Global Daily Tax News, Finland Sets Out Proposed VAT Law Amendments, (May 20, 2024)

The Finnish Government has confirmed plans to transpose into its domestic law provisions from Council Directive (EU) 2020/285, which amends the rules concerning the VAT exemption for small businesses.

Under the Directive, the VAT exemption scheme for small businesses is to be expanded to newly allow businesses established in other member states access to Finland's exemption scheme providing that their Finnish turnover is less than EUR15,000 and their EU turnover is below EUR100,000.

The change will take effect from January 1, 2025. Businesses taking advantage of the new arrangements will need to submit a declaration each quarter of their turnover in each member state.

The Finnish Government said domestic law will also be amended to provide that newly registered taxpayers will be liable to account for VAT and remit VAT only when their turnover exceeds the registration threshold, and not retroactively for the full tax period in which the taxpayer's turnover exceeded the threshold.

To benefit from the exemption scheme, a trader's turnover in the current and also the previous calendar year will newly be taken into account, the Government said.