Country Guide: Finland
Looking to expand your e-commerce business to Finland, then look no further, here is AVASK's guide to VAT in Finland:
VAT in Finland
Finland is a member of the European Union (EU) and draws up its tax rules according to the laws or directives issued from Brussels by the EU. The current VAT directive applies to all 27 member states of the European Union, and it governs the rules on VAT compliance, and in some part, covers the setting of VAT rates.
As an EU member state, Finland is obliged to implement the VAT directives, which provides guidance on VAT. Where there is a conflict, the European Union’s directive takes precedence. Finland is a member of the European single market economy and uses the Euro (€) as its currency. In Finland VAT is known as: Arvonlisavero, or ALV.
VAT registration in Finland
Both EU and non-EU businesses may trade in Finland without establishing a local presence. This is known as non-resident VAT trading. There is no VAT threshold in Finland for the registration of non-resident traders, but you will need one to record transactions and your Finland customers will want proof that you have obtained one.
There are strict rules on the situations where VAT registration is permitted. Common scenarios that require Finnish VAT registration include:
- Importing goods into Finland;
- Organising live events, conferences, etc. in Finland;
- Holding goods in a warehouse in Finland as stock for resale;
- Buying goods within Finland that are subsequently re-sold in-country;
- Selling goods from Finland to other EU member states;
- Distance-selling to private individuals in Finland, e.g. internet retailing or trading through an e-commerce platform.
Registering for Finnish VAT generally takes up-to four weeks once all documentation has been submitted to the tax authority, but this varies from seller to seller and will depend on the specifics of an individual company.
Finnish VAT compliance
There are detailed rules controlling the recording and processing of Finnish transactions for VAT purposes. This includes guidelines on:
- Finnish invoice requirements;
- When to issue a Finnish tax invoice;
- Foreign currency reporting;
- Credit notes and corrections;
- Correcting entries from prior returns;
- Which accounting records must be maintained.
VAT rates in Finland
|VAT Rate||% Rate|
Country Profile: Finland
Finland E-commerce facts:
|Number of e-commerce users:||4.7 million
|Revenue in e-commerce market:||£2.34 billion|
|Estimated market growth:||5.6% to £2.91 billion by 2024|
Finnish thresholds and additional summary:
|Distance Selling Threshold (DST)||€35,000|
|VAT number format:||FI 12345678|
VAT return period:
|VAT return deadline||Varies - depending on filing frequency|
|Annual VAT filing deadline:||Not required, unless filing annually|
|EC sales lists reporting||Monthly|