VAT invoice requirements

This is an unofficial translation. The official instruction is drafted in Finnish and Swedish languages.

This guidance concerns VAT requirements for invoicing.

1 General information on VAT rules on invoicing

Invoices have a vital importance in value-added taxation. Invoices are a source of information on how the seller has treated its VAT liability and invoices also serve as proof of VAT deductibility for the purchaser. Invoices are a basis for various tax control operations, as well.

The general understanding is that the rules governing invoicing must be uniform in all EU member states to ensure the proper functioning of the internal market. The EU statutes on invoicing can be found in the VAT Directive (2006/112/EC). Articles 217 to 240 of the VAT Directive contain definitions and rules on how sellers should issue invoices to their customers, on the minimum information on invoices, and on invoices sent by electronic means. Article 178 contains provisions on holding an invoice in order to exercise the right of VAT deduction, and Articles 241 to 249 contain provisions on how invoices should be stored. Because of these EU-statutes, the national rules in various EU countries are almost entirely harmonised.

In the Finnish VAT Act (arvonlisäverolaki (AVL), 1501/1993) the applicable legal provisions are in Chapter 22 (sections from § 209 a to § 209 t). The provision on the necessity for the purchaser to hold an invoice in order to have the right to deductions is found in § 102 a of the Finnish VAT Act.

2 Accounting and the use of accounting vouchers

As provided in the Accounting Act (kirjanpitolaki, 1336/1997), anyone who operates a trade or business must keep an accounting system. As provided in the Government decree on the assessment procedure for self-assessed taxes (asetus oma-aloitteisten verojen verotusmenettelystä, 1355/2016), VAT liable persons, concerned by the requirement to maintain an accounting system, must enter the transactions that have an impact on the amount of VAT in their books in chronological order, so as to facilitate the calculation of how much VAT must be paid and how much can be deducted. The point in time for making the entry is the same as the time when the VAT payable or VAT deductible relating to the transaction must be taken into account when counting the total VAT payable for the tax period concerned (§ 1, subsection 1 of the decree on assessment procedure for self-assessed taxes).

VAT-liable persons must organise their accounting systems in such a way that the information needed for ascertaining the right amounts of VAT can be obtained. The act on the assessment procedure for self-assessed taxes (laki oma-aloitteisten verojen verotusmenettelystä, 768/2016) also requires that accounting entries for business transactions, for VAT payable and for VAT deductible, must be based on vouchers within the meaning of Accounting Act, and additionally taking into account the provisions on invoices and other vouchers of the VAT Act (§ 26, act on the assessment procedure for self-assessed taxes).

It is permissible to book the entries in a separate ledger for invoicing, or in other separate ledgers for various purposes, on the condition that there is a clear and transparent linkage between such ledgers and the main accounting books that the Accounting Act refers to. Any purchases and sales with VAT rates that vary must be separable from one another without difficulty in an accounting system arranged by subject matter (§ 1, subsection 2 of the decree on assessment procedure for self-assessed taxes).

Under Accounting Act, if buyers make payments in cash, not by bank transfer, the received amounts must be recorded for each date without delay. Other transactions and combination entries from subledgers to the general ledger may be recorded on a monthly basis or a similar basis, unless more precise chronological recording is required elsewhere in the law or other provisions issued thereunder. Other transactions must be recorded in due time in order that the reports required in the Accounting Act, or in any other act, to be submitted to the authorities for taxation or other purposes can be made based on up-to-date accounting records. In addition, whoever is responsible for the accounting of the corporation or the foundation must be able to fulfil his or her control duty.

VAT liable persons, concerned by the requirement to maintain an accounting system – and who have the VAT period of one month or the VAT period of one calendar quarter – must make the entries affecting VAT payable and the entries affecting VAT deductible on a month-to-month basis, by the 12^th day of the second month after the VAT period. Correspondingly, VAT liable persons who have the accounting obligation – and whose VAT period is the calendar year – must make the entries affecting VAT payable and VAT deductible as the Accounting Act requires, however on a month-to-month basis to be complete by the 28^th day of February the year after the VAT period (§ 2 of the decree on assessment procedure for self-assessed taxes).

VAT liable persons who are not obligated to maintain an accounting system must keep such records that the information required for the imposition of VAT can be obtained from them. Such records must be based on dated and numbered vouchers or documents that fulfil the requirements on documentation and vouchers of the VAT Act (§ 27, subsections 1 and 2, of the act on assessment procedure for self-assessed taxes).

Foreigners operating a trade or business from a fixed establishment located in Finland are concerned, where applicable, by the obligation to maintain an accounting system (conclusion of the Finnish Accounting Standards Board, no 1275/1994). Foreigners that have a Finnish VAT registration due to their operation in Finland but who do not have a fixed establishment in Finland must keep other records (§ 27 of the act on assessment procedure for self-assessed taxes). It has no importance whether the foreigner is liable to VAT because of the provisions of § 9, VAT Act or because an application was submitted in order to be registered as a person liable to VAT. The representative of a foreigner (who has become VAT liable in Finland on application) is also responsible for the fulfilment of the foreigner's obligation to keep records.

