Based on the provisions of the SME Directive, new VAT rules affecting small businesses will come into force as of 1 January 2025.
The new VAT Act might open a new opportunity for Finnish small businesses, when selling to other EU countries to utilize VAT relief in other EU member states. The small-scale operation threshold varies across EU countries. For example, in Sweden, it is currently around 8,000 euros, and in Estonia, 40,000 euros. Additionally, EU countries have a common threshold of 100,000 euros for VAT-exempt sales. A Finnish company can thus in the future take advantage of the small-scale VAT exemption in other EU member states, if the company’s turnover does not exceed the 100,000 euro threshold.
If a Finnish company would register for VAT exemption and utilize the VAT relief, for example, in Sweden and Estonia, the company’s sales in the current and previous calendar year cannot exceed the national thresholds for small-scale operations in these countries. Additionally, the VAT-exempt turnover of the company across the entire EU must not exceed 100,000 euros in the current and previous calendar year.
A company registered in Finland under the VAT exemption for small businesses for EU sales must submit a declaration of EU sales for small businesses for each calendar quarter. The declaration must be submitted by the last day of the month following the calendar quarter to which the declaration pertains.
Contact us if your company or association wants to make changes to its VAT registration.
