Finland is to again raise its VAT rates in the midst of the worsening financial crisis. The new rate change, a 1% rise to 24% next year, follows a previous 1% increase from 22% in July 2010.
Whilst Finland has evaded the worst of the Euro economic crisis in the past five years, it still faces a rapidly ageing population, with related health care and pension costs, plus falling income tax revenues. This has forced it into a second VAT rate rise to 24%. This compares with the average European VAT rate of over 21%. The other major Scandinavian countries have VAT rates of 25%.
Companies will be required to implement the VAT rate rise in accordance with the transition proposals, which are yet to be published. These typically mean goods should be charged on the rate applicable at the date of title transfer (e.g. delivery), and services at the time of completion or invoicing, whichever is earlier. You can read about EU VAT rules in our VAT compliance section.