The supply of services 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 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 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 a customer is a taxable person, the customer is required to account for the VAT payable on the supply and make payment.
The reverse charge does not apply for sales of services to individual consumers 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 except for certain supplies of construction services.
As per the place of supply rules, electronically supplied services, telecommunications, and broadcasting services to consumers located in the EU Member States are, in general, taxable at the customer’s location irrespective of whether the customer is a taxable person (B2B) or a consumer (B2C). As an exception to this rule, effective 1 January 2019, electronic services provided to a non-taxable person (B2C) are taxable at the location of the supplier, provided the total amount of consideration received for the relevant services does not exceed EUR 10,000.
Effective 1 July 2021, under new EU VAT rules for e-commerce transactions, the OSS is introduced wherein 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 to customers across the EU in a single, consolidated VAT return. The following schemes are available within the OSS:
- The non-Union scheme for taxable persons that have no establishment within the EU; and
- The Union scheme for taxable persons that have an establishment within the EU (but are making supplies to Member States in which they are not established).
Until 30 June 2021, taxpayers had the possibility to opt for the use of the Mini One Stop Shop (MOSS) for supply of telecommunication, broadcasting and electronic services in order to minimize their tax compliance burden.
Electronically supplied services mean the services provided through a telecommunication network, an interface, or a portal, such as:
- Website supply, web-hosting, and distance maintenance of programs and equipment;
- Supply of software and its updating;
- Supply of images, text, and information, and making databases available;
- Delivery of music, films, and games, as well as gambling games, and of political, cultural, artistic, sporting, scientific, and entertainment broadcasts and events; and
- Performance of distance teaching.