Value-added tax (VAT) is levied at 22% on goods and services sold by businesses. Finland applies also lower rates for VAT on certain goods. For example food is taxed at a rate of 17 %. Medicines and books 12 %. Transport of individuals, theater, circus, music shows, sports events, zoos, museums and other cultural events 6 %.

Vat is paid on import of goods, but export is zero-rated. Because Finland is a member of the European Union trade between other EU countries is treated differently. There is no customs procedures between EU countries so the VAT is not possible to be collected on the boarder. The basic rule in VAT between EU member states is that the VAT is paid at the country of buyer of the goods when the buyer is a business entity. If the buyer is a private person VAT is paid at the country of seller of the good. There are own rules for VAT on services.

Non-taxable transactions include transactions within the same legal entity, such as transfer of supplies between a branch and its head office, both of which are established in Finland, and transfers of a business or a portion of it if the transferee continues the same business.

In general, VAT credit can be obtained on taxable goods and taxable services used in taxable business activities. There are some restrictions of making VAT deductions. VAT on cars is not deductible, except if the car is used only for business purposes. Entertainment expenses are not deductible

A foreigner generating taxable supplies in Finland may register and some times has to register for VAT in Finland. A foreigner without permanent establishment in Finland should appoint a VAT representative. When registered in Finland the input VAT is deductible on monthly VAT declarations and refunded that way. If a foreigner is not registered in Finland it may apply for a VAT refund from the municipal tax office of Uusimaa. The minimum period for a refund is 3 months and the maximum period is a calendar year. The application has to made in six months from the end of the calendar year that is in question. The refund application has to made in a certain form in finnish or in swedish. Original invoice should be attached to the application with a certificate from the foreign tax authority proving that that the applicant is a business entity.


Stamp duties are 1.6% on transfers of shares and 4% to 6% on transfers of real estate. Transactions carried out on the stock exchange or over-the-counter (OTC) are exempt from stamp duties. Loans from banks and other institutions are subject to a 1.5% stamp duty of the amount borrowed. The same rate applies to mortgages.


Excise duties are levied on sales of alcohol, gasoline, tobacco, motor vehicles and certain other products.

The content of this article is intended to provide a general information on the subject matter. It is therefore not a substitute for specialist advice.

For further information contact Mr. Jukka Nisonen on +358 0 1727 7282, Tilintarkastajien Oy - Ernst & Young Kaivokatu 8, 00100 Helsinki, Finland or enter a text search 'Ernst & Young' and 'Business Monitor'.