The Finnish Accounting Standards Board has issued a guide on 31 October 2017 on the principles of VAT accounting. The Board also released a general guideline on 1 February 2011 regarding accounting methodology and materials.

3 Invoice as a concept

The VAT Act refers to the concept of "invoice". In the VAT Act and in this guidance, the meaning of "invoice" extends itself, as provided in the VAT Directive, not only to traditional invoices but also to other vouchers and documents acting as invoices. By extension, "invoice" also refers to all corrective invoices, vouchers and notices that contain a change, or contain a reference to an original invoice. Invoices may be handed to the purchaser as paper documents or electronically (if the recipient has given acceptance to electronic invoicing). Electronic invoices means invoices that are given and received in electronic format. It is not permissible for EU countries to lay down any specific conditions for electronic invoices. Sellers may combine several sales of goods and services into one single invoice that covers all of them.

Invoices may consist of several separate documents. For this reason, the actual invoice that the seller gives to a purchaser does not have to contain all the VAT details required by law if they are given on another documentation that has been made available to both the purchaser and the seller. It is required that the actual invoice contains a clear reference to such other documentation. For example, there may be a reference to a dispatch note that contains information on the goods sold to the purchaser. It is important that all the required VAT information is shown on the combined set of documentation that consists of the invoice and its referenced materials. However, the above rule cannot be applied to distance selling, to intra-community selling of goods and to any selling of goods or services in other EU countries subject to VAT reverse charge, making the purchaser liable to pay the VAT. The invoices given for such selling must invariably contain all the required details.

However, VAT rules do not require that independent contractors (in the building sector, for example) enclose their current contract with every invoice. It is sufficient to refer to the contract by its number and date, and set out the ordinal number of the instalment being billed on the invoice. As for VAT-taxable transfers of rights to use immovable property, the lessor's and the tenant's agreement together with the related bank forms may make up the "invoice". Alternatively, it is permissible to include all the required details in the rental agreements and not send any bank forms at all.

As for credit card companies, the invoices that a credit card company gives are not treated as invoices given by the seller of goods or services. This means that the itemisation printed on the card-company invoice of the cardholder's purchases is not an invoice that entitles to VAT deductions. Instead, to get a deduction the purchaser must have the invoice from the actual seller of the goods/services.

It is not required that the heading of the invoice says "Invoice". For purposes of VAT, the requirements of an invoice are only fulfilled when the document's information content and its references to other documentation are as they should be.

When a seller sends a set of several electronic invoices to one purchaser, the required details that are shared by all the invoices in the set do not have to be repeated more than once if they have been made available in full – either so that the purchaser can reproduce them or so that the seller can do so.

In certain circumstances, government units that engage in public procurement must be able to receive electronic invoices formatted in the European Standard for eInvoicing. Starting 1 April 2020, both public government units and operators of a trade or business will also have a right to demand such invoices (Act governing the electronic invoicing of public government units that engage in public procurement and operators of business (Laki hankintayksiköiden ja elinkeinonharjoittajien sähköisestä laskutuksesta, 241/2019)). However, the above mentioned legal rule is not applicable if electronic invoicing could lead to disclosure of confidential information or if it could serve to jeopardize national security. The above mentioned legal rule is not applicable on invoices issued by a private individual.

4 Which EU country's invoicing rules are applicable?

4.1 The general rule

If the country where the selling takes place is Finland (under the provisions of Chapter 5, VAT Act) the rules on invoicing laid down by the Finnish VAT Act are applicable.

4.2 Exceptions from the general rule

The provisions of the VAT Act on invoicing are also applied in the following situations when the seller supplies goods or services from a fixed establishment located in Finland, or if the supply is not carried out from any fixed establishment, if the seller's domicile is in Finland, and:

• the seller issues an invoice for the sale of the goods or services, which takes place in another EU country, and for which the purchaser is liable to pay VAT due to a reverse-charge mechanism, i.e. the seller has no domicile in the EU country concerned, or no such fixed establishment that is being used for the purpose of selling the goods or services
• the place for the selling of the goods or services – the place of supply – is a country outside the EU.

The fixed establishment referred to above is the one belonging to the seller, where either goods or services are supplied, making use of the personnel and other resources of that fixed establishment.

The VAT Act's invoicing rules are not applicable to selling in Finland if it is carried out by a seller established in another EU country and for which the purchaser is liable to pay VAT, due to a reverse-charge mechanism, and for which the seller issues the invoice. If the purchaser is the party that writes up the invoice, the provisions of the VAT Act become applicable. A "seller established in another EU country" means a seller that has a fixed establishment through which the selling is carried out (supply of goods or services) located in another EU country. If the selling is not carried out from a fixed establishment, "seller established in another EU country" means a seller whose domicile relating to the seller's business activity is located in another EU country.

The VAT rules of the "EU Member State of identification" are applied on invoicing when selling radio and TV broadcasting, electronically provided services, and telecommunications services covered by the VAT special scheme (Mini One Stop Shop). For more information, see the "VAT Special Scheme" – Arvonlisäveron erityisjärjestelmä guidance of the Tax Administration (in Finnish and Swedish).

