General VAT Rate to Increase from 24% to 25.5% Starting September 1, 2024
Overview of the VAT Rate Change
In Finland, the general VAT rate will increase as of September 1, 2024. The new rate will rise from 24% to 25.5%. This change affects a wide range of industries and applies to most goods and services. It's crucial to understand how this impacts invoicing and VAT handling to ensure invoices are prepared correctly.
Guidelines for Applying the VAT Rate in Invoicing
The applicable VAT rate is determined by the delivery or performance date of the service or goods, not the invoice date. Below are the rules for determining the correct VAT rate in different situations:
1. Delivery or Performance Before September 1, 2024:
If the service is performed or the goods are delivered before September 1, 2024, the old VAT rate of 24% applies.
2. Delivery or Performance on or After September 1, 2024:
If the service is performed or the goods are delivered on or after September 1, 2024, the new VAT rate of 25.5% must be applied.
Examples of VAT Rate Application:
Invoice dated August 31, 2024:
If the service or goods were delivered before this date, the 24% rate is used.
If delivery is on or after September 1, 2024, the 25.5% rate must be used.
Invoice dated September 1, 2024, or later:
The VAT rate is based on the delivery or performance date:
If before September 1, apply 24%.
If on or after September 1, apply 25.5%.
Important Reminder
The VAT rate always depends on the date of delivery or performance, not on the invoice date. This rule is especially critical during the transition to the new general VAT rate.