VAT in Finland

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Finland VAT

Finland comes under the EU VAT rules and is part of the EU single market economy. VAT Directives are issued by the EU which lay out the principles of the VAT regime to be adopted by the member states, including Finland. These Directives take precedence over the local legislation.

Finland VAT law

Finland introduced VAT, known as Arvonlisävero (shortened ALV) in 1994.  It is administered by Verohallinto, the Finnish Tax Administration.

Finnish VAT registration

Foreign companies may register for VAT in Finland without the need to form a local company – this is known as non-resident VAT trading. There is no VAT threshold in Finland for the registration of foreign traders and a foreign business must register for VAT from the first day of starting activities in Finland. This also applies where foreign businesses execute intra-community acquisitions, as these may trigger the need to VAT register.

Non-EU companies may need to appoint a local fiscal representative in some cases.

There are strict rules on the situations where a registration is permitted. Common scenarios which require a Finnish VAT registration include:

  • importing goods into the EU via Finland
  • buying and selling goods within Finland
  • holding goods in a warehouse in Finland as stock
  • selling goods from Finland to other EU countries
  • acquiring goods from other EU countries into Finland
  • distance selling to private individuals in Finland from another EU country, e.g. internet retailing.

Registering for Finnish VAT generally takes around four weeks from the date when the application has been submitted, although this can vary.

Finland VAT compliance

There are detailed rules controlling the recording and processing of Finnish transactions. These include guidelines on:

  • Finnish invoice requirements
  • foreign currency invoicing and reporting
  • correcting errors in previous returns
  • what records must be kept.

Finnish VAT rates

Since 1 January 2013 the standard VAT rate in Finland is 24%. There are reduced rates of 14% and 10% for food, restaurant services, books, pharmaceutical products and other goods and services.

There are variations to the rates above, including exempt and zero-rated taxable supplies.

Finnish VAT returns

Companies with a Finnish VAT number must submit periodic VAT returns detailing all taxable supplies (sales) and inputs (purchases). Returns are submitted monthly and are due one month and 12 days from the end of the reporting period.

Returns can be filed electronically or by paper return forms.

Finland - Intrastat and EC Sales Lists

In addition to VAT returns, companies may be required to submit extra statistical information. The Finnish Intrastat system (or supplementary statistical declaration) requires a monthly return listing all movement of goods between Finland and other EU-member states. There are annual thresholds for these filings.

The EC sales list  return contains information on the VAT numbers of EU customers and the values of sales. EC sales lists  are submitted on a monthly basis but only for months with applicable activity.

Finnish VAT refunds

If a foreign company is not making taxable supplies in Finland but is incurring Finnish VAT on local goods or services, then Finnish VAT may recovered through a VAT reclaim.

View more information on other countries, or find out more about VAT.