4.3 Summary of the different circumstances where Finnish VAT Act is applied

In the following, a "VAT liable person established in Finland" is one who supplies the goods or the services from a fixed establishment located in Finland. If the supply of goods or services is not carried out from any fixed establishment, a "VAT liable person established in Finland" means that the person's domicile (for the operation of the VAT liable person's business) is in Finland.

The invoicing rules laid down by the Finnish VAT Act are always applied when:

• a VAT liable person, established in Finland, sells goods or services and the country of supply is Finland
• a VAT liable person, established in Finland, sells goods to another EU country as an intra-Community supply
• a VAT liable seller, established in Finland, issues an invoice for a supply of goods or services carried out in another EU country on which VAT reverse charge is applied, and the purchaser must pay VAT
• a VAT liable purchaser, established in Finland, writes up an invoice for a supply of goods or services carried out by a seller established in another EU country on which VAT reverse charge is applied, and the purchaser must pay VAT
• a VAT liable person, established in Finland, sells goods or services and the country of supply is outside the EU
• a seller that applies the VAT special scheme and has selected Finland as its Member State of identification sells a service for which VAT is charged within the special scheme
• a seller from outside the European Union sells a good or a service and Finland is the country of supply.

"A seller outside the European Union" is a seller who is not established in EU territory, i.e. one who does not sell goods or services through a fixed establishment located in the EU. If there is no selling through a fixed establishment, a "seller outside the European Union" means a seller who is not established in the territory of the European Union, i.e. one whose domicile is outside the EU.

4.4 Examples

5 The seller's obligation to issue an invoice

5.1 Introduction

Sellers must issue an invoice for the sales enumerated below in 5.2 (referring to § 209 b, VAT Act). For other sales, sellers do not have to issue an invoice that fulfils the requirements of the VAT Act concerning the information content of an invoice. However, sellers must write up a voucher of the sale, for purposes of accounting or recordkeeping. If sellers issue several invoices for just one sale, reference must be made to the earlier invoices that concern it.

Sellers must issue invoices to purchasers who are operators of a trade or business, or to purchasers who are legal persons not operating a trade or business, for any taxable sale of a good or a service. Invoices must also be issued for non-taxable sales in case the purchases, made by the seller and relating to such non-taxable sales, give the seller the right to VAT refund (for more information, see 5.2.2 below). Additionally, sellers must issue an invoice for certain sales, which under the law are exempt from VAT in Finland, when the place of supply is another EU country (for more information, see 5.2.3 below).

Invoices must also be issued by sellers engaged in distance selling, by sellers of new means of transport to individuals in other EU countries, and by sellers of healthcare services and social services (when the purchasers are municipalities). Invoices must also be issued for advance payments, and for adjustment entries and compensations.

In addition, the obligation of the seller to issue an invoice also concerns a transfer of a business enterprise or its part, referred to in § 19 a, VAT Act.

The obligation to issue an invoice does not concern advance payments for goods sold as intra-Community supply. The time when an invoice must be issued for goods sold as intra-Community supply is by the date when the goods have been delivered.

Sellers who choose to do so may issue invoices also for the sales transactions for which no invoicing obligation exists.

5.2 For which sales transactions must you issue an invoice?

5.2.1 VAT-taxable selling

Sellers must give invoices to purchasers who are operators of a trade or business, or to purchasers who are legal persons not operating it, for any taxable sales of goods or services. "Taxable" refers to the selling for which VAT must be paid under the provisions of the VAT Act. In addition, sales are also taxable when the purchaser, due to a VAT reverse-charge mechanism, is the party that must pay VAT.

When the purchaser has made a self-billing invoice, it is regarded as if the seller has issued it, if the purchaser and the seller have agreed on this arrangement and if there is a way for the seller to give approval to the self-billing invoice (for more information, see 5.4 – Self-billing invoices).

5.2.2 VAT-exempt selling

Sellers must issue invoices to businesses, or to legal persons who do not operate a trade/business, for the following VAT-exempt supplies (i.e. sales):

• sale and brokerage of investment gold (§ 43 a, VAT Act)
• sale of printing of a newspaper or periodical to a corporation that promotes for the public good (§ 56, VAT Act)
• supply of maritime vessels of at least 10 metres in length - sale, renting out and chartering of such vessels and work performed (including work materials) on such vessels (§ 58, VAT Act)
• sale of gold to central banks (§ 59.4, VAT Act)
• sale of goods within international trade (§ 70, § 70 b, VAT Act)
• sale of services within international trade (§ 71 to § 72, VAT Act)
• intra-Community supply of goods (§ 72 a to § 72 c, VAT Act)
• sale of goods and services to diplomatic and comparable missions located in other EU countries, to offices of career consuls, to international organisations, to bodies of the EU and to the armed forces of NATO member states located in other EU countries (§ 72 d, VAT Act)
• sale of motor vehicles in certain situations (§ 72 e, VAT Act)
• sales relating to warehousing arrangements, free zones and free warehouses (§ 72 h, VAT Act).

For other VAT-exempt sales that are domestic, sellers do not have to issue an invoice that fulfils the information requirements of the VAT Act.

