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Finland

 

News & Tips

Liability of VAT - Local reverse charge for scrap & waste [News]

Since 01/01/2015 a new local reverse charge is applicable for supplies of scrap metal and waste.


Late filing penalty [Tip]

When a periodic VAT return arrives late, a late filing penalty will be charged on the amount of tax that has been reported after the filing deadline. The rate is 15% per annum. However, minimum charge is € 5 for each type of tax reported late. The late penalty is charged even if no tax is due for the period in question.


 

DOING BUSINESS IN FINLAND [FI] - VAT GUIDE

 

General

VAT Directive

Finland

What is the structure of the VAT number?

Each individual VAT identification number shall have a prefix in accordance with ISO code 3166 - alpha 2 - by which the Member State may be identified.

 

Finnish VAT numbers have 10 characters [FI + 8 digits].

 

What is the local name of the tax?

 

Arvonlisavero [ALV]

 

VAT rate

VAT Directive

Finland

 VAT rates

Member States must apply a standard VAT rate [not lower than 15%] which must be the same for the supply of goods and for the supply of services.

Member States may apply either one or two reduced rates [not lower than 5%] only to supplies of goods or services as listed in the Annex III of the VAT Directive.

 

Finland applies a standard VAT rate of 24% and two reduced VAT rates: 10% and 14%.

 

See VAT rates applied in the EU.  

VAT return

VAT Directive

Finland

How is the tax period determined? 

The tax period shall be set by each Member State at one month, two months or three months.

Member States may, however, set different tax periods provided those ones do not exceed one year. 

Monthly/Quarterly/Yearly

Your company has to report its VAT position by filing periodical VAT returns on a monthly basis [standard tax period].

Quarterly reporting period can be opted for if your annual turnover of the preceding calendar year is between € 25.001 - € 50.000. Yearly reporting period is also possible provided your annual turnover does not exceed € 25.000. 

 

When should periodical VAT return be filed?

The VAT return shall be submitted by a deadline to be determined by Member States.

That deadline may not be more than two months after the end of each tax period.

 

Periodical VAT returns must be submitted electronically to Finnish VAT authorities before the 12th day of the second month [12 of N+2] following the tax period.

If the return is submitted on paper, the last day to submit the return is the 7th day of the second month following the tax period.

If reporting frequency is yearly, the due date is the last day of February of the following year.

 

Statement

VAT Directive

Finland

Annual recapitulative statement

Is this requirement laid down in the country and what is the filing deadline?

Member State may require taxable persons to submit a return in respect to all transactions carried out in the preceding year.

That return shall provide all the information necessary for any adjustments.

 

Your company is not required to file any summarizing annual VAT return in Finland.

Recapitulative statement of intra-EU supply of goods [European Sales Listing - ESL]

Are quarterly filings allowed by the country and what is the filing deadline?

The recapitulative statement shall be drawn up for each calendar month.

However, Member States, in accordance with the conditions and limits which they may lay down, may allow taxable persons to submit the recapitulative statement on each calendar quarter where the total quarterly amount of intra-EU supplies of goods does not exceed either in respect of the quarter concerned or of any of the previous four quarters the sum of € 50.000 or its equivalent in national currency.

The recapitulative statement shall be submitted within a period not exceeding one month.

 

The recapitulative Statement [ESL] must be drawn up for each calendar month and submitted to local VAT authorities by the 20th of the month after the end of the reporting period [month].

Filing the Statement on a quarterly basis is not possible.

Payment

VAT Directive

Finland

What is the payment deadline?

Any taxable person liable for the payment of the VAT must pay the net amount of the VAT when submitting the VAT return. 

Member States may, however, set a different date for payment of that amount.

 

 

The VAT due must be paid by filing deadline for the VAT return [12th day of the second month following the tax period]

Are interim payments required?

Member States may require interim payment to be made.

Interim payments are not required.

VAT refund

VAT Directive

Finland

VAT refund for companies VAT registered in the country.

Is any VAT credit automatically carried forward or refunded?

Where, for a given tax period, the amount of deductions exceeds the amount of VAT due, the Member States may, in accordance with conditions which they shall determine, either make a refund or carry the excess forward to the following period. However, Member States may refuse to refund or carry forward if the amount of excess is insignificant.

 

No carry-forward mechanism. A VAT credit is in general automatically refunded after the tax authorities have approved it.

Special measures for foreign companies

VAT Directive

Finland

Optional reverse charge [art. 194 of the VAT Directive] for non-resident supplier.

SUPPLY OF GOODS

Member States in which the VAT is due may provide that the person liable for the payment of VAT is the person to whom the goods or services are supplied where the transaction is carried out by a taxable person who is not established in the country in which the VAT is due.

Reverse charge is applicable to major supplies of goods [with exception for specific topics] carried out by non-established supplier in case the customer is VAT registered in Finland. In case the foreign supplier needs or has opted to register for VAT, reverse charge mechanism is no more applicable. 

 

Optional reverse charge [art. 194 of the VAT Directive] for non-resident provider. 

SUPPLY OF SERVICES

Member States in which the VAT is due may provide that the person liable for the payment of VAT is the person to whom the goods or services are supplied where the transaction is carried out by a taxable person who is not established in the country in which the VAT is due.

No [with some exceptions]

Have simplification measures been taken to avoid registration of the foreign company for the goods held on consignment in the country?

 

No

Do special arrangements apply to "call-off-stock"?

 

Yes

Special arrangements apply for call-off-stock. Foreign taxpayers are therefore not VAT required to be registered in Finland provided the conditions are met.

 

Triangulation can be applied when the middleman (B) is VAT registered [as a non-established company] for others supplies in the 3rd country [Member State of destination]?  

Triangulation regime can be applied even if the middleman B is VAT registered as a non-established company in Finland [Member State C].  Furthermore, triangulation scheme is not applicable in chain transaction  involving four or even more parties.

 

VAT on import

VAT Directive

Finland

VAT warehousing regime

Member States may exempt the importation of goods and the supply of goods which are intended to be placed under warehousing arrangements other than customs warehousing.

 

Yes

Finland has introduced VAT warehousing regime.

VAT on importation – Postponed accounting via the VAT return.

Is it possible for a company to pay the import VAT via the periodical VAT return?

Member States may provide that VAT on importation does not need to be paid at the time of importation on condition that it is entered as such in the VAT return  to be submitted.

 

No

Postponed accounting via the VAT return is not possible in Finland. VAT on import must be paid immediately.  Import VAT needs to be paid to the customs authorities upon importation [immediate payment]. A deferred payment for VAT and customs [similar delay] is however possible under specific conditions.

 

Miscellaneous

VAT Directive

Finland

Intrastat Threshold  

Dispatches: € 500,000

Arrivals : € 550,000 

 

Distance Sales - Threshold  

 € 35,000

See various thresholds applied in the EU [last update :01/03/2014].

 

Ministry of Finance   website

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