VAT GUIDE IN DENMARK
FINNISH VAT GUIDE FOR BUSINESSES
VAT in Finland is a general consumption tax levied on the sale of goods and services, as well as on imports. The Finnish VAT system is governed by national legislation aligned with the European Union VAT Directive, as Finland is an EU Member State. VAT is administered by the Finnish Tax Administration (Verohallinto), and businesses carrying out taxable activities in Finland may be required to register for VAT, charge VAT on their supplies, and submit regular VAT returns.
Finnish VAT law includes rules on registration thresholds, invoicing requirements, input tax deductions, and cross-border transactions. Both domestic and foreign businesses must comply with Finnish VAT obligations if they carry out taxable supplies in the country.
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VAT Rates
Zero rate: 0%
Who Needs to Register for VAT?
A taxable person in Finland is any individual or business that makes taxable supplies, intra-Community acquisitions, or distance sales in the course of business.
Starting 1 January 2025, the VAT registration threshold is EUR 20,000 for businesses established or with a fixed establishment in Finland.
Under the general rule for services, the place of supply is the location of the purchaser’s fixed establishment. If the purchaser has no fixed establishment, the place of supply is their domicile. If the supplier has no presence in Finland, they do not charge VAT; instead, the reverse-charge mechanism applies, and the purchaser accounts for VAT.
Certain services—like real estate, passenger transport, event organization, and catering—are subject to special place-of-supply rules that override the general rule.
A non-established business (one without a fixed establishment in Finland) is not required to register for VAT if all its taxable supplies in Finland are subject to the reverse-charge mechanism. If the reverse charge does not apply, the business must register. The EUR 20,000 threshold does not apply to non-established businesses.
When registering, foreign businesses must submit an explanatory form detailing their activities in Finland, which the tax authorities use to assess if a permanent establishment exists.
Even if not VAT-registered (due to reverse charge), non-established businesses involved in intra-Community trade must still notify the Finnish VAT authorities and report trade details monthly. The notification process is the same as for VAT registration.
EU-established businesses may benefit from the VAT registration threshold if their EU-wide turnover is below EUR 100,000 (current and previous year) and they follow specific procedures in their home country. This exemption does not apply if they’ve already registered for VAT by choice.
VAT Obligations
Once registered for VAT in Finland, businesses are required to issue VAT-compliant invoices for all taxable transactions including exports and intra-Community supplies. No invoice is required for advance payments related to intra-Community supplies. Invoices are also required for certain sales to private individuals, such as distance sales and new means of transport.
Invoices for intra-Community supplies of goods (per Article 138) or for services subject to reverse charge (Article 196) must be issued by the 15th of the following month at the latest.
Businesses must keep bookkeeping records (such as financial statements and tax invoices) for VAT purposes. These records can be stored outside Finland, provided the Finnish Tax Administration has real-time access and can review them without delay. Retention periods: Bookkeeping materials: 10 years Invoices: 6 years (13 years for real estate VAT-related documents)
Electronic archiving is permitted, including storage abroad, as long as real-time electronic access from Finland is maintained.
VAT Deadlines
In Finland, VAT returns are typically filed monthly, but small businesses may file quarterly or annually based on turnover. Returns must be submitted electronically through the MyTax portal.
Standard due date: 12th day of the second month after the tax period (e.g., January 2024 VAT is due by 12 March 2024).
For businesses using a calendar year as their tax period, the due date is 28th day of the second month following the year-end.
Payments must also be made by the applicable deadline using a specific reference number, in euros, to a designated tax account.
If there’s excess VAT after offsetting tax liabilities, it may be refunded or carried forward for future tax payments.
VAT Refund
Non-established businesses that are not registered for VAT in Finland can recover Finnish VAT, just like local VAT-registered businesses.
EU businesses can claim VAT refunds under EU Directive 2008/9, but only if they did not make taxable supplies in Finland during the refund period (except reverse-charge supplies). Claims must be filed electronically via their own country’s tax portal, and the Finnish authorities will process them.
Non-EU businesses can claim VAT refunds under the EU 13th Directive. Finland does not require reciprocity, meaning all non-EU countries are eligible.
Key rules for non-EU claims:
- Deadline: 30 June of the year following the year of supply.
- Languages accepted: Finnish, English, or Swedish.
- Minimum claim period: 3 consecutive months (same calendar year).
- Minimum claim amounts: EUR 400 for partial-year claims, EUR 50 for annual claims
- Claims must be submitted in writing and include required documentation.
Penalties for non-compliance
Late VAT registration:
No specific penalty, but late VAT returns or payments due to late registration may lead to penalties.
Late payment:
Interest of 11% per year (2024 rate) is charged from the day after the due date until payment.
Late VAT return filing:
EUR 3 per day, up to EUR 135.
If filed more than 45 days late: EUR 135 plus 2% of the VAT due (maximum of EUR 15,000 per tax type and period).
Intrastat:
Penalties range from EUR 10 to EUR 2,500 for late, missing, or incorrect returns.
ESL (EU Sales List):
EUR 100 if filed up to 45 days late,
EUR 200 if more than 45 days late.
Errors:
Punitive tax increase of typically 10% of unpaid tax.
May range between 15%–50%, depending on severity and recurrence.
Includes incorrect or missing returns or information.
Failure to update VAT registration details:
May lead to penalties, especially if it affects the VAT status. A 10% penal tax increase may apply.
VAT fraud:
Penalized under Finnish criminal law; offenses may result in criminal charges depending on the severity.
Common VAT Terms
- VAT – Arvonlisävero (ALV)
- Taxable person – Verovelvollinen
- Intra-Community acquisition – Yhteisöhankinta
- Distance sales – Etämyynti
- Reverse charge – Käännetty verovelvollisuus
- Fixed establishment – Kiinteä toimipaikka
- VAT registration – ALV-rekisteröinti
- Input tax – Vähennettävä vero
- Output tax – Suoritettava vero
- Deductible VAT – Vähennyskelpoinen arvonlisävero
- VAT return – Arvonlisäveroilmoitus
- Tax period – Verokausi
- MyTax – OmaVero
- ESL (EU Sales List) – Yhteisömyyntien ilmoitus
- Intrastat – Intrastat-ilmoitus
- Zero-rated supply – Nollaverokannan alainen myynti
- Exempt supply – Veroton myynti
- Tax point (time of supply) – Veron suorittamisajankohta
- VAT invoice – Arvonlisäverolasku
- Fiscal representative – Veroedustaja
- VAT ID – ALV-tunniste (FI + Y-tunnus)
- Standard VAT rate – Yleinen verokanta
- Reduced VAT rate – Alennettu verokanta
- Exemption threshold – Verottomuuden raja
- 13th Directive refund – 13. direktiivin palautusmenettely
- 8th Directive refund – 8. direktiivin palautusmenettely