5.2.3 Sales defined as VAT-exempt in Finland, carried out in another EU country

Sellers must issue an invoice for certain VAT-exempt sales to businesses, or to legal persons, when the sale is carried out in another EU country. The VAT-exempt sales concerned by this rule are:

• the selling carried out as VAT-exempt selling by corporations that promote the public good (§ 4, VAT Act)
• the selling carried out as VAT-exempt selling by religious societies (§ 5, VAT Act)
• sale of immovable property (§ 27, VAT Act)
• sale of health care and medical care services, including some related services (§ 34 and § 36, VAT Act)
• sale of goods and services in the form of social welfare, and relating to education (§ 37, § 39, VAT Act)
• the payment of fees to performing artists, and sale of certain immaterial rights (§ 45, VAT Act)
• sale of bank notes and coins which are current tender, organisation and brokerage of lotteries, services consisting of the opening and management of graves as well as other services ancillary to the actual cemetery activity, and of self-picked wild berries and mushrooms (§ 59.1-3 and § 59.5-6)
• sale of goods and performance of work, if the seller is a blind person; sale of goods and services subject to restrictions on deduction (§ 60 and § 61).

There is no obligation to issue an invoice if the above goods or services are sold outside the European Union.

5.2.4 Distance selling and the selling of new means of transport to a private individual

Sellers must give an invoice for distance selling and for selling a new means of transport to another EU country to a purchaser who is a private person (§ 63 a, VAT Act and § 72 b, subsection 4).

5.2.5 VAT-exempt selling to municipalities

Sellers must issue an invoice to their municipal customers when selling VAT-exempt goods and services in the form of health care, medical care or social welfare, for which the municipal customer is eligible to a refund of a calculated tax (§ 130 a, VAT Act).

5.2.6 Advance payments

Sellers must issue an invoice to the purchaser for any advance payments with the exception of advances relating to intra-Community supply of goods. Advance payments – also known as prepayments – are compensations, which the seller receives prior to the delivery of goods or supply of services. If the entire amount has not been invoiced in advance, sellers must also give an invoice when they complete the delivery of goods or supply of services. In the interest of clarity, it is recommended that sellers only invoice the remaining amount at this stage. As an alternative, the previously invoiced advance payments may be listed on the final invoice. However, this must be done in such a way as to avoid confusion, and reference must be made to the earlier invoices issued.

5.2.7 Adjustment entries

Sellers must give purchasers an invoice for any adjustments, such as annual and turnover discounts, purchase and sales rebates, surplus refunds and other such adjustment entries and returned packaging and transport appliances, if they concern sales discussed above from 5.2.1 to 5.2.5 of this guidance, unless the adjustments have already been taken into account in a previous invoice. These invoices do not have to contain information on unit prices.

No invoice must be issued if the adjustments, compensations or similar amounts have already been taken into account in a previously given invoice, either directly in the price of a good or service or otherwise.

Sellers must issue an invoice also in cases where the price has changed for some other reason after the initial invoice was issued, or if the entire sales transaction is cancelled.

5.3 Business operators with a group registration for VAT and reindeer owners

The invoicing rules of the Finnish VAT Act are applied to the reindeer owners, belonging to a reindeer herding co-operative, within the meaning of the Reindeer Husbandry Act (poronhoitolaki, 848/90). Within a so-called "group of persons liable to VAT", or between reindeer owners within the same herding co-operative, there is no requirement to issue VAT invoices.

5.4 Self-billing

Purchaser may in some cases issue an invoice on behalf of the seller. The circumstances relevant to self-billing are discussed below. Self-billing invoices are common practice in several industries, including the procurement of timber and in various sectors where business enterprises buy goods from primary producers. However, the seller is always responsible for the accuracy of the invoice. When the purchaser has issued an invoice, it is regarded as if the seller has issued it, if the purchaser and the seller have agreed on this arrangement and if there is a way for the seller to give approval to each invoice that the purchaser issues.

The seller may have agreed on the arrangement tacitly, i.e. entered into an agreement which is implied or inferred without direct expression, as may be the case in some sectors of business. Purchasers must give a copy of every self-billing invoice to the seller for approval. The approval of invoices by the seller may go on tacitly, as well: if the seller does not give comment regarding the contents of the self-billing within a reasonable time, the seller is then treated as having approved it.

If the seller and the purchaser have agreed upon the issuing of invoices and on their approval process as described above, the invoices that the purchaser issues are treated as invoices that the seller has issued, in reference to the VAT Act. If the self-billing is not accurate in the seller's opinion, the seller must issue a replacement invoice that fulfils the requirements of the VAT Act. This invoice must contain a reference to the original self-billed invoice that the purchaser had issued.

5.5 Outsourced invoicing

Sellers can make arrangements with a service provider to have their invoicing work "outsourced" to a third party. However, the seller still continues to be accountable for compliance with the invoicing rules of the VAT Act.

5.6 The time limit for issuing an invoice

When a seller has sold goods as an intra-Community supply, the seller must issue an invoice by the 15^th day of the calendar month following the supply of the good.

