Key takeaways
- The Finnish VAT landscape includes a 25.5% standard rate and two reduced rates, with businesses required to understand these rates for compliance.
- Businesses must register for VAT if taxable turnover exceeds €20,000. Companies distance selling in Finland must register once their taxable turnover exceeds €10,000.
- International consumer sales up to €150 can be registered under the IOSS scheme. Intrastat declarations are essential for EU trading activities.
In short: The standard VAT rate in Finland is 25.5%, with reduced rates of 13.5% and 10%. Finnish businesses must register for VAT once turnover exceeds €20,000. EU sellers distance selling to Finland must charge Finnish VAT above €10,000 of EU-wide sales. VAT returns are usually due by the 12th day of the second month after the period.
You need to understand the Finnish VAT system, including the VAT rate in Finland, to stay compliant. This guide covers VAT rates, registration, compliance and invoicing in Finland. It also explains the unique parts of Finnish VAT that businesses should know. For a closer look, see VAT Compliance and VAT Rates Luxembourg.
What are the VAT rates in Finland?
Finland has a standard VAT rate of 25.5% and two reduced rates. The reduced rates apply to specific goods and services, as well as sales to non-profit corporations. The Finnish VAT Act sets these rates to suit the wide range of products and services on the market.
Businesses must know these Finnish VAT rates to comply with Finnish tax law.
Standard VAT rate
The standard VAT rate in Finland is 25.5%, and it applies to most goods and services. This rate is well above the EU average and one of the highest standard VAT rates in the EU. You can also read Finnish Government Confirms VAT Rate and VAT Threshold Changes.
Reduced VAT rates
Finland has two reduced VAT rates:
- The 13.5% reduced rate applies to groceries, takeaway food, and restaurant and catering services, excluding alcoholic beverages and tobacco products. It also applies to books, pharmaceuticals, accommodation services, and passenger transport.
- The 10% reduced rate applies to newspapers.
A 0% rate also applies to certain goods and services, such as exports and international transport.
VAT Exemptions
VAT exemptions in Finland usually cover financial and insurance services, healthcare and education. These exemptions help keep essential services affordable and accessible.
What is the VAT registration threshold in Finland?
The VAT registration threshold in Finland is €20,000 for businesses based in the country. Companies with taxable turnover above this amount must register for VAT. Read more in our guide: Amendments to Bulgarian VAT Legislation.
Foreign businesses that distance sell to customers in Finland must register for VAT once their annual sales exceed €10,000. They must then charge Finnish VAT on their sales to Finnish customers.
To register, you submit a notification through the electronic tax administration service MyTax.
Businesses can also register for VAT in Finland voluntarily, even if their taxable turnover is below the threshold. Voluntary registration helps businesses that often buy goods or services subject to VAT. It lets them claim input VAT on these purchases.
What are the VAT compliance and invoicing rules in Finland?
Businesses in Finland must follow Finnish VAT compliance and invoicing rules to avoid fines, penalties or legal trouble. In Finland, a VAT invoice is the official record of the tax a business has charged and collected. It is also the evidence of the tax the business must pay to the government. For a full country overview, see our Finland VAT manual.
You must issue VAT invoices for all taxable supplies. The VAT identification number must be clearly shown on all invoices you issue to customers. The Finnish Tax Administration sets the exact details a Finnish VAT invoice must include.
What must a Finnish VAT invoice include?
A Finnish VAT invoice must show the VAT charged and other key details for every taxable supply. VAT-registered businesses must issue one for all taxable supplies. VAT invoices in Finland must contain the following information:
- The word 'Lasku' (invoice) clearly marked on the document.
- A unique, sequential invoice number.
- The seller's and buyer's full legal names and addresses.
- The seller's VAT identification number.
- The date of issuance of the invoice.
- A description of the goods or services provided, including quantity, unit price, and the applicable VAT rate.
- The total amount due, including the VAT amount, broken down by VAT rate.
- If the invoice amount is in a foreign currency, the exchange rate used.
- If applicable, information about any VAT-exempt transactions or reverse charge mechanisms.
