Value Added Tax
Value Added Tax (VAT) is a general consumption tax on the consumption of goods and services. VAT is an indirect tax which is to be paid by the end-consumers. Collected by businesses liable to tax, VAT is included in sales prices, and the VAT revenue is paid to the state.
VAT is levied on the value added at each stage of the production and supply chain. The level of VAT included in consumer prices is determined by the VAT rate and equals the total tax paid for value added. To avoid multiple taxation, those liable to VAT have the right to deduct input VAT from the tax levied on sales.
A broad-based VAT system is in effect in nearly all European OECD countries. The adoption of VAT is a prerequisite for EU membership.
The standard rate of VAT in Finland has been 24% since the start of 2013. At the moment, Finland has the fifth highest standard rate among the EU Member States.
Two reduced rates (10% and 14%) are in use in Finland. A zero-rate of VAT is also applied to certain goods, such as export deliveries. In that case, tax is not payable on sale, but sellers are reimbursed VAT on production input purchases. The tax rate is indicated as calculated from prices before taxes.
VAT rates in Finland
The standard rate of 24%
The reduced rate of 14%
- food and fodder
- restaurant and catering services
The reduced rate of 10%
- books
- newspapers and periodicals
- books, newspapers and periodicals supplied electronically
- medicines
- sports and exercise services
- passenger transport
- accommodation services
- TV and broadcasting operation fees
- cultural and entertainment events
- sale of works of art by the artist and all importation of works of art
- copyright royalties received by copyright organizations
- performance fees of a public performer
Value Added Tax Act of Finland (1501/1993)
Finnish Tax Administration, precise information on the VAT
Finnish Tax Administration, guidance on the VAT
VAT Rates applied in the Member States of the European Union