Arvonlisäverovelvollisuuden

Arvonlisäverovelvollisuus, often abbreviated as ALV-velvollisuus, refers to the obligation of a business or individual to register for and charge Value Added Tax (VAT) on their goods and services. In Finland, this obligation generally arises when a business's taxable turnover exceeds a certain threshold within a twelve-month period. This threshold is set by law and is reviewed periodically.

Once a business becomes VAT registered, it must charge VAT at the applicable rate to its customers. The standard VAT rate in Finland is currently 24%, but reduced rates of 14% and 10% apply to certain goods and services. The collected VAT is then remitted to the Finnish Tax Administration (Verohallinto).

However, VAT registered entities also have the right to deduct input VAT, which is the VAT they have paid on their own business purchases and expenses. This means that businesses ultimately pay VAT only on the value they add to the goods or services. Certain types of businesses or transactions may be exempt from VAT or subject to special schemes. It is important for businesses to understand their specific VAT obligations to ensure compliance with tax laws.