Finland SME rules

SME Scheme – General features

Exemption

It is possible to opt for the SME scheme in Finland. However, taxable persons whose place of business is in the Aland Islands are not able to apply the SME scheme.

National annual threshold

The information on the national annual threshold is available on TEDB.

National annual threshold in Finland is EUR 20 000, according to the Finnish VAT Act article 3.

In Finland, the annual turnover from current and previous calendar year are reviewed when taxable person wants to avail themselves of the exemption. The national threshold EUR 20 000 must not be exceeded during previous or current calendar year.

Supplies to be included in the calculation of turnover are those referred to in the Directive 2020/285 article 288. For instance, supplies of edition of a newspaper or periodical to non-profit organisations are exempted (Finnish VAT Act art. 56) are included in the national and union annual turnover.

Domestic SME scheme

Simplified VAT obligations

A small enterprise established in Finland who applies the SME scheme in Finland only (domestic SME scheme) is released from the following VAT obligations:

to notify Tax Administration of the beginning of its activity
to VAT register
to submit periodical VAT returns
to issue invoices
to keep accounts for VAT purposes

There are no specific VAT invoicing requirements for small businesses in Finland. There might, however, be other obligations that come from other legislative texts than VAT-related ones.

Cross-border SME scheme

‘The cross-border SME scheme applies in the following situation(s):

The small enterprise applies the SME scheme in other Member States than the Member State of establishment, or;
The small enterprise applies the SME scheme both in the Member State of establishment and in other Member State(s).’

Simplified VAT obligations

The VAT registration in each Member State is replaced by the SME special scheme where a single prior notification is submitted in the Member State of establishment.

Single quarterly report must be submitted in the Member State of establishment. All supplies in all Member States are included in this quarterly report.

There are no specific VAT invoicing requirements for small businesses in Finland. There might, however, be other obligations that come from other legislative texts than VAT-related ones.

Currency

The values of supplies of goods and services to indicate in the prior notification, in the update to a prior notification and in the quarterly reports must be in EUR.

Way of submission

The prior notification, the update to a prior notification and the quarterly reports should be submitted by electronic means on MyTax web portal. (vero.fi/en/e-file/mytax/)

Additional simplified VAT obligations

Exempt small enterprises applying the cross-border SME scheme in Finland are released from the following VAT obligations:

to issue invoices for B2C supplies
to issue full invoices for B2B supplies
to keep accounts for VAT purposes

Loss of simplified VAT obligations

Not applicable

Transitional period

Finland does not apply any transitional period in case the national annual threshold is exceeded during the current calendar year.

Quarantine

Quarantine period in case of exclusion from the SME scheme

Small enterprises excluded from the SME scheme in Finland due to exceedance of national or union threshold are not able to benefit from that exemption during a quarantine period.

If the national or union annual turnover threshold are exceeded during a calendar year, the small business cannot avail itself of the exemption during the following calendar year.

You can consult the quarantine period applicable in Finland on TEDB database.

Practical examples on the application of the quarantine period and its consequences are available in the Explanatory notes.

Quarantine period in case of voluntary departure from the SME scheme

No quarantine period is imposed in Finland. You can consult the quarantine period applicable in Germany on TEDB database.

Appeals

Domestic SME scheme

Appeals should be addressed to your Member State of establishment (MSEST).

Cross-border SME scheme

Member State of establishment (MSEST)

Appeals related to the following topics should be addressed to MSEST:

Union annual turnover
Prior notification, correction and update to a prior notification
Quarterly reports and correction of a quarterly report
Exclusion for exceeding the Union annual turnover
Sanctions for failure to submit prior notification, and update of prior notification or quarterly report or final report

Member State of exemption (MSEXE)

Appeals related to the following topics should be addressed to MSEXE:

National annual turnover
Denial to access the cross-border SME scheme in MSEXE
Loss of simplified VAT obligations in respect of MSEXE
Exclusion for exceeding the national annual threshold/sectoral threshold in MSEXE

Calendar

VAT simplified procedures