VAT on private-sector social services

The sale of home services and services supporting home services may be exempt from VAT if the services are sold to a person in need of social welfare and are sold as part of social services.

Municipalities, joint municipal authorities and the State of Finland can sell social services without VAT. Private service providers can also sell social services exempt from VAT, but only if the activity is supervised by social authorities.

Social welfare refers to activities such as:

• care of children and teenagers, e.g. foster home activity
• early childhood education, e.g. day care centre activity or family day care
• care of elderly people, e.g. home service and nursing home activity
• care of disabled people, e.g. as home service or in an institution
• other services and support for the disabled
• services for substance abusers
• other similar activities.

Social services also include interpretation services that are provided because of a person’s hearing disability, hearing/visual disability, oral disability or other such disability and that are based on law or partly paid for by the State.

Home services and services supporting home services

If home services or services supporting home services meet the conditions of social welfare services, they can be sold exempt from VAT.

Home services refer to activities related to everyday life and assistance in them. Home services include personal care, nursing and activities related to child care, upbringing or other everyday life.

Services supporting home services refer to meal services, clothes care, house cleaning, bathing, provision of an accompanying person, and services supporting social interaction.

When can social services be sold exempt from VAT?

Municipalities, joint municipal authorities and the State can sell social services without VAT.

Private service providers can sell social services exempt from VAT only if the activity is supervised by social authorities and sold to a person who is in need of social welfare (person with impaired functionality due to age, illness or the like). The social authority does not need to have issued a customer-specific decision on the service, but the following conditions must be met:

• The service provider, i.e. the seller, has notified the municipality they work in that they provide social services. A notification must also be submitted about services supporting home services, such as house cleaning service. If the service provider acts in several municipalities, a notification must be submitted to each municipality. In the case of round-the-clock social services, the service provider also needs to get a permission from the social authority.
• The seller has made a service plan or other such plan together with the customer. If a private service provider sells social services based on a decision issued by the municipal authority, the plan is prepared by the municipality’s social authority.
• Social services are based on the authority’s decision or the service provider has made a written agreement with the customer on social services.
• The service provider has a designated person responsible for the quality of the services.
• The service provider has a self-monitoring plan.

Interpretation services can be provided even if the above conditions are not met. However, the interpretation services must be social services that are provided because of a person’s hearing disability, hearing/visual disability, oral disability or other such disability and they must be based on law or partly paid for by the State.

When can private social services be bought without VAT?

If you are a private individual in need of social welfare, you can buy social services from a private service provider exempt from VAT. This requires that the following conditions are met:

• The seller’s activity is supervised by the social authority.
• The seller, or the service provider, has notified the municipality they work in of the services they provide or has received a permission from the social authority to provide round-the-clock services.
• The service provider or the municipality’s social authority has made a service plan in cooperation with you.
• The service provider has made a written agreement with you on the social services. No agreement is needed if the social services are based on a decision issued by the authority.
• The service provider has a designated person responsible for the quality of the services.
• The service provider has a self-monitoring plan.