Arvonlisäveron

Arvonlisävero, commonly known as VAT (Value-Added Tax), is an indirect tax imposed on the consumption of goods and services in many countries. In Finland, the standard rate of arvonlisävero is 24%, though reduced rates of 10% and 14% apply to certain goods and services, such as food, books, and public transportation. The tax is added to the price of most goods and services at each stage of production and distribution, though businesses act as collectors and payers of the tax to the Finnish Tax Administration (Verohallinto).

The VAT system ensures that the tax burden ultimately falls on the end consumer rather than the producer. Businesses register for VAT if their annual turnover exceeds a certain threshold, currently set at €10,000 for most goods and services. Registered businesses must issue VAT-inclusive invoices and file regular VAT returns, typically quarterly, detailing sales and purchases subject to VAT. Input VAT (tax paid on business expenses) can be deducted from output VAT (tax collected from customers) to reduce the net tax liability.

Arvonlisävero plays a key role in Finland’s tax system, contributing significantly to public revenue. It is administered under the *Arvonlisäverolaki* (Value-Added Tax Act) and its implementing regulations. Non-compliance with VAT obligations can result in penalties, interest charges, or legal consequences. The Finnish Tax Administration provides guidelines, tools, and support to help businesses comply with VAT requirements, including online services for filing returns and managing VAT registrations.

The VAT system is designed to be neutral, ensuring that the tax does not distort competition between domestic and imported goods. However, exemptions and reduced rates exist for specific sectors, such as healthcare, education, and cultural services, to align with broader fiscal and social policies.