arvonlisäverolle

Arvonlisävero (ALV), known in English as value added tax (VAT), is a consumption tax levied on the sale of goods and provision of services in Finland. It is a percentage added to the price of taxable goods and services, payable by the end consumer. The tax is collected incrementally along the supply chain, with each business charging VAT on its sales and reclaiming the VAT paid on purchases. The difference is remitted to the Finnish Tax Administration, ensuring the tax ultimately bears the burden of the final consumer.

The standard VAT rate in Finland is 24 percent, applied to most goods and services. Reduced rates of 10 percent and 14 percent cover specific categories such as hospitality, food and non-alcoholic drinks, and some health care services. Certain items, including most foodstuffs, books, newspapers, and public transport, enjoy a 0 percent rate, effectively exempting them from VAT.

Registered businesses must file VAT returns quarterly, detailing sales, purchases, and the net VAT. Small businesses with annual turnover below a certain threshold may opt for simplified regimes or may be exempt from registration. The VAT system aims to promote fair competition, discourage tax evasion, and serve as a significant source of government revenue.

Since its introduction in 1976, Finland has adjusted rates and exemptions to align with EU directives while addressing domestic policy goals. The VAT framework remains integral to Finland’s tax structure, balancing the need for efficient revenue collection with consumer protection through transparency and regulated rate settings.