The supply of goods by a non-resident is subject to VAT in Finland.
When a non-resident has an establishment in Finland, the establishment must register for and pay VAT when the registration threshold is met. Gradual VAT relief for turnover up to EUR 30,000 applies.
When a non-resident has no establishment in Finland, they must register for VAT regardless of meeting the standard registration threshold unless the supplies are subject to a reverse charge.
In general, the appointment of a tax representative is not required, but a non-resident required to register for VAT may opt to do so. However, if a non-resident is not required to register for VAT but does so voluntarily, the appointment of a tax representative resident in Finland is required.
In general, when a supplier has no establishment in Finland and the customer is a taxable person (B2B), a customer is required to account for the VAT payable on the supply and make payment.
The reverse charge does not apply for sales of goods to individual consumers (B2C) and in certain other cases. In addition, if a non-resident supplier has voluntarily registered for VAT in Finland, the reverse charge no longer applies.
Finland has implemented new rules concerning payment of VAT on imports from outside the EU, effective 1 January 2018. As per the new rules, the import VAT due on goods imported from outside the EU will no longer be required to be paid by Finnish VAT-registered businesses but will be self-assessed and recovered through periodic VAT returns filed by the businesses.
Effective 1 July 2021, Finland has implemented the new EU VAT rules for e-commerce transactions for supplies made by non-residents to non-taxable persons (B2C). The following are the key changes under the new rules from the effective date:
- The distance sales threshold of EUR 35,000 is abolished and the destination principle for distance sales of goods applies instead. Thus, the supplies are subject to VAT in the Member State of the recipient, regardless of their volume. However, in order to reduce the administrative burden on smaller businesses, an EU-wide limit of EUR 10,000 is provided for distance supplies, under which VAT is collected in the Member State where the seller is established or where transportation starts;
- A One Stop Shop system is introduced for intra-EU distance sales of goods. Under the scheme, an opportunity is given to the taxpayer to register in one EU Member State (referred to as the Member State of Identification) and report all sales of goods to customers across the EU in a single, consolidated VAT return;
- For goods imported from outside the EU, the current import exemption for low value goods (below EUR 22) ceases to apply. Therefore, VAT at the appropriate rate becomes due on such imports in the EU; and
- VAT on consignments imported from outside the EU with a value not exceeding EUR 150 can be reported through the “Import One Stop Shop” (IOSS).