Finland: VAT Rate Change Effective 1st September 2024


The Finnish government has confirmed that the standard VAT rate will change from 24% to 25.5% on 1 September 2024.  This gives businesses a relatively short timeframe in which to implement the necessary changes to ensure the correct rate of VAT is applied.  Changes will have to be made to accounting software, ERP/POS systems, invoicing software, websites, contracts, prices, etc.

 

Other issues such as tax points (i.e. the time VAT becomes accountable) will be important to consider; for example – if a price is agreed, or payment is taken now, but the supply is after 1 September, how should VAT be dealt with?  Tax authorities usually prescribe ‘anti-forestalling’ measures which dictate how tax points should be dealt with so businesses may need to seek advice to ensure the correct rate is applied.

 

Whilst the Finnish government needs to take measures to balance public finances, taxpayers feel that this does not give businesses sufficient time to adopt the rate change.  Further, the change in rate is effective just as the summer holidays are ending and staff return to work.  There is therefore growing pressure on the tax authority to push the date back so tax staff do not have to cancel their summer holidays.

 

The VAT return in Finland is reported by tax rate (standard and reduced rates) so it is important that businesses consider how to correctly implement this as soon as possible.