Finnish Tax Administration Guidance on New 25.5% VAT Rate Effective September 2024

• Finnish Parliament has adopted legislation increasing standard VAT rate from 24% to 25.5% effective September 1, 2024
• New VAT rate will apply to goods and services currently subject to 24% rate
• Finnish Tax Administration has published guidance on transitional provisions for the increase
• Allocation of transactions subject to VAT rate will be based on timely allocation principles in Finnish VAT Act
• Guidance provides detailed examination of situations involving instalments, continuous supplies, advance payments, etc.
• VAT rate applied is the one in effect when supply was made, even if adjustment item is allocated to different tax period
• Companies using cash or invoice basis for VAT reporting may need to report VAT at different rates before and after September tax period
• VAT return will have one section for each different VAT rate, payable taxes must be declared in same box regardless of rate applied
• Guidance available in English translation, Finnish and Swedish versions also available.

Source: borenius.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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