When a seller supplies services and the VAT general rule of another EU country, corresponding to § 65 of the Finnish VAT Act, applies, the seller must give the purchaser an invoice by the 15^th day of the calendar month that follows the month when the services were supplied.

The issue date of an invoice is the date when the party that issues it has made it available to the other party. For example, an invoice in electronic format can be presented to the recipient directly: by e-mail or by delivery via one or more service providers. It may additionally be posted on a web portal in order to make it available to the recipient.

The VAT Act does not define other time limits for issuing an invoice except the ones discussed above.

6 Information shown on an invoice

6.1 Requirements for the information content on an invoice

The following information is required (under § 209 e of the VAT Act):

• date of issue
• a unique sequential number
• seller's VAT identification number
• purchaser's VAT identification number under which the purchaser received a supply of goods or services on which reverse charge applies, or received a supply of goods as intra-Community supply
• names and addresses of the seller and the purchaser
• quantity and nature of the goods supplied, or the extent and nature of the services supplied
• the date on which the supply of goods or services was made or completed, or the date when a prepayment was made
• base of VAT per VAT rate or exemption, unit price exclusive of VAT, and any discounts or rebates if they have not been included in the unit price
• the VAT rate applied
• the VAT amount payable
• in the case of an exemption, reference to it, or reference to the applicable provision of the Finnish VAT Act, or to that of the VAT Directive
• where the purchaser is liable for the payment of the VAT, the mention "Reverse Charge"
• where the purchaser, instead of the seller, issues the invoice: the mention "Self-billing"
• information on a new means of transport
• where one of the special arrangements applicable to second-hand goods, works of art, collectors' items and antiques is applied, the mention "Margin scheme – Second-hand goods"; "Margin scheme – Works of art" or "Margin scheme – Collector's items and antiques", respectively
• where the margin scheme for travel agents is applied, the mention "Margin scheme – Travel agents"
• where taxable investment gold is being sold, mention of it
• if the invoice is a correction or change to a previous invoice, reference to that invoice.

The required VAT information may be written on the invoice in any language. The Tax Administration may ask for a translation during a tax audit or other control procedure.

For more information on the required details, see 6.1.1 to 6.1.18.

6.1.1 Date of issue of the invoice

The date to be recorded on the VAT invoice may be, for example, the date when the seller gives the invoice to the purchaser. "Date of issue" may also be the date when the invoice is prepared or printed out, etc.

6.1.2 The unique number, running in sequence

The requirement to have a unique sequential number on an invoice is based on the need to be able to unquestionably identify the invoice. In addition, with a system of sequential numbering, a missing invoice can be detected. Invoices issued during the same accounting period cannot have the same invoice number. VAT liable persons are free to use several series of sequential numbering at the same time if desired. The unique sequential number does not have to consist of digits only – characters other than digits are acceptable as well.

If a self-billing arrangement has been made and the purchaser instead of the seller issues the invoices, the seller should have the invoices in a series of sequential numbering. The Tax Administration recommends that purchasers engaging in self-billing use specific series of unique sequential numbering for every seller.

In exchange situations one VAT invoice can include both selling and buying of goods and services. This is particularly common in the retail sales of motor vehicles, where the seller prepares an invoice that shows the sale of both the original vehicle and the used vehicle (that the customer gives to the seller). Because such an exchange is treated as two separate transactions, the company that sells the motor vehicle must assign a unique sequential number to its own sales invoice and to the invoice given by the customer (the seller of the used vehicle), in case the latter is liable to pay VAT on this transaction. As a result, two sequential numbers must be mentioned on the invoice. The information requirements of VAT invoices do not have to be fulfilled if the customer (the seller of the used vehicle) is a private person, or if the used vehicle had been in use for non-VAT-deductible purposes.

When preparing an invoice for exchange situations as described above, it is prohibited to merely show the "net" amounts so as to offset the prices and the taxes. This means that it is not allowed to only show the difference between the selling price and the purchasing price and the difference between the VAT of the selling price and the VAT of the purchasing price.

6.1.3 Seller's VAT identification number

Under the provisions of the Business Information Act (yritys- ja yhteisötietolaki, 244/2001), every business enterprise must have a Business ID. It is required of a business enterprise to enter its Business ID in the documents relating to the conduct of business. If goods are supplied as an intra-Community supply, or if services are supplied and the VAT general rule on the place of supply applies (§ 65 of the VAT Act), the seller must also enter its VAT number on the invoice.

For business enterprises with a Finnish VAT registration, the VAT number is the seller's Business ID with the letters "FI" added in front and with the second-to-last character, the hyphen, removed. In addition, sellers must enter their VAT number on the invoice when a distance sale of goods to the territory of another Member State is being made, and likewise, when a new means of transport is being sold to another EU-country, even if the purchaser is a non-VAT-liable person (e.g. a private person).

Further guidance released by the Tax Administration on distance selling and on selling new means of transport:

• "Rules and procedures regarding distance selling to non-taxable persons and VAT" – Kaukomyyntiä koskevat arvonlisäverosäännökset Suomessa
• "VAT instructions on new means of transport" – Uusien kuljetusvälineiden arvonlisäverosta – ohje arvonlisäverovelvollisille

6.1.4 The purchaser's VAT identification number

Sellers must enter the VAT identification number of the purchaser on the invoice if the purchaser is liable to VAT because of reverse charge, or if the invoice is for an intra-Community supply of goods.

