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Value added tax 10min

Value added tax (VAT in short, ALV in Finnish) is a tax, that is paid in services or products price as added value. In the end the end-consumer will pay the tax. In example, when a consumer buys a new phone VAT will be specified in the receipt. Companies in Finland pay their Value added taxes to the state monthly, quarterly or yearly. There are some business operations that are entirely exempt from VAT, like healthcare and medical services. There are different rates for VAT and it can be between 0-24 percent. The general rate is 24 percent in Finland.

Value added tax rates:

24%

  • Most services and products

14%

  • Groceries
  • Food
  • Restaurant and catering services

Note that the reduced VAT rate of 14% is not applicable to alcohol and tobacco products

10%

  • Books
  • Newspapers and periodicals
  • Pharmaceutical products
  • Physical exercise services
  • Film screenings
  • Entrance fees to cultural and entertainment events
  • Passenger transports
  • Accommodation services
  • Royalties for television and public radio activities

0%

  • The sale, rental and chartering of VAT-exempt vessels and work performed on such vessels
  • Tax-exempt sales of member's magazines and advertisements to non-profit corporations
  • Tax-exempt sales relating to warehousing procedures
  • Exports outside the EU
  • Sales of goods within the EU to VAT-liable buyers
  • Other tax-exempt sales of goods and services relating to international trade, such as tax-exempt sales to diplomats and international organisations

If your company's turnover for the accounting period of 12 months is less than 10 000 euros, you are not under the obligation to register for VAT or if you are registered, you will be reimbursed for all of the VAT you have paid. If your turnover is less than 30 000 euros for the accounting period of 12 months you are entitled for VAT relief and will get reimbursed for part of the VAT you have paid.

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