VAT compliance and reporting rules in Finland 2024
Below is summary of the major rules provided under Finnish VAT rules (Arvonlisäverolaki (VAT law); Arvonlisäveroasetus (VAT decree)), plus adoption of EU VAT Directive provisions. Check our country VAT guides for other jurisdictions.
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Finland VAT country guide
| Highlights | Local term | Arvonlisävero (ALV) |
| VAT Rates - standard | 25.5% since Sept 2024 | |
| Rates news | VAT rise to 25.5% during 2024 | |
| VAT Rates - reduced | 14%; 10%; 0% | |
| VAT number format | FI 12345678 | |
| Registration threshold | €15,000. Nil for non-residents; €10,000 for pan-EU digital services and goods OSS return. Intra-community acquisitions €10,000. | |
| VAT Group | Yes, voluntary for exempt financial services. | |
| VAT recovery foreign businesses | Yes | |
| Fiscal Representative | Yes, for most non-EU established businesses | |
| Currency | Euro €, January 1999 | |
| Administration | Introduction | VAT was introduced in 1994. Finland joined the European Union (EU) in 1995 |
| VAT laws | Arvonlisäverolaki (VAT law); Arvonlisäveroasetus (VAT decree); Also EU VAT Directive which takes supremacy as part of EU membership | |
| Tax Authorities | Verohallinto (Tax Administration), with regional offices. Part of Ministry of Finance. Helsinki office handles non-residents | |
| VAT Rates | Standard rate | 25.5% since Sept 2024 |
| Rates news | VAT rise to 25.5% during 2024 | |
| Reduced rates | 14%: Foodstuffs; books; public trans; cinema; pharma; agri supplies; restaurants and catering; soft drinks; take away food; cut flowers and plants for food production; 10% Books Hotel services Public transport Pharmaceuticals; Entrance to cultural & sporting events Film screenings Royalties for television and public radio activities | |
| Zero-rated | Intra-community passenger travel by air and sea; Exports and intra-community supplies of goods; gold to central banks; services related to vessels and aircraft; some journal publications | |
| Exempt | Education; financial services; health, hospital, and social welfare; public postal; letting immovable property; betting and gambling; welfare services; international passenger transport; certain copyrights | |
| Scope of VAT | Scope of VAT | Provision of domestic taxable goods and services; EU imports; intra-community acquisitions; Distance selling of goods B2C (OSS or IOSS); receipt of services or goods via the reverse charge |
| Time of supply | Goods & Services (general rule) | At the time of delivery for goods and provision for services. Whilst invoice date may be used in accounting records, this should be adjusted to the general rule at year end if materially different date. Prepayments or advances should use date of cash received. |
| Reverse Charge | General rules apply | |
| Continuous Services | Time of payment due | |
| Imports | At time of clearance into Finland by Customs. Payment may be avoided by use of Postponed Accounting (see separate) | |
| Goods on approval and return | General rules apply | |
| Registration | VAT registration threshold | €15,000. Note: relief of VAT due for turnover between this amount and €30,000 per annum. Nil for non-residents; €10,000 for pan-EU digital services and goods OSS return. Intra-community acquisitions €10,000. |
| Voluntary VAT registration | Yes, voluntary. Available to non-residents | |
| VAT number format | FI 12345678 (FI only on businesses granted intra-community or import/export rights) | |
| VAT Group | Two or more Finnish resident businesses may form a VAT group, sharing the same VAT identity and a single, consolidated VAT return. This is undertaken by an appointed member of the group. Members should have close financial, economic, shareholding or management control links. Intra-group transactions are VAT exempted. It may only be applied in the financial services sector - or the controlling member of the group should be. They share VAT on a joint and several liability-basis. Non Finish residents may not join - unless a fixed establishment. | |
| Non-residents | Permitted, but no VAT registration thresholds. There is extensive use of the reverse charge in Finland, limiting the requirements to register. | |
| Fiscal Representative | Required for non-EU established businesses. This does not include Norway or the UK which have mutual assistance directives with the EU. The representative must be Finnish resident and approved by the Finnish tax office. They are not jointly and severally liable for their client's VAT. The tax office retains the right to request a bank guarantee or similar from non-EU taxpayers. | |
| Digital Services | Finland participates in the EU single One Stop Shop (OSS) VAT return for digital, telecoms and broadcast services. This was formerly the MOSS regime until 30 June 2021 | |
| Pre VAT registration costs | Allowed where directly linked to the business. Such costs may be included in the first VAT return. | |
| VAT Invoices | Issuance | No time limits. Intra-community supplies must be invoiced by the 15th of the following month. |
| Content | Date; unique sequential invoice number; name and address of supplier and customer; Customer VAT number for intra-community supplies or reverse charge; date of supply or advance payment if different from invoice date; Description, quantity or units etc of supply of goods or services; price per unit; taxable amount; VAT charged; rate (broken out if supplies at different rates); total; explanation if zero-rated supply. | |
| E-invoices | Finland e-invoice obligations | |
| Simplified invoices | Yes, where not exceeding €400. Retail transactions unless customer requests. Restaurants and cafes etc. | |
| Self-billing | Permitted by mutual agreement. The supplier must approve each invoice with record of having done so. | |
| Retention of invoices | Six years after the end of the accounting year of the transaction. Records may be stored outside of Finland, but with rapid access for audits etc. | |
| FX rules | Foreign currencies may be used. But the amount of VAT due should be shown in €, converted at European Central Bank or commercial bank date at tax point day. | |
