Finland VAT (Arvonlisävero) Guide for Businesses: Rates, Registration & Compliance

Finland VAT (Arvonlisävero)

Finland’s Value Added Tax (VAT), known locally as Arvonlisävero (ALV), is a key part of the country’s tax system. Fully aligned with European Union VAT rules, Finland’s VAT applies to most goods and services supplied domestically and cross-border.

This guide provides businesses, both domestic and international, with essential information on Finland’s VAT regulations, rates, and compliance in 2025.

🔍 What is VAT in Finland?

VAT is a consumption tax charged at each step of the supply chain, ultimately paid by the final consumer. Finnish businesses registered for VAT collect tax on sales and can deduct VAT paid on business expenses.

The Finnish Tax Administration (Verohallinto) manages VAT collection and enforcement.

📊 Finland VAT Rates

Finland applies three main VAT rates depending on the goods or services:

Standard Rate – 24%

Most goods and services, including electronics, vehicles, and consulting.

Reduced Rate – 14%

Applies to food, restaurant and catering services, and animal feed.

Reduced Rate – 10%

For essential items such as books, medicines, passenger transport, accommodation, and cultural events.

📝 Who Must Register for VAT in Finland?

Domestic Businesses:

Must register if annual taxable turnover exceeds €15,000.

Foreign Businesses:

Required to register if supplying goods or services in Finland, or distance selling to Finnish consumers above the EU threshold (€10,000).

Voluntary registration is possible below the threshold to reclaim input VAT.

🔢 Finland VAT Number Format

Finnish VAT numbers start with the prefix “FI” followed by 8 digits.

• Example: FI12345678

This number must be included on invoices and VAT returns.

🧾 VAT Invoice Requirements

Invoices in Finland must include:

• Invoice number and date
• Supplier and customer details (names, addresses)
• Supplier’s VAT number
• Description of goods or services
• Net amount, VAT rate, and VAT amount
• Total invoice value
• Delivery date (if different)
• Customer’s VAT number for B2B intra-EU sales

Electronic invoices are widely accepted.

💡 VAT Calculation Example

Selling goods for €1,000 at 24% VAT:

• VAT = €240
• Total amount = €1,240

The seller collects €1,240 and remits €240 to the tax authorities.

🗓️ VAT Filing and Payment in Finland

• Filing periods depend on turnover: monthly, quarterly, or annually.
• VAT returns are filed electronically via the Finnish Tax Administration portal.
• Returns and payments must be submitted on time to avoid penalties.

🌍 Cross-Border VAT Rules

• Intra-EU B2B Sales: Zero-rated with valid VAT numbers; reported in EC Sales List.
• Intra-EU B2C Sales: Distance selling threshold applies (€10,000). OSS scheme available for EU-wide reporting.
• Imports: Import VAT is payable, but reclaimable if registered.
• Exports: Zero-rated with proper export documentation.

❌ VAT-Exempt Supplies

Exemptions include healthcare, education, financial services, and rental of residential property. Businesses solely engaged in exempt activities cannot reclaim VAT.

🌐 VAT Refunds for Foreign Businesses

• EU businesses claim refunds through their own tax authority’s portal.
• Non-EU businesses must apply directly to Finnish tax authorities, often appointing a fiscal representative.

✅ Compliance Tips for Finland VAT

• Register promptly when thresholds are met
• Issue compliant VAT invoices
• Submit returns and payments on schedule
• Maintain VAT records for at least 6 years
• Verify EU VAT numbers using VIES
• Use OSS for EU-wide distance sales

📌 Final Thoughts

Finland’s VAT system is straightforward but requires attention to registration thresholds and filing deadlines. Understanding local VAT obligations will help your business avoid fines and operate efficiently.

Use our Finland VAT Calculator for accurate, real-time VAT calculations tailored to Finnish rules.