6.1.5 Names and addresses of the seller and the purchaser

It is required that the invoice shows the name of the seller or if there are several sellers, the names of the sellers. As a purchaser must be entered the name to whom the goods or the services are being sold to. The invoice must be directed and addressed to the purchaser, or to several purchasers, if there are more than one of them. For example, the purchase of a factory machine can be shared, so that two business enterprises buy the machine together. In this case, both buyers' names must be entered as the purchasers on the invoice. Both business enterprises receive the right to deduction of VAT only if both their names are shown on the invoice. If the invoice does not indicate the proportions of how the two businesses are sharing the newly purchased machine, the assumption is that each gets one-half of it.

Invoices must contain the seller's and the purchaser's company names, or auxiliary names, in the version entered in the Trade Register. If the seller or purchaser is an enterprise that is not registered in the Trade Register, the seller or purchaser uses the version of the name that has been recorded in the registers of the Tax Administration.

When a business is acting on behalf of someone else, i.e. acting as an intermediary, the invoice for the good or service being brokered must indicate the actual seller's name.

If spouses engage in primary production, they are treated as a partnership for purposes of VAT. For practical reasons, they are registered only under one spouse's name in the VAT register, and the Business ID is issued to this spouse only. Invoices must show the name of the spouse who is VAT registered, and they may additionally show the name of the other spouse.

If the seller's or purchaser's name in the Trade Register is Oy Acme Ab, it is permissible to display it on the invoice as "Acme Oy", "Acme Oy Ab", "Oy Acme" or "Acme Ab". What is important is that the seller's or purchaser's names must be set out clearly, so they cannot be confused with another business enterprise.

In addition to the seller's and the purchaser's names, e.g. the name of the employee preparing the invoice may be included.

If the seller has several establishments, and consequently, more than one address, the seller can choose the most convenient address to be shown on the invoice. The Tax Administration recommends that sellers use the address of their main establishment on invoices, or alternatively, the address of the establishment where the goods or services are supplied. A coded address can substitute the actual address text if both the seller and the purchaser, and the Tax Administration as necessary, know how to decode the coded addresses in order to identify the parties of the transaction.

The purchaser's address must be mentioned on the invoice in full. Instead of a street address, it is permissible to use a P.O. Box or an address containing the purchaser's specific postal code. The invoice can be sent to an address that differs from the purchaser's address on the invoice: for example, to an accounting firm, to a paper-scanning service firm, or to the subsidiary of a group enterprise that provides centralised services for the group. In this case, the invoice must show two addresses: the purchaser's actual address and the delivery address. It is permissible to show the information on the purchaser's actual address elsewhere on the invoice, not necessarily in the usual address field.

6.1.6 Quantity and nature of the goods or the extent and nature of the services

Goods should be identified on the invoice by their commercial description or by their name. Services should be identified by mentioning the types of the services. Alternatively, the invoices can show descriptions of the goods and services in a coded format if the supplier, purchaser and the Tax Administration, as necessary, have a decoding key at their disposal. If such a decoding key is separately provided, it must be stored in the same way as the actual invoice itself. The description may alternatively be made by a reference to a contract, to an order, or to a product catalogue sent to the purchaser.

The mention about the extent of the services is only necessary in cases where the invoice does not otherwise give details on the content of the services being invoiced. For example, an invoice for the rental of goods indicates the extent of the service by showing details on the rental period – in other words, the point in time when the services are supplied.

The Council implementing regulation (EU) No 1042/2013 of 7 October 2013, amending a previous EU regulation, sets out some specific requirements for information to be shown on invoices for electronically supplied services in situations where the services are supplied through a telecommunications network, an interface or a portal (such as a marketplace for applications). Under Article 9a, the invoice issued or made available by each taxable person taking part in the supply of the electronically supplied services must identify such services and the supplier thereof. In addition, the invoice or receipt issued or made available to the customer must identify the electronically supplied services and the supplier thereof. This concerns situations where the taxable person has explicitly indicated the actual provider of the electronically supplied services as the supplier of these services, and where the taxable person is not acting in his own name on behalf of the actual provider. For more information, see guidance "VAT treatment of telecommunications, broadcasting & electronic services" – Tele-, lähetys- ja sähköisten palvelujen arvonlisäverotus (in Finnish and Swedish).

6.1.7 Supply date of goods/services or prepayment date

In order to ensure that the VAT can be recorded inside the correct tax period, the invoices must contain the supply date of goods or services, or the date when a prepayment was made. Invoices for services should at least indicate the month when the services were supplied if no exact supply date can be determined. If supplies of goods are made under FOB or CIF conditions, the date when the ship sails can be treated as the date of supply.

When the supply date of goods or services is the same as the date of the invoice, the supply date does not have to be mentioned separately on the invoice. If possible, recommended format is: "invoice date/supply date".