| Invoice corrections | Credit or debit notes may be used to correct invoices, but should include original invoice number and reason for change. Can be applied through next VAT return. | |
| Compliance | Right to deduct | Excluded: employee to-work travel expenses; passenger cars and related expense including fuel; business entertainment; staff premises for private use |
| Call-off stock | Following the EU's 2020 Quick Fix harmonisation reforms, stock may be transferred from an EU state to an customer location/warehouse in Finland without triggering a VAT registration and supply for a non-Finnish supplier. Title has not passed until the customer takes the goods for production and sale. At which time a zero-rated transaction may be effected. This must happen within 12 months of the original movement | |
| Reverse Charge - B2B | Aside from B2B cross-border supply of services, the reverse charge is applied where a non-resident supplies goods to a business customer in Finland. If the business is non-Finnish with a permanent establishment and VAT registration, reverse charge should not be applied. The reverse charge should also be used by non-residents for: admission to cultural, exhibitions or conferences; passenger transport. The domestic reverse charge applies to: construction; natural gas and electricity; carbon trading certificates; scrap metals | |
| Cash discounts | Early payment discounts must be applied in proportion to the VAT charged on the original invoice. A correction to the VAT return amounts should be sufficient without the need to raise an adjusting credit note. | |
| Bad debt relief | Permitted where the supplier can show evidence that the debt is irrecoverable. This may include notice of insolvency or failed legal action to recover the VAT. | |
| Import VAT deferment | Yes, importer may use their next VAT return to report import VAT and claim deduction, thus avoiding cash payment. Importers may apply for 1-month VAT and customs duties credit account. Exemption is allowed in the case of an import and immediate (30 days) intra-community supply. This requires the importer to hold its customer's valid EU VAT number. | |
| VAT warehouse | Finland operates VAT and customs exempt or bonded warehouses. Goods may be traded within these authorised locations VAT-free. Only certain raw materials (oil, grain, food grains etc may benefit from this simplification, and is governed by EU VAT Directive Annex V. Services provided within warehouses are generally VAT exempt. | |
| Supply & install | When non-residents provide install of goods services in Finland, the reverse charge applies and the customer is responsible for the VAT liability. However, if the work exceeds nine-months, a VAT registration may be required as considered a fixed establishment. | |
| Use and enjoyment services | Finland only applies the use and enjoyment VAT registration obligations for: telecoms, electronic and broadcast; natural gas and electricity. | |
| Capital goods adjustment period | In year of acquisition; special rules for real estate extending to 10 years | |
| Non-residents VAT recovery | EU businesses may apply for Finnish VAT reclaims through the electronic portal of the tax authorities of their company of residency (8th Directive). Quarterly claims above €400 permitted, with final claim above €50 by 30 Sept of following year. Non-EU businesses must submit a paper-reclaim with supporting invoices via the Finnish authorities directly (13th Directive). Finland does not require a reciprocal agreement with the country of residence of the claimant. Non-EU businesses do not have to appoint an Finnish resident Fiscal Representative for the reclaim process | |
| VAT on Digital Services | Finland follows the EU VAT on digital services regime, introduced in 2015. This includes participation in the One-Stop-Shop (OSS) single EU VAT return (formerly MOSS until 30 June 2021) | |
| Live events | VAT registration required of a non-resident as reverse charge may not be used. | |
| Distance selling threshold for goods | Nil. Following the EU ecommerce VAT package reforms from 1 July 2021, local Finnish VAT must be charged on all sales by non-Finnish EU e-commerce sellers shipping from within the EU. Imported distance sales not exceeding €150 liable to Finnish sales VAT with IOSS return option | |
| Cash accounting scheme | For business with turnover not exceeding €500,000 per annum. May not be used for intra-community supplies or import/export. | |
| VAT registered cash tills | N/a | |
| Statute of limitations | Three years after the end of the accounting year. | |
| Other | N/a | |
| VAT Returns | Frequency | Monthly. Quarterly if turnover does not exceed €100,000 per annum. Annual if do not exceed €30,000 per annum. Non-residents may only file monthly. |
| Filing method | Electronic only via OMAVERO and Suomi.fi portal | |
| Deadlines (inc payments) | 12th of the second month following the reporting period for return and payment of any VAT due. Annual filers due by end of February of following year. | |
| VAT credits | Automatically provided following submission of VAT return with a credit. This may though trigger VAT audit. Resident businesses will have any VAT credit first set off against other taxes due. | |
| Corrections | Corrections below €500 via the next VAT return. Above this amount will require a corrective VAT return. | |
| Non-residents | No material differences. Most non-EU businesses will need a Fiscal Representative. | |
| Other filings | Monthly European Sales Listing for goods and services supplies without any threshold by 20th of month following. Intrastat monthly by the 10th of the following month for supply of goods above threshold: dispatches: €800k; arrivals: €800k. | |
| SAF-T | N/a | |
| Penalties & interest | €3 per day fine for unfiled submission; rising to €135 fine and 2% VAT penalty after 45 days late. Max fine of €15,000 per missed return. Late VAT payment interest of 7%. For miss declared VAT due, fine of 10% which may rise to up to 50% depending on reason for incorrect reporting. | |
| B2C Distance Selling returns | Finland participates in the One-Stop-Shop OSS pan-EU VAT return for distance selling, introduced in July 2021. |
