VAT in Finland is generated on the sale of goods or services (passenger transportation, goods transportation, construction, sewing services, consultations, etc.). There are exceptions, for example, healthcare services are not subject to value added tax.

VAT in Finland

VAT in Finland is paid by all business representatives whose turnover of goods and services exceeds 10,000 euros per year. Firms with less turnover have the right to pay VAT voluntarily, reducing taxable income by it.

The consumer pays VAT on the cost of the product/service, and the entrepreneur pays it to the state, that is, it is the business that is responsible for paying VAT.

Value added tax in Finland applies to:

  • sale of goods and services in the form of business;
  • imported goods;
  • purchase of goods within the European Union/from European Union countries.

Registration in the VAT register must occur before the start of taxable activities.

VAT tax rate in Finland:

  1. The general rate applicable to most goods and services is 24%.
  2. Food and catering services – 14%
  3. The rate on medicines, books and printed publications, cinema, cultural and sporting events, passenger transportation, television and radio broadcasting is 10%.

In Finland, companies must register with the tax office as VAT payers on their own initiative.

For VAT payments in Finland, the reporting period is the month. The deadline for filing a declaration is the 12th day of the month following the reporting month. The following information is included in the VAT return:

  • the amount of tax on transactions within Suomi;
  • the amount of tax on purchases in EU countries;
  • tax deductions;
  • trade tax, which is not subject to tax;
  • negative tax.

The declaration is submitted even if the company did not conduct business in a particular month.

The deadlines for paying value added tax in Finland are determined by the Tax Office. The VAT payment must be made no later than the 15th day of the month following the reporting month.

Features of VAT in Finland

What is the VAT tax in Finland for goods exported outside the EU? VAT is not charged on goods that are not considered to be sold in Finland.

The product is considered sold in Suomi and VAT is charged on it if:

  • it is located on Finnish territory while being transported to the buyer;
  • the seller moves the goods across the European Union for sale in Suomi.

A tax deduction for purchases can be obtained if purchases were made to conduct business activities subject to value added tax. The VAT payer buyer must have an invoice confirming the purchase. There is no tax deduction if an entrepreneur makes acquisitions for activities that are not related to running a business subject to VAT.

The purchase of the following goods does not entitle you to deduct VAT:

  1. A property used by the VAT payer or his staff for housing and recreation.
  2. Goods and services used for representational purposes.
  3. Cars.

Almost all Finnish major retail outlets have introduced a tax-free trading system for tourists. Since the price of the goods includes VAT, the tourist is given the right to return part of what was spent when leaving the country. The minimum purchase amount in Suomi for tax free registration is 40 euros. Tax free refund is 10 – 16% of the total purchase amount. When leaving Finland, checks must be stamped at customs, otherwise you will not be able to receive a VAT refund. If everything is done correctly, then at the point of issue (at the border) you can receive a tax deduction in euros in cash or by bank transfer. For cashless payments you will need to fill out an application form.

Tax free does not apply to alcohol, tobacco, books and paid services.

VAT in Finland