Finnish VAT rates and VAT compliance
Finnish VAT rates
The Finnish government sets the rates for the standard, higher VAT rate, as well as for any reduced rates. The EU requires the minimum standard rate is above 15%, and sets some broad rules on which goods may be classified as the reduced or nil rates. Any non-resident VAT registered company must use the Finnish rates, and will be held to account for any shortfalls in VAT charged.
The current rates are:
Finnish VAT rates
|Rate||Type||Which goods or services|
|24%||Standard||All other taxable goods and services.|
|14%||Reduced||Foodstuffs (excluding live animals); some agricultural supplies; restaurants (excluding alcoholic beverages); some soft drinks; take away food; cut flowers and plants for food production.|
|10%||Reduced||Pharmaceutical products; domestic passenger transport; books (excluding e-books); newspapers and periodicals (sold on subscription); admission to cultural events and amusement parks; TV licence; writers and composers; hotel accommodation; admission to sports events; use of sports facilities; domestic transport.|
|0%||Zero||Printing services for publications of non-profitmaking organisations; intra-community and international transport; some taxation of gold ingots, bars and coins.|
Finnish VAT compliance
Once Finnish VAT registered, foreign companies must comply with the local rules on accounting, processing invoices and other measures. These include:
- Issuing invoices with the disclosure details outlined in the Finnish VAT Act.
- Correct invoicing of customers for goods or services in accordance with the Finnish time of supply VAT rules.
- Use of electronic invoices which must be in accordance with the latest Invoicing Directive.
- Up keep of VAT books and other records to support and VAT returns, Intrastat and ESL declaration
- Processing of credit notes and other corrections.
- Use of approved foreign currency rates.
What is the tax point for Finnish VAT?
The tax point (time of supply) rules in Finland determine when the VAT is due. It is then payable to the tax authorities 10 days after the VAT reporting period end (monthly or quarterly).
For most goods, it is the time of delivery or passage of title. For services, it is the completion of the service.
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