Indirect Taxes

VALUE-ADDED TAX

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.