arvonlisätys

Arvonlisätys, commonly known as value-added tax (VAT) in English, is a consumption tax imposed on the sale of goods and services in Finland. It is a key component of the country’s tax system and is administered by the Finnish Tax Administration (Verohallinto). The standard VAT rate in Finland is currently 24%, though reduced rates of 10% and 14% apply to certain goods and services, such as food, books, and public transportation.

The VAT system operates on the principle of tax neutrality, meaning that businesses act as intermediaries by collecting VAT from customers and remitting it to the tax authorities. Businesses are generally entitled to deduct the VAT they have paid on their own purchases (input VAT) from the VAT they collect on sales (output VAT). This mechanism ensures that only the final consumer ultimately bears the tax burden.

Arvonlisätys is applied at each stage of the supply chain, from production to retail, but the cumulative effect is that only the final consumer’s portion of the tax is retained by the state. Exemptions and special rules exist for certain sectors, such as healthcare, education, and international trade, to align with broader economic and social policies.

In Finland, VAT registration is mandatory for businesses exceeding a certain annual turnover threshold, typically €10,000. Non-compliance with VAT obligations can result in penalties, fines, or legal consequences. The Finnish Tax Administration provides guidelines, digital tools, and support to help businesses comply with VAT regulations.

Arvonlisätys plays a significant role in funding public services and infrastructure in Finland, contributing to the country’s welfare state model. Its structure ensures broad-based taxation while minimizing administrative burdens on businesses through the input-output deduction system.