The Finnish Tax Administration updated its guidance on VAT refunds for non-EU businesses on 20 January 2025, revising VAT rates and adding provisions for construction services involving property-specific equipment.
The updated guidance incorporates Finland's current VAT rate structure: the standard rate remains at 25.5%, while reduced rates apply to food and books (14%), and newspapers and periodicals (10%). The guidance also introduces clarifications on construction services liability, specifically exempting work on machinery, equipment and fixtures serving specialized property activities from reverse charge provisions.
Under the revised framework, non-EU businesses can claim VAT refunds on Finnish purchases if they have no fixed establishment in Finland and conduct only specific types of sales: transactions subject to reverse charge, sales to the Finnish state, or exempt transport services. The guidance maintains that refund eligibility mirrors deduction rights available to Finnish VAT-registered businesses, with similar restrictions applying to personal use items, entertainment expenses, and private vehicles.
The update adds provisions for businesses using VAT special schemes, allowing them to claim refunds even if they have Finnish fixed establishments, provided their activities remain within the special scheme framework. Applications must cover minimum three-month periods within a calendar year, with refunds processed only above €400 for interim periods or €50 for year-end claims.
Context
The guidance update reflects Finland's alignment with EU VAT refund procedures while addressing practical issues in construction sector taxation and digital service provisions. The clarifications on construction services distinguish between general building work subject to reverse charge and specialized equipment installations, providing greater certainty for international contractors operating in Finland.
