Taxes in Europe Database v2
VAT Act of 30 December 1993 (1501/1993).
Ahvenanmaa / Åland
The European Union Act of Accession provides for the exemption of the Province of Åland from the regime for the harmonisation of indirect taxation. Consequently, the Province is considered to be a third country as regards the transactions between the Province and EU Member States, including the mainland Finland.
The seller is not liable to tax if the annual turnover of the business does not exceed € 8,500 and he has not opted for taxation. When this threshold for VAT liability is exceeded, the enterprise receives a relief, which gradually decreases with the increase of turnover. The full amount of tax is levied when the annual turnover reaches 22,500 euro.
The derogations are applied partly. E.g. the international transport of passengers is exempted.
Without the right to deduction of input tax:
With the right to refund of input tax:
The importation and the intra‑Community acquisition of goods are in certain cases exempted, i.e., if the domestic sale is exempted. The intra‑Community acquisition made by enterprises which are not at all entitled to a deduction or by non‑taxable legal persons is exempted if they do not acquire goods (excluding goods subject to excise duties and new means of transport) for a value exceeding € 10,000 in the same calendar year or the preceding year. The removal from warehousing arrangements is not in certain cases taxable if the sale, importation or intra‑Community acquisition of the good has not been exempted under these arrangements or the good is transferred outside the Community.
Letters and postal parcels paid in cash are exempted from the general 24 % VAT-rate. This is done in accordance with the EU value added tax directive that exempts universal postal service products from value added tax within the European Union.
Comment to the point "reception of radio and television broadcasting services": Subsidies based on the licence fees from the radio and television fund to the Finnish Broadcasting company and similar subsidies to Ålands radio and TV.
A reduced rate of 10 % is applied, inter alia, to medicines, books, domestic passenger transport, admission to cultural services and entertainment events, sporting facilities, works of art in certain cases and subscribed newspapers and magazines.
A reduced rate of 14 % is applied to foodstuffs (excluding live animals) and animal feeding stuffs and to restaurant services (with the exclusion of alcoholic beverages).
Subscribed newspapers and publications of associations of public utility.
A 0 % rate is applied to printing services for certain membership publications.
The due date for VAT payment is the 12th day of the second month following the tax period. However, if the tax period is calendar year, the due date is 28th of February the year following the tax period.
The VAT is collected by the tax administration.
A reverse charge mechanism in value added taxation in construction sector is applicable. The mechanism aims to reduce the potential tax risk associated with VAT fraud. In the reverse charge mechanism the buyer of construction services, not the seller, is liable to tax. Mechanism is applied when construction services are supplied in Finland. Mechanism applies to sales of construction goods and construction services to businesses. It does not apply to sales to private individuals.
A reverse charge mechanism in value added taxation for emission permits is applied. In the mechanism the buyer of permits is liable to tax, not the seller. The reform aims to reduce risk of VAT fraud pre-emptively.