General VAT rate rise in Finland as of 1 September 2024 – information on the tax periods

From 1 September, the general VAT rate in Finland will go up from 24 per cent to 25.5 per cent. The new percentage will be applied on the goods and services that are subject to the 24-percent VAT rate today. Thus, it will be applied to transportation and warehousing services, among others.

Value-added tax on a service is allocated to the tax period when the service was given i.e. provided to the recipient. If the service performance is in an unfinished state at the time when the VAT change comes into force, the percentage rate to be applied will be the one in effect at the date when the finished service is provided. This means the date when the end result becomes available to the recipient of the service. For example, if a transport service of goods is started in August, but ends in September, the VAT rate is 25.5 %.

In general, the VAT payable on a sale (=supply) of goods is allocated to the tax period when the goods were handed over to the buyer, i.e. delivered. Example provided by the Tax Administration: the seller sends a buyer a set of spare parts on 31 August 2024, and it arrives in the buyer’s warehouse on 1 September 2024. If it was agreed that transportation is the seller’s responsibility, and the date of delivery is 1 September 2024 i.e. the day when the buyer received the parts, and the VAT rate is 25.5 %. If it was agreed that transportation is the responsibility of the buyer, then 31 August 2024, the date when transportation begins is deemed as the date of delivery and the VAT rate would in this case be 24 %.

The VAT rate for imports from outside the EU is determined according to the date on which the customs declaration has been accepted. If the customs declaration is accepted on 1 September 2024 or later, 25.5 % VAT will be levied. The VAT rate is 25.5 % even if the customs declaration is submitted in advance in August.

Sources / additional information:

More detailed information and examples are available at the following websites:

Finnish Tax Administration: https://www.vero.fi/en/businesses-and-corporations/taxes-and-charges/vat/rates-of-vat/new-vat-rate-from-1-september-2024--instructions-for-vat-reporting/

Finnish Customs: https://tulli.fi/en/-/change-in-general-vat-rate-will-affect-import-vat