ALVvelvollisuus

ALVvelvollisuus, or value-added tax obligation, refers to the legal requirement to charge, report and remit value-added tax on taxable supplies of goods and services in Finland. It applies to businesses and other entities that carry out taxable activities within Finland and engage in the sale of goods or the provision of services that are subject to VAT. The obligation also covers imports of goods and certain cross-border transactions within the European Union.

Registration with the Finnish Tax Administration (Verohallinto) is the key step in establishing VAT liability. A person or company becomes liable for VAT when they engage in taxable activities or when they meet applicable turnover or activity criteria set by law; registration may be mandatory or, in some cases, voluntary. Once registered, the entity must charge VAT on taxable supplies, issue VAT-compliant invoices including the supplier’s VAT number, and file periodic VAT returns.

VAT returns and payment schedules depend on the level of business activity and are typically monthly, quarterly, or, for very small operations, annual. In addition to reporting VAT collected, businesses may deduct input VAT incurred on purchases used for taxable outputs, subject to general deduction rules. Accurate record-keeping and documentation are required for a prescribed retention period.

Finnish VAT consists of a standard rate and reduced rates; some goods and services are exempt or outside the VAT scope, and exports outside the EU are zero-rated. For cross-border transactions within the EU, the reverse charge mechanism may apply in certain cases, while imports from outside the EU involve import VAT collected at customs.

Penalties, interest, or corrective actions may follow non-compliance. Businesses should consult Verohallinto guidance or seek professional advice to determine their specific ALVvelvollisuus and duties.