In the same way, if possible, in the case of prepayments, the invoice should show the actual date of payment. However, the final invoice for the transaction does not have to show the dates when the seller had received the prepayments. The final invoice must show the supply date of goods or services.

Some supplies of goods or services are made on a continuous basis. In this case, the compensation is related to the period of time – an example of this is rental service. However, a one-off sale so that the customer pays in several instalments is not a continuous supply. In the same way, if the compensation is not based on time but quantity, it is not a continuous supply. This means that a contract to construct a building, for example, is not treated as a continuous supply of goods or services.

In the continuous supplies of goods or services, the supply is regarded to take place on the expiry of every period of account relating to such supply. The supply date on the invoice is the expiry date of such period. For clarity, the invoice can additionally show the length of the invoicing period.

If there is no exact supply date for continuous supply of goods or services, the mention on the invoice is the time period during which the sale is carried out.

If intra-Community supply is in question, and goods are delivered on a continuous basis over a period longer than a calendar month, the goods are regarded as being supplied on expiry of each calendar month.

6.1.8 Base of VAT, unit price exclusive of VAT, and discounts and rebates

The base of VAT means the price received from the sale without the VAT. The seller must mention the VAT bases separately per VAT rate or exemption on the invoice. In addition, the invoice must show the unit price, without VAT, of the good/service. Examples: In a piecework contract, the contract price is the unit price. In selling electricity, the unit price is the price of electric power per kilowatt-hour. Unit prices may occasionally be defined as for "100 pieces" of the goods – in this case, the batch of 100 pieces forms the unit price. Similarly, a package of products may occasionally be defined as a unit, and in this case, the price of such a package is treated as the unit price. If the rates of VAT vary among the goods and services included in a package treated as one unit, the invoice should break down the applicable VAT rates, displaying the base of VAT per each VAT rate, and the amount of VAT either as a sum total or as a breakdown per each VAT rate applied. If one invoice covers both taxable and tax-exempt selling, the invoice must keep these categories separated.

If applicable rebates or discounts are not included in the unit price itself, the invoice must specify them, either as percentages or as amounts of money. Possible ways to specify them are per every good/service or as a sum total from the invoice total at the end of the invoice, and by presenting them per different VAT rates that are involved. The requirement to spell out rebates or discounts on the invoice does not mean that exact details on them should be included line-for-line. The rebates and discounts can be shown anywhere on the invoice. The requirement only concerns actual rebates and discounts given to the purchaser at the point of time when the invoice is issued. If the seller gives them afterwards, the seller must issue a new invoice document or credit note.

In general, the seller must issue a separate invoice when the purchaser becomes entitled to the rebates, discounts, etc., that were agreed with the purchaser as being subject to certain conditions at the time when the original invoice was issued. However, sellers need not give out separate credit notes for the usual commercial cash discounts, such as 2% for 14 days, and 0% for 30 days (in Finnish: "14 päivää -2%, 30 päivää netto" / in Swedish: "14 dagar -2%, 30 dagar netto"). The amount of the usual commercial discounts is generally modest and so is its impact on the VAT relating to the sale. Nevertheless, the invoice should spell out both alternative total values of the invoice. As a minimum, the invoice should at least show the total amount of the cash discount itself including VAT. The invoice that includes a cash discount can be recorded in the accounting system so that to first use its full amounts of tax base and VAT payable, without subtracting the discounts, and afterwards when the discount has been used, to make separate entries specifying both the discount and its VAT effects. Therefore, the seller must ensure that the invoice and the payment can easily be traced back to one another so that the seller can record and pay the right amount of VAT. The purchaser can make his accounting records in the same way as the seller. In the same way, the purchaser must ensure that the purchase invoice and the money paid out to settle it can easily be traced back to one another so the right amount of VAT is deducted.

If a credit note is issued to the purchaser in order to indicate an annual discount, the period concerned by the discount must be set out. There is no need to refer to the invoices themselves. It is sufficient to indicate the time period also if the rebate only relates to a specific product family.

A reference to the original invoice, through which a business enterprise has supplied returnable packages and transport appliances, might be impossible in practice. For this reason, the requirement is to include the reference if it is possible.

If the purchaser is liable to VAT on the sale (reverse charge), the invoice must show the base of VAT separately for each type of goods or services sold, instead of the information required in the provisions of § 209 e.8, § 209 e.9 and § 209 e.10 of the VAT Act. In this case, the following do not include on the invoice:

• the base of VAT per VAT rate or exemption, unit price exclusive of VAT and discounts or rebates (§ 209 e.8 of the VAT Act)
• the VAT rate applied (§ 209 e.9 of the VAT act)
• the VAT amount payable (§ 209 e.10 of the VAT act).

6.1.9 The VAT rate

If the seller must pay VAT on the sale, the invoice must show the VAT rate applied on the sale of goods or services. If one invoice covers several goods/services with VAT rates that vary, the invoice must show each applied VAT rate. If VAT reverse charge is applied, the purchaser must pay the VAT and the invoice must not show the VAT rate.

