The government outlined in April that the general value added tax rate in Finland will be increased from 24% to 25.5%. It is estimated that the VAT increase will bring additional revenues of about one billion euros to the state coffers.
The general VAT rate of 24% applies to most products and services sold in Finland. The reduced VAT rates remain at 14 and 10 %, so the value added tax on food, for example, is not getting tighter. However, the VAT on sweets will rise from 14% to the general VAT rate, i.e. to 25.5%.
What things must be taken into account when the VAT increases?
Changing the tax rate in the invoicing program alone is not enough, the change has wider effects that companies must take into account. The increase in the value-added tax rate naturally has an effect, first of all, on the pricing of products and services, when either taxable prices must be increased or tax-free prices must be reduced - or both. In consumer sales, the change in the VAT rate has a big impact. It's easier for companies that sell to other companies, where the prices are still only maintained tax-free.
In various software that guides and supports the company's operations, prices with or without taxes and value added percentages are used. The system supplier should make sure that half a percentage point, which is historically completely different in Finland, can be entered into the systems without problems.
Document templates in use, such as contract and order confirmation templates, should be reviewed for possible VAT percentages in standard text.
Events 1.9. border laundry on both sides
Care should be taken in such projects and sales where the decision, order or payment is on a different side of the 1.9.2024 border than the delivery of the service or goods. As a general rule, sales value added tax is applied to the month in which the goods have been delivered,or during which the service is completed.However, advance payments should be recorded at the time of payment with the VAT rate.
In e-commerce sales especially for consumers, you should be awake well before September. 30.8. A product ordered with an invoice from an online store or an order prepaid on the same day are in a different position with regard to VAT, even if they are both delivered, for example, on 2.9.
Accuracy is also needed when making a complaint before 1.9. of the invoiced product or service.
If a ready plan for the tax change has not yet been made in your company, it is good to start working on it now. By planning in advance, you also avoid the panics of the end of August and the messes of the beginning of September.
More information from the Tax Administration
Read more about the Tax Administration's notification instructions:
Find out about the preparation of the board's presentation on the matter:
https://lakitutka.fi/asiakirjat/hallituksen-esitykset/he61-2024
How does this affect the systems supplied by Pulmaton?
We have gone through the systems we have made and made sure in which cases changes are needed and where they are not. In practice, the systems we maintain work without problems even after the change in the VAT rate. For some systems, the new tax rate must be entered in the settings. In some systems, the prices must be mass sent from the enterprise resource planning system. We will inform you more about these on a customer-by-customer basis.
In individual cases, changes are needed for printout and e-mail templates where the tax rate was previously shown as a whole number, even though it is stored as a decimal number in the database. These changes do not require any action from the customer.
You can contact our customer service if you need support with the VAT change.
