Arvonlisäverotonta

Arvonlisäverotonta refers to goods or services that are exempt from Value Added Tax (VAT) in Finland. This means that no VAT is charged on these transactions, and consequently, the seller cannot reclaim any VAT incurred in their own business related to these exempt supplies. The concept of VAT exemption is distinct from zero-rating, where VAT is charged at 0% and input VAT can be reclaimed.

Several categories of goods and services are designated as arvonlisäverotonta under Finnish VAT law. These commonly include certain financial services, insurance, postal services provided by the public postal operator, the sale and leasing of immovable property (with some exceptions), education provided by public institutions, healthcare services, and social welfare services. The specific criteria for exemption are detailed in the Finnish VAT Act.

Businesses that exclusively deal with arvonlisäverotonta supplies generally do not need to register for VAT. However, if a business engages in both taxable and exempt supplies, it must carefully determine its VAT liability and the extent to which it can deduct input VAT. Input VAT related to the generation of exempt supplies is typically irrecoverable. Understanding the distinction between taxable, zero-rated, and exempt supplies is crucial for businesses operating in Finland to ensure correct VAT compliance.