- The date of supply or the date of advance payment (if different from the invoice date).
Finland encourages electronic invoicing. E-invoices must meet specific requirements and be sent in a structured format.
How long must you keep VAT records in Finland?
Under Finnish VAT rules, businesses must keep records of all transactions for 10 years. This includes invoices, receipts and other relevant documents. Accurate records are a basic part of VAT compliance, and they help you report your VAT liabilities correctly.
When are VAT returns due in Finland?
Monthly and quarterly VAT returns in Finland are due by the 12th day of the second month after the end of the tax period. Yearly returns are due by the end of February of the following year. Whether you file monthly, quarterly or yearly depends on your turnover and VAT registration status.
Filing on time is vital to stay compliant and avoid penalties. Late VAT returns can lead to a penalty of €3 per day, up to a maximum of €135, if the delay is no more than 45 days.
You can submit VAT returns and other declarations online through the MyTax portal. MyTax is an e-service from the Tax Administration that lets individuals and businesses manage their Finnish tax matters online. To file VAT returns and EU VAT Recapitulative Statements, you log in to MyTax with online banking codes, a mobile certificate or the Finnish Authenticator app. Paper forms are no longer accepted.
Do you need a fiscal representative in Finland?
Yes, if your company is not established in the EU but carries out taxable activities in Finland. These companies must appoint a fiscal representative for VAT registration.
A fiscal representative in Finland is a person or entity that a non-EU company appoints to meet its duties with the Finnish tax authorities. The fiscal representative acts as the foreign trader's local agent. Their tasks include VAT registration, checking invoices and documents, and dealing with the tax authorities for the company.
Fiscal representatives must be based in Finland and approved by the Regional Tax Office.
How does the EU One-Stop-Shop (OSS) work in Finland?
The One-Stop-Shop (OSS) lets businesses report VAT on international consumer sales in Finland in one central place. It was introduced in July 2021. With the OSS, you register in one EU country and report all your pan-EU distance sales on a single VAT return.
This makes VAT reporting simpler. The OSS also saves costs, eases VAT admin, and improves the customer experience with clear prices and cost certainty.
What is IOSS for international consumer sales?
The Import One-Stop-Shop (IOSS) lets businesses outside the EU register for a single VAT number in one EU member state. They can then collect and pay VAT on low-value goods (under €150) sold to EU consumers. The IOSS was also introduced in July 2021.
The IOSS speeds up customs and cuts delays and costs. It also makes buying online easier for consumers while keeping VAT compliance on track.
Intrastat Declarations
Intrastat declarations are required for businesses trading within the EU. They collect data on intra-EU trade, which helps produce trade statistics.
In Finland, Intrastat declarations are due by the 10th working day of the month after the reporting period. The Intrastat threshold is €800,000 for dispatches. Since 2026, Finland no longer requires Intrastat declarations for arrivals.
Conclusion
This guide should give you a clearer view of VAT rates, registration, compliance and invoicing in Finland. Stay informed and up to date on Finnish VAT. That way, your business can stay compliant, avoid fines and penalties, and thrive in the Finnish market.
Do you need help with your VAT compliance? Book a free call with one of our VAT experts to find bespoke solutions for your business, optimize your VAT costs, and reach millions of new potential customers.
How Taxually handles this
Taxually’s CrossTax handles VAT registration, VAT, OSS and IOSS returns and fiscal representation in the countries you sell into, and checks your sales data against 250+ validation rules before each filing. OneTax then pays every tax authority with one bulk payment in your chosen currency.
Related guides
Frequently asked questions
Is Finland VAT 24%?
No. Since 1 September 2024, Finland's standard VAT rate is 25.5%, with some goods and services subject to 13.5% and 10% reduced rates.
Is Finland part of the EU for VAT?
Finland is a member of the EU and must adhere to EU VAT Directives, which includes setting the minimum standard VAT rate at 15%. Finland is part of the EU's single market economy and has to implement its rules for Finnish VAT registrations, returns, Intrastat, compliance, and related declarations.
How can I register for VAT in Finland?
Businesses can register for VAT in Finland via MyTax, the electronic tax administration service.
