VAT Registration in Finland
In Finland, a business is required to register for VAT from the date it becomes obligated to register or requests voluntary registration, rather than from the date of application or receipt of the VAT registration number. The process of applying for VAT registration in Finland involves using the same form that is used for registering a company with the Finnish Trade Register.
Moreover, it is possible to submit the VAT registration application simultaneously with the registration application for the company.
Register for VAT in Finland
Individuals must register for VAT if the value of their Finnish taxable supplies during the 12-month accounting period (or equivalent, if the actual accounting period is shorter or longer than 12 months) exceeds or is expected to exceed the registration threshold of EUR 15,000, as defined in Section 26c of the VAT Act.
A person may register for VAT in Finland even if they are not required to recover input VAT. Persons who are not required to register (for example, when the value of their Finnish taxable supplies during the applicable 12-month accounting period did not exceed the registration threshold) may register voluntarily if they make taxable supplies or operate a business with the intent to make such supplies.
Registration is achieved by applying to the Tax Administration. Taxable persons who are either residents in Finland, or have a business establishment in Finland, may register voluntarily if they make no taxable supplies in Finland but make or intend to make supplies outside Finland that would be taxable if made in Finland. A non-resident business that makes reverse charge supplies to Finland may also register voluntarily for VAT registration.
Individuals who pay taxes in Finland can request to register for Value Added Tax (VAT) by submitting an application to the Finnish Tax Administration. This application process is comparable to registering a company on the Finnish Trade Register and can be done simultaneously. However, it may take several weeks to receive approval and a VAT registration number. It’s important to note that not having a VAT registration number does not exempt a business from the obligation to account for and pay VAT while waiting for it.
A business becomes liable for VAT from the date it should be registered or the date of request of the voluntary registration, not from the date that the business applies for the registration or the date it receives its VAT registration number. A business may also reclaim any VAT paid on purchases from the date it must be registered, even if the business is registered in the VAT register only later and must therefore keep records of suppliers’ invoices to support that claim.
If a business can prove that it made capital investments in real estate within the preceding six months, input VAT on those capital investments may be deducted as well.
Any modifications or alterations within a company or organization must be communicated to the Finnish Tax Administration. Companies have the option to report any updates related to their VAT registration status to either the Finnish Tax Administration or the Finnish Patent and Registration Trade Register by using the Business Information System e-services website. In order to avail this facility, taxpayers are required to provide their Finnish personal identity code, internet banking code, or electronic identity card.
Taxable Persons
The term “person” for VAT purposes encompasses both natural and legal persons, and it is the person, rather than the business, that is subject to taxation. VAT registration typically applies to all business activities of the registered person. Additionally, general partnerships, limited partnerships, and other informal partnerships such as estates of deceased persons and unregistered associations are regarded as separate taxable persons, distinct from their partners.
Mandatory Registration
Individuals are obligated to register for VAT if the value of their taxable supplies in Finland over a period of 12 months (or an equivalent period, if shorter or longer than 12 months) reaches or is anticipated to surpass the registration threshold of 15,000 euros.
Voluntary Registration
Individuals may choose to voluntarily register for VAT, even if they are not obligated to do so, in order to claim input VAT recovery. In cases where individuals are not required to register (such as religious societies, provided the value of their taxable supplies in Finland during the relevant 12-month accounting period does not exceed the specified registration threshold in Section 3.1), they may opt to register voluntarily if they engage in business activities with the intention of making taxable supplies.
Exemptions from Registration
Businesses that are based in the country and whose taxable supplies do not surpass the registration threshold during the applicable 12-month accounting period are not obligated to register for VAT.
Group and Divisional Registration
Grouping for VAT purposes in Finland is optional, meaning that it is not mandatory and businesses may choose whether or not to opt for it.
Registration, Generally
There is a requirement for companies or organizations to inform the Finnish Tax Administration of any changes made within their business. Such changes can be reported to the Finnish Patent and Registration (PRH) Trade Register or the Finnish Tax Administration through the Business Information System (BIS) e-services website. To access this service, taxpayers must provide their Finnish personal identity code and personal internet banking code, or their electronic identity card (HST). It’s important to note that there are no charges associated with filing changes with the Tax Administration.
VAT Representative
A business located outside of the EU that provides taxable supplies in Finland is required to appoint a VAT representative in order to register for VAT. However, for a foreign business that is established within the EU, the appointment of a VAT representative is voluntary.
To comply with the VAT regulations, the appointed representative must be a Finnish resident, and typically, only a business registered in the Finnish Trade Register is accepted as a representative. The Tax Administration is responsible for approving the appointed representative.
Distance Selling
If a supplier’s sales value in Finland does not exceed EUR 35,000 (excluding VAT) in a calendar year, and the previous year’s total sales of the same type did not go beyond EUR 35,000, then they are exempt from taxation for distance selling.
To assist distance sellers operating within the EU and those who sell low-value goods from outside the EU, the EU has established a simplified registration system known as the “One Stop Shop” (OSS) regime. This system allows these sellers to register for VAT in one EU member state and subsequently declare and pay VAT on their sales to customers in other member states. The OSS regime is aimed at reducing administrative burdens and making it simpler for distance sellers to comply with VAT rules throughout the EU.
New Regulation July 2021
Beginning July 2021, country-specific VAT thresholds were eliminated in favour of an EU-wide distance selling threshold of EUR 10,000. All distance selling revenues below this new threshold are still subject to VAT in the country of origin or the home country of the business.
Last Updated: 14/12/2023
Disclaimer
The information provided by Global VAT Compliance B.V. on this webpage is intended for general informational purposes only. Global VAT Compliance B.V. is not responsible for the accuracy of the information on these pages, and cannot be held liable for claims or losses deriving from the use of this information. If you wish to receive VAT related information please contact our experts at support@gvc.tax
