12.01.2018

New VAT rules for imports to Finland

Finland has implemented new rules for the payment of value added tax (VAT) on goods imported into Finland from outside the EU as of 1.1.2018. From now on, a Finnish company whose VAT number is used for customs clearance is responsible for VAT on imported goods.

VAT is no longer payable to the Finnish Customs for imported goods at the time of customs clearance. Under the new rules, businesses are required to self-assess and report the amount of VAT to the Finnish Tax Administration on their own initiative.

The new system should relieve the Finnish importers’ cash flow tension as they no longer need to pay the VAT due on their imports in advance and then recover it. However, the changes will not affect how VAT will apply to goods imported by private persons or by businesses that are not registered for VAT in Finland.

Companies that export goods to Finland from outside the EU should note the change on shipping terms DDP. It is no longer possible for Finnish companies to recover VAT that is paid for imported goods in advance. Therefore, using DDP terms is no longer advised, since the VAT amount can not be reclaimed. Instead, the recommended Incoterms are DAP (where import duties and taxes are paid by the consignee), or DDP excluding VAT.