If you are selling goods or services, you are probably VAT-liable. Value-added tax (VAT) is a general tax on consumption added by the seller to the sales price of goods or services. The seller collects the tax from the buyer during the sale and pays it to the state.
A company engaged in business subject to VAT must register in the VAT register - unless its turnover during the financial period (12 months) is less than EUR 10,000. Even then, the company may still apply to be included in the register. An entrepreneur subject to VAT may deduct from the taxes paid to the state the value-added taxes included in the price of goods or services purchased from another party subject to VAT.
The amount of taxes to be paid is calculated by subtracting the taxes included in the deductible purchases in each period from the taxes of the sales for the same period. Value-added tax is declared and paid to the Tax Administration using the reference for unprompted taxes. The 12th day of the month is a common due date.
As a rule, the VAT of sales and purchases is declared monthly, depending on the tax period of your company. The returns must be filed electronically, for example via the MyTax (vero.fi). Returns on paper are accepted only for special reasons.
You can find more information on value-added tax and declaring unprompted taxes on the vero.fi website.
The small business can opt for the cash basis
Companies with max. €500,000 turnover per accounting period get an option to account for their VAT on cash basis. This means that a small business is able to report its VAT liability according to the actual sales and purchases of the month when it receives payment or pays another company for the goods or services it has bought.
Cash basis applies only to the selling and purchasing in Finland of goods and services. This way, imports and exports and the intra-Community supplies and acquisitions fall outside its scope. Similarly, it is not allowed in the case of cross-border selling of services where the VAT reverse-charge scheme is applied.
Business ID and invoice forms
Every party liable to pay VAT has a business ID (ytj.fi). This ID number is used to identify the company in contact with authorities, and in the company’s letters and forms, such as order and quotation documents as well as invoice forms.
Invoices must include the required information (vero.fi) (in Finnish) :
business ID and VAT number in EU trade,
“VAT reg.” (alv.rek.) indication,
itemisation of the tax share and rates.