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VAT Expert in Europe

Selling in Europe with Incoterm DDP. Eurofiscalis handle your VAT registration & declarations | I want to learn more

Selling in Europe with Incoterm DDP.

Eurofiscalis handle your VAT registration & declarations

I want to learn more

Not long from now, there will be some changes to the VAT in Finland. We are providing you with the information you need now so that you can enter the new year well prepared!

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Changes for the Finnish VAT

The changes for VAT in Finland will not take effect immediately, but it is reported that to come into force September 1st 2024.

 

The Finnish government has decided to increase the general VAT rate by 1.5% in the framework crisis in spring 2024. Finland’s new general VAT rate will therefore be 25.5%

 

The reduced VAT rates will not be changed. These will therefore remain at the previous levels of 10% and 14%. However, the government program has already outlined that the 10 percent rate will be increased to 14 percent, for example for books, medicines, and fitness services.

 

Additionally, sweets will be moved from the reduced food rate to the general 25.5% rate.  

Comment from our VAT-expert Linda:

“This is an interesting development to stimulate/change consumption habits in the country, which may have repercussions on public health and healthier choices in everyday life.”
Linda Eikelenboom
VAT-expert

Overview of Finnish Tax Rates

Since 2013, Finland has maintained a standard VAT rate of 24%, making it the fifth highest among EU member states.

In addition, Finland has two reduced rates of 10% and 14% for specific goods and services.

 

Certain goods, such as export deliveries, benefit from a VAT rate of 0%, where no tax is imposed on the sale itself, but sellers can reclaim VAT on purchases of production inputs.

Finland VAT rates:

Finland currently has a standard VAT rate of 24%. This applies to most goods and services.

Finland also has an additional rate of 14% which applies to food items and restaurant and catering services.

Finland’s reduced rate is currently 10%. This applies to:

  • Books
  • Newspapers and periodicals
  • Electronic books, newspapers, and periodicals
  • Medicines
  • Sports and fitness services
  • Passenger transport
  • Accommodation services
  • TV and broadcasting fees
  • Cultural and entertainment events
  • Sale of artworks by the artist and all imports of artworks
  • Copyright received by copyright organizations
  • Fees for public performances
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Registration for Finnish VAT

A company that sells goods or services as part of its business is usually required to pay VAT and must be registered in the VAT register. In some cases, for example if the company’s turnover is small, VAT registration is voluntary.

 

Additionally, some operations are exempt from VAT. A company that performs VAT-exempt operations cannot be registered in the VAT register.

You can register for VAT as soon as you start making purchases for the purposes of your VAT-liable operations. If you register voluntarily, you can do so when you start your business or later.

VAT refund in Finland

As a taxpayer with VAT-liable operations, you have the opportunity to deduct the VAT included in the goods and services you purchase from others. To be able to do this, the purchase must be related to your business operations that are subject to VAT.

If you also use the purchased goods or services for other purposes, your right to a deduction will be limited to the portion used for VAT purposes.

However, it is important that the deduction is not subject to other restrictions established in the VAT law.

For example, you cannot deduct the VAT if a self-employed person or employees in the company use the goods and services for private purposes or for an activity in the company where VAT cannot be deducted.

Example

Let’s say a person runs a catering business that offers both VAT-liable services, such as catering for corporate events, and VAT-exempt services, such as voluntary catering at charity events. The person decides to buy a new computer to manage their business. The computer will be used for the administration of both VAT-liable and VAT-exempt activities, as well as for personal use. The person can then only claim a VAT deduction for the computer to the extent that it is used for VAT-liable activities. By keeping a precise record of the computer’s use, such as through a log, the person can document how much of the use is related to VAT-liable activities and thus how much VAT deduction they are entitled to.

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