businesses; however, a voluntary VAT registration is allowed. See Section about special VAT schemes.

Non-established companies must submit apply for VAT registration before performing any taxable transactions. There is no turnover threshold applicable to non-established companies.

Backdated registrations are allowed in Finland. Note that the first few VAT returns and payments for the accounting period may already be late if your company’s tax period is determined to be a month or a quarter but a longer period has already passed.

Input VAT incurred previous to the VAT registration may be deducted in certain circumstances, provided that the cost complies with the VAT deduction limits in Finland. This input VAT will be included in the first VAT return submitted by the taxpayer.

For VAT purposes, Finland does not include the Åland Islands.

More details about VAT registration in Finland can be found here.

Finally, if you are a company that de-registered in the past in Finland and you need to register again for VAT purposes, the process consists of a VAT reactivation of your previous VAT number. You should submit the form for notification of changes instead of a new start-up notification form.

VAT number format in Finland

• Country code: FI
• Structure: FI 88 88 88 88
• If you are registered for VAT in Finland, the VAT number is formed using the country code FI and a string of digits that is the same as the Business ID without the dash between the two last digits. For example, if the Business ID is 0765432-1, the Finnish VAT number is FI07654321.

Find here the official information about Finnish VAT numbers.

Where to check Finnish VAT numbers?

Find here the link to search for Finnish companies and verify if a foreign company is VAT registered in Finland.

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Fiscal Representative Requirements in Finland

A fiscal representative has to be appointed in Finland by companies not established in an EU Member State, or in Norway, and applying for a voluntary VAT registration under Section 12(2) of the VAT Act.

The VAT representative shall be a person resident in Finland, or a company established in the country. Also, the VAT or fiscal representative is jointly and severally liable for the VAT due by the foreign taxpayer.

In such cases, the resident representative completes a combined VAT return for the foreign companies (transactions mentioned in § 93 of the VAT Executive Order). After subsection 3, the resident representative must keep an account for each individual liable for VAT. Have a look at Section 9.3 of the Finnish guide.

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VAT Groups in Finland

VAT grouping is possible in Finland only for businesses involved in supplying exempt financial or insurance services to other taxable persons controlled by financial or insurance companies. Group members must be closely bound by financial, economic, and organizational links, so they may form a VAT group and be treated as a single taxable person for VAT purposes in Finland.

In addition, the following VAT grouping rules apply in Finland:

• Only Finnish established business as well as Finnish fixed establishments can be part of a VAT group.
• VAT grouping is optional in Finland and, once is formed, the group members are treated as a single taxable person.
• Intra-group transactions are disregarded for VAT purposes.
• Every group member is jointly and severally liable for the VAT debts and penalties of the entire group.
• There is no minimum time period for the duration of a VAT group.
• Members of a VAT group submit one single consolidated VAT return – periodical VAT returns and the annual VAT return.

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Consignment and Call-off Stock in Finland

The EU introduced a call-off stock simplification that all EU Member States must implement. This was put into place so that businesses that operate under a consignment stock structure do not have to VAT register in the country of destination. Finland has introduced the consignment stock simplification.

Have a look at the guide about call-off stock published by the Finnish tax authorities. Companies using call-off stock simplification and sending goods from Finland to other EU countries under this simplification must submit a special declaration.

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Finnish Bad Debt Relief

Bad debt refers to an unpaid invoice for which the supplier has paid the VAT to the tax administration: this is, an invoice has been issued with VAT, reported in the VAT return and the VAT amount has been paid to the tax authorities but the whole price has not been collected from the customer. This is often due to the client´s bankruptcy, insolvency or simple missed payments to suppliers. In these cases, most countries allow to recover the VAT initially paid to the authorities, however, the conditions change from one country to another.

Bad debt relief refers to the possibility of recovering the VAT from that invoice. Finland allows for bad debt relief by adjusting the out VAT paid in the periodic VAT return.

The necessary adjustments can be made in accordance with Generally Accepted Accounting Principles, i.e., when it has become evident that the payment will most likely not be received.

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Finnish Import Deferral and Postponed VAT Accounting

Finland has introduced a postponed import VAT accounting mechanism where import VAT can be reported as input and output VAT (reverse charged) in the VAT return instead of being paid to the authorities upon importation. Postponed import VAT accounting applies automatically if conditions are met. Taxpayers do not need to file a separate application.

