ALVjärjestelmään

ALVjärjestelmään, which translates to "VAT system" in English, refers to the Value Added Tax (VAT) system implemented in Finland. VAT is a consumption tax that is levied on goods and services at each stage of the supply chain, with the ultimate burden falling on the final consumer. Businesses act as tax collectors, charging VAT on their sales and deducting VAT paid on their purchases.

The Finnish VAT system is harmonized with the European Union's VAT directive, ensuring a consistent framework across member states. There are different VAT rates applicable to various goods and services. The standard VAT rate is currently 24%. Reduced rates apply to certain items such as food, books, and passenger transport, typically at 14% and 10%. Some goods and services are exempt from VAT, for example, certain financial services and healthcare.

Businesses registered for VAT must submit regular VAT returns to the Finnish Tax Administration (Verohallinto). These returns detail the VAT collected on sales and the VAT deductible on purchases. If the deductible VAT exceeds the VAT collected, the business is entitled to a refund. Conversely, if more VAT is collected than is deductible, the business must pay the difference to the tax authorities. Special rules and schemes exist for small businesses, such as the cash flow VAT system, which can simplify VAT reporting and payment obligations. The ALVjärjestelmään is a significant source of government revenue in Finland.