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Finland V.A.T. and Other Taxes

  • In most cases the standard VAT is 24%.
  • There are reduced rates of VAT of 14% charged on food restaurants and catering and a super reduced rate of 10% charged on public transport services, books ,minor repairs and medicines.
  • VAT is charged on assets and services in Finland as well as on imports into Finland.
  • VAT returns are made monthly, the payment being due on the 15th of the month after the month of the report.
  • There is an obligation to report to VAT authorities when the annual turnover is in excess of EURO 10,000.

Finland Inheritance Tax/Gift Tax

  • Tax is payable in Finland on both an inheritance and on gifts on the application of fairly similar tax principles.
  • When either the donor of the gift/the testator or the recipient of the gift/the heir is a Finnish resident, the tax is also applicable to overseas assets.
  • When neither the donor of the gift/the testator or the recipient of the gift/the heir is a Finnish resident, the tax applies only to real estate in Finland or shares in a company of which 50% of its assets are real estate inside Finland.
  • When the tax is applicable in a foreign country, the overseas tax will be credited against the tax due in Finland unless it refers to real estate in Finland.
  • As a general rule, recipients of gifts / heirs are divided into two groups:
            - Group 1 - a spouse, children, grandchildren and parents.
            - Group 2 - all others.
  • In general, the rate of tax for Group 2 is much higher than Group 1.
  • The rates of inheritance tax for Group 1 in EURO are as below:

    Taxable Income Tax on the Lowest Bracket % Tax - Balance
    0 - 20,000 0 0
    20,000-40,000 100 7%
    40,000-60,000 1,500 10%
    60,000 -200,000 3,500 13%
    200,000-1,000,000 21,700 16%
    Over 1,000,000 149,700 19%

  • In Finland there is a Double Tax Prevention Treaty on inheritance tax with the Nordic Countries, the United States of America, Holland, France and Switzerland.
  • In Finland there is a Double Tax Prevention Treaty on gifts tax with the Nordic Countries and with Greece only in the case of real estate.

Finland Real Estate Tax

  • The tax is imposed on real estate located in Finland.
  • The taxes are transferred to the local authority in which the property is located.
  • Ground that is used for agriculture or forestry is exempt from tax.
  • The rate of tax varies among the local authorities and fluctuates between between 0.41% to 6%.
  • For real estate that is used as a permanent residence, the rate of tax is 0.22% - 0.5%.

Finland Transfer Tax

  • This tax is payable on the transfer of real estate and securities.
  • The rate of tax - transfer of real estate: 4%
                         - transfer of securities: 1.6%.
  • The tax is payable by the purchaser.
  • There is an exemption on the transfer of real estate when the purchaser is between 18 and 39 in age and the real estate serves as his or her first permanent place of residence.
  • The transfer of securities traded on the Stock Exchange is exempt from tax.
  • There is an exemption when both the purchaser and the vendor are non-residents.
  • The date for payment of the tax - for securities, within two months of the date of the transaction.
    For real estate, within 6 months of the date of the transaction.

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