The condition to apply postponed import VAT accounting (or reverse charge on import VAT) is that the importer is either a VAT registered company at the time of the import (it is not sufficient if the company is under registration process), or a self-employed VAT registered business, importing the goods for business purposes. In order to clear the goods from Customs, if condition are met, import VAT is paid to the tax administration directly in the VAT return (reverse charge mechanism), instead of paying import VAT to Customs. Private individuals and self-employed persons importing goods for private use cannot benefit from postponed import VAT accounting.

Import VAT deferral, meaning delaying the payment of VAT for a given period, is not applicable in Finland. You should however be aware of the difference as postponed import VAT accounting is sometimes referred as deferral import VAT.

Find here more information about import VAT in Finland.

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Finnish Customs and VAT warehouses

Customs or bonded warehouses are available for goods that have not cleared customs in the EU (T1). VAT and excise duties are not due when these goods are directly placed in the Customs warehouse. As soon as they exit this regime, these amounts are due. Sales within the customs warehouse are zero-rated.

VAT warehouses are available for cleared goods (T2). These goods have already paid customs duties. The conditions are similar to those of Customs warehouses. The goods allowed are those included in Appendix V of the VAT Directive.

Read more about Customs warehouses. Learn also about import special procedures: Temporary admission, End-use; Inward processing; and import after outward processing.

Finally, find here official EU guidelines on Customs’ special regimes.

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Special VAT Schemes in Finland

Businesses may benefit from the following special VAT regimes:

• VAT relief for small businesses
• Travel agents
• Margin scheme

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Special VAT relief for small businesses in Finland

Small business may avoid a VAT registration in Finland.

The small businesses are considered for this special scheme when the company’s turnover for the accounting period (12 months) does not exceed EUR 15,000. The threshold applies to accounting periods that have started on 1 January 2021 or after.

This regime is optional. Therefore, businesses can always opt to register for VAT.

Find here more information about the small business VAT relief scheme.

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Special scheme for small businesses in Finland

The VAT relief for small businesses applies only to businesses established in Finland, or foreign companies with a fixed establishment in the country. It is a form of tax credit for entrepreneurs and companies who are registered for VAT and whose net sales for the accounting period (12 months) are less than EUR 30,000.

If the company’s net sales are:

• EUR 15,000 or less, the company will be refunded the entire amount of the VAT qualifying for the relief.
• Over EUR 15,000 but less than €30,000, the company will receive a partial VAT relief.

Find here more information about the small business VAT relief scheme.

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Reverse Charge in Finland

Reverse Charge for Non-established Companies in Finland

According to art 194 of the VAT Directive, Member States may implement an optional reverse charge on supplies made by non-established businesses.

Finland has introduced this reverse charge on certain supplies. Domestic supplies of goods and services performed by a non-established supplier in Finland fall into the reverse charge mechanism provided that:

• The Supplier does not have a fixed establishment in Finland involved in the sale, and that it has not applied for a voluntary registration.
• The Customer is VAT registered in Finland (except the supply relates to construction services).
• Other exceptions where reverse charge does NOT apply: the Customer is a private individual; passenger transport service;. right to access an educational, scientific, cultural, entertainment or sports event, trade fair, exhibition or other similar event organized in Finland, as well as a service directly related to access.

Check the Legal Guidance about reverse charge on supplies made by non-established companies.

When reverse charge applies, the trader must mention in the invoice to the buyer that reverse charge applies (wording "reversed tax liability" or "käännetty verovelvollisuus" in the local language).

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Reverse Charge on B2B Services

Article 196 of the VAT Directive requires the reverse charge mechanism on all services subject to the B2B rule introduced in art. 44 of the same Directive. The B2B rule locates the transaction where the business customer is located. In case the customer is a private individual, B2C rules locate the transaction where the supplier is located.

According to the general B2B rule, any business resident outside Finland supplying services to a Finnish based customer will not charge any VAT and the transaction will be reverse charged by the customer.

There are however a number of exceptions to this rule. Where these exceptions apply, reverse charge is still applicable in Finland provided the following conditions are met:

• Services connected to immoveable property are located where the property is located.
• Passenger transport services will be located where the transport takes places (apportioned if necessary).
• Catering services are located where the catering takes place.
• Short term leasing of means of transport are located where the vehicle put at the disposal of the customer.
• Access to conferences, fairs and exhibitions is located where the event takes place.

The general rule may also be deviated where the supplier has a permanent establishment in the country of the customer and the PE has intervened in the supply.

