The new e-commerce rules replace the old distance sales regime, which was in effect until June 30, 2021.
New distance sales rules under Article 63a, as well as related measures, took effect on July 1, 2021. This replicates Article 33 of the EU VAT Directive, as revised by Council Directive (EU) 2017/2455 of December 5, 2017 (the “VAT e-commerce rules”).
Read more about E-commerce and the supply of services in Finland in our comprehensive guide below.
Distance sales refer to the delivery of goods from outside the European Union (EU) into an EU member state to a recipient who is not registered for VAT or is not subject to VAT. There are two types of intra-Community distance sales: (1) those of products dispatched or carried from an EU member state other than the member state of destination, and (2) those of goods imported from third countries. The Finnish VAT Act contains specific rules for each type of distance sale.
Article 63a of the VAT Act states that the place of supply or delivery of low-value products imported from outside the EU and delivered directly to a Member State of destination will be that Member State, provided that VAT on the items is declared under the One-Stop-Shop, as detailed below.
The place where the goods are located at the time of delivery, when the transport of the goods to the customer ends is the site of supply of distance sales of goods imported from outside the EU into a Member State.
The point of supply for intra-Community distance sales of products is usually the location of the goods at the time the dispatch or transportation of the goods to the client is completed.
The place of supply of intra-Community distance sales is, however, the Member State where the supply commences (unless an election to the contrary is made) under a de minimis exception in Article 69m of the VAT Act if:
A special One Stop Shop (OSS) arrangement is in place to make reporting on distance sales easier, allowing providers from both inside and outside the EU to account for distance sales in a single Member State of registration. If certain requirements are met, this plan also applies to cross-border services that meet the criteria.
In addition, on or after July 1, 2021, electronic marketplace operators assume liability for low-value distance sales effected through them from outside the EU if certain conditions are met. If the electronic marketplace assumes liability, the supplier is not required to register for VAT.
GVC can help you with your OSS/IOSS requirements. Schedule a call now with one of our VAT experts.
Last Updated: 20/12/2023
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