Find out more about the rules for B2B services in the EU here. Exceptions to general rule are regulated in Articles 23 and following of the Finnish VAT Act .

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Reverse Charge on Specific Goods and Services in Finland

Domestic reverse charge may also apply to domestic supplies of certain goods and services made by companies in Finland. This reverse charge applies irrespective of the country of establishment of the Supplier.

• Supplies of CO2 emission allowances.
• Supplies of investment gold. For reverse charge to apply, the Customer must be VAT registered for VAT in Finland, and the Supplier has not opted to tax.
• Supplies of metal waste and scrap. For this reverse charge to apply, both the Supplier and the Customer must be VAT registered in Finland. Learn more.
• Supplies in the construction industry to a customer usually involved in the construction industry. Reverse charge applies to construction services and to hiring staff for construction. Find more information here.

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VAT returns in Finland

Frequency of VAT Returns in Finland

The frequency of filing of the periodic VAT returns depends on the annual turnover (net sales). If your business has just registered for VAT, the standard reporting period applicable will be one calendar month. However, businesses with low amount of sales may apply for its extension to the calendar quarter or the calendar year:

If you apply for a change on the reporting period, the Tax Administration will send you an acknowledgement of the changed tax period enclosed with information on the start date of the new tax period. Therefore, you must file all your VAT returns and make the payments under your previous reporting period before you get the acknowledgement letter.

In case your company is benefitting from quarterly or annual reporting periods but you exceed the relevant turnover thresholds, you must inform the tax office at the earlier possibility.

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Due Date of Finnish VAT Returns

The VAT return deadlines applicable in Finland depend on the reporting frequency:

If the 12th falls on a Saturday, Sunday or a public holiday, the due date is extended to the next business day.

Find here more information about the applicable deadlines, under the section When to file and pay.

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VAT Payments in Finland

Non-established companies will often make payments from an overseas account.

When paying taxes, use the Tax Administration’s bank account number and your personal reference number for the tax in question. The reference number allocates your payment to the correct tax.

You can find the bank account number, the reference number, the amount payable and the due date for payment in MyTax or on your tax decision. Also, the VAT certificate of the company usually contains the tax authorities’ bank account.

If you need the full address for making the VAT payment, you shall use the following:

Verohallinto — Finnish Tax Administration
Vääksyntie 4
00510 Helsinki
Finland

Have a look here at the information about how to pay taxes from abroad in Finland. Also, check here general instructions for VAT payments.

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VAT Refunds in Finland

The excess of input VAT is automatically and immediately refunded to the taxpayer. This is, when a taxable person declares more VAT deductible – e.g., due to purchases-, than VAT collected from sales, the difference is a VAT credit which shall be reimbursed to the taxpayer.

After the Tax Administration has processed a VAT refund claim, the taxpayer should receive the refund in its bank account in a week period. The Tax Administration sends the refund to the bank account number that you have given to the Tax Administration. VAT refunds below EUR 10 are not reimbursed.

In order to correctly receive the VAT refund, it is important that the tax authorities have the righ information about the taxpayer’s bank account. If you do not submit your bank account number on time, the Tax Administration will send the VAT refund as a money order through the Nordea bank. You can receive a money order only to a Finnish postal address.

Check here more details about VAT refunds of taxes. Also, refer to instructions on How to change bank account details in MyTax, and the Bank account form - non-IBAN.

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Nil and Corrective VAT Returns in Finland

A nil VAT return needs to be submitted even if there are no transactions to be reported for that period.

Errors or omissions in a VAT return must be corrected, even if they do not impact on the VAT position for the corresponding period. You will need to submit a corrective or replacement return. The corrective VAT return replaces the previous return submitted for the same period in full. This means that the replacement return must include all details that were already correct in the original return as well as the corrected details. Additionally, if there is additional output VAT to be paid as a result of the correction, you should do it. When submitting a corrective VAT return you need to indicate the reason for the correction among the list of options available.

Alternatively, if the VAT amount impacted by the correction does not exceed EUR 500 per reporting period, no corrective return is necessary. In such scenario, you can correct the VAT amount directly by including it on the following VAT return. This alternative method cannot be used if the error to be corrected does not impact the VAT amount.

When submitting a corrective VAT return, penalties may apply. If you file it within 45 days from the original return’s filing deadline, no penalties for late submission will apply.

In any case, the general deadline to make corrections on previous reporting periods is 3 years calculated from the accounting period or tax year which the tax concerns.

Find here the official instructions about making corrections to VAT returns.

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VAT Penalties in Finland

Find  the official information about late submission and payment. Also, find  information about late filing penalty in Finland. There is an  available.

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Finnish Tax Authorities Contact

Tax services for businesses: +358 29 497 051

Intrastat returns

Mon–Fri 9 am–12 am

Email address: instrastat@tulli.fi

Phone : +358 295 52 334

Customs contact

• Email address statistics: statistics@tulli.fi
• Email address payment transactions: veroreskontra@tulli.fi
• Phone: +358 295 5202
• Check the following link .

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ESL Returns in Finland

Due Date and Frequency of ESL Returns in Finland

The due date for submitting monthly or quarterly ESL returns is always the 20th day of the following month. If the 20th falls on a Saturday, Sunday or a public holiday, the due date is extended to the next business day.

ESL returns shall be submitted electronically via MyTax as standard procedure. Exceptionally, ESL returns in paper form may be accepted: only if there is a special reason: for example, if electronic filing is impossible due to technical difficulties.

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Nil and Corrective ESL Returns in Finland

If there are no intra-Community transactions to be reported in a given period, a nil ESL is NOT due.

In case of errors in previous reporting periods, you must submit a corrective ESL return in Finland. You should file a replacement report in MyTax, filling in the replacement amount in the customer-specific fields. This new statement replaces the one earlier you had filed previously. There is no need to repeat the lines where specific reporting on other customers has been correct.

Find here information on how to correct ESL returns in Finland, under the Section Making corrections.

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Penalties for Late ESL Returns in Finland

The late submission of ESL returns is punished with a penalty of ranging from EUR 100 to EUR 200, depending on the size of the negligence and how may days the return was late.

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Intrastat Returns in Finland

Frequency of Filing and Due Date of Intrastat Returns in Finland

Like in most EU countries, Finnish Intrastat returns are filed monthly. They follow the calendar month.

Intrastat returns are due on the 10th day of the following month. However, the exact deadlines shall be verified in the Intrastat calendar published by the tax authorities.

Separate reports are required for the flows of arrivals (intra-Community acquisitions) and dispatches (intra-Community supplies).

Intrastat returns must be completed in EUROS currency in Finland.

The exact deadlines must be verified in the Intrastat calendar published by the tax authorities. Check the Instrastat calendar for 2024.

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Finnish Intrastat Thresholds

The following annual Intrastat thresholds apply in Finland (calendar year):

• Arrivals: EUR 800,000
• Dispatches: EUR 800,000

These thresholds are computed annually according to the calendar year. Once filed, a complete calendar year needs to be covered by a company in order to stop filing these returns. For example, if a company exceeds the threshold in March 2022 on arrivals, Intrastat returns for arrivals are due until December 2023. These thresholds are calculated according to the invoice value. The authorities monitor the thresholds and often send letters to each taxpayer requiring them to file missing Intrastat return.

Have a look at our overview of Intrastat thresholds.

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Reporting of Specific Scenarios in Finland

Very often, the transactions reported in the Intrastat return are standard sales from one taxable person to another. However, a number of scenarios have specific reporting requirements.

The nature of transaction code in the Finland have been recently updated and have now two digits.

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Nil and Corrective Intrastat Returns in Finland

If no transactions are to be reported, a nil Intrastat return must be filed.

If an Intrastat return has been submitted showing wrong or incomplete information, you will generally need to correct the return:

• Usually, a corrective Intrastat return may not be required when the correction refers to transactions of a value less than EUR 2,000, unless it is a considerable error in quantity. For example if the value of the good is 900 EUR and the declared quantity is 200,000 kg when it should be 200 kg. The change in value or quantity (1st or 2nd quantity) of the commodity code should usually be at least 10% (+ or -).
• However, a corrective return must always be submitted in case of i) an incorrect VAT registration number; ii) in case of reporting the values in the wrong flow – e.g., arrivals have been declared as dispatches and vice versa; iii) if you reported the values under the wrong reporting period; iv) or if you must delete transactions because the movement of the goods does not belong to an Intrastat return (e.g., an import or export).

When a correction is required, the incorrect items must be deleted and the correct data must be submitted in a new declaration.

As for the way of filing, the returns sent via the Intrastat declaration service are corrected in the service. If you are sending the declaration as direct message, it can be corrected with a correction form.

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Intrastat Penalties in Finland

Due to the late submission or correction of Intrastat returns a penalty ranging from EUR 10 to EUR 2,500 may be imposed.