6.1.10 The VAT amount payable

The VAT amount payable means the VAT that the seller must pay for the sale, or part of it, being billed on the present invoice; under the provisions of VAT Act. The invoice must show the sum total of VAT that the seller must pay. The VAT sum does not have to be mentioned per different VAT rates, because this information can be counted from the other details as necessary. However, to show a transparent breakdown of the VAT per every rate of VAT is often useful.

It is important not to include any amounts of VAT in the invoice that have already been shown on a previous invoice, unless the invoice is a correction, or a replacement of an earlier invoice. Sellers of second-hand goods, works of art, antiquities and collectibles under the VAT margin scheme are not allowed to mention the amounts of VAT on the invoices. If the purchaser must pay VAT on the sale, the invoice must not show a VAT amount. Instead, it must show the mention "reverse charge".

The VAT amount must be expressed with two decimals. Usual arithmetical rules apply for the rounding of uneven values: the last decimal digit to keep is increased by one, if the next digit is 5 or more. Rounding should only concern the final amount of the invoice.

The VAT amount must be expressed in the local currency of the EU country where the sale is carried out. Amounts in foreign currencies are converted into euro by applying the latest sales rate published by a commercial bank or by the European Central Bank at the time when the liability to pay VAT arose (§ 15 or § 16 and § 80 a of the VAT Act). However, the time of the invoice or the time when the payment has accrued is the decisive time of the exchange rate to be used, if the VAT is assigned to the month of invoicing or to the month of payment. If domestic sales in Finland are made in a non-euro currency, the seller must enter the VAT amount payable in euros on the invoice.

Sellers that have no VAT registration are not allowed to include mention of VAT or rates and amounts of VAT on their invoices. However, if the authorities are currently processing the seller's application for VAT registration, the seller is entitled to indicate the amount and rate of VAT on the invoice on condition that the seller also spells out the fact that VAT registration has been applied for and is currently pending. In this case, the mention on the invoice is "VAT registration pending" – "alv-rekisteröinti vireillä". To have the right to VAT deduction on this invoice, the purchaser must check that the seller is successfully registered. This can be checked for example on the ytj.fi website.

If the seller fails to obtain a VAT registration, he must give the purchaser a corrective invoice to replace the invoice issued. Even if the seller lodges an appeal against the decision not to register him for VAT, he must give the replacement invoice.

6.1.11 Mention of a VAT exemption

Giving the reason for an exemption on an invoice is not required – it is sufficient to indicate that a VAT exemption applies to the sale. The invoice may show a simple mention, such as "VAT-exempt supply / Veroton myynti / Momsfri försäljning". There may alternatively be a reference to the specific provision of the VAT Act or the VAT Directive.

Tax Administration's recommendations of entering this information on an invoice is covered in section 6.1.19 of this guidance.

6.1.12 Mention of the VAT reverse charge mechanism

VAT reverse charge means that the purchaser, instead of the seller, is the party liable to pay VAT on the supply (the sale). Reverse charge applies to:

• situations of triangulation, under § 72 g of the VAT Act, as laid down in the provisions of § 2 a, VAT Act, and concerning the second buyer in the triangulation
• supplies of goods and services in Finland by a foreigner, in reference to the provisions of § 9 of the VAT Act
• supplies of investment gold as well as gold material or semi-manufactured gold products of a purity of 325 thousandths or greater to purchasers referred to in § 8 a of the VAT Act
• supplies of emission allowances to purchasers referred to in § 8 b, VAT Act
• supplies to purchasers of construction services or to purchasers of workforce leasing for executing construction services referred to in § 8 c of the VAT Act
• supplies of scrap metal and metal waste to purchasers referred to in § 8 d, VAT Act
• supplies of a service, in accordance with the general rule laid down in § 65 of the VAT Act, between business enterprises established in two different EU countries
• situations of triangulation, where provision of another EU country corresponding to § 2 a, VAT Act, apply to the second buyer's purchases
• supplies carried out by a Finnish business enterprise, on which the provision in another EU country corresponding to § 9 of the Finnish VAT Act apply.

Reverse charge of VAT is applied on the selling in Finland by a foreigner in circumstances where the foreign seller does not have a fixed establishment in Finland and has not applied for Finnish VAT registration. If the foreigner has a fixed establishment in Finland, but this establishment does not intervene in the supply of goods or services in question, VAT reverse charge is applied.

Reverse charge is not applied on situations where the seller is a foreigner and the purchaser is a private person or a foreigner who does not have a fixed establishment in Finland and who is not in the VAT register in Finland (by applying for entry). Supply of construction services taking place from one foreigner to another constitute an exception from the above rule, and the VAT reverse charge mechanism may be applicable (under § 8 c of the VAT Act). Moreover, the VAT reverse-charge mechanism is also not applied on supply carried out by a foreigner if the supply relates to distance selling, passenger transport, or admission to educational, scientific, cultural, entertainment or similar events and to services relating directly to the admission.

The required VAT entry on the invoice is the "reverse charge" mention. Tax Administration's recommendations of entering information on an invoice is covered in section 6.1.19 of this guidance.

The purchaser is entitled to add information to the invoice, if the invoice received from a seller from outside the EU is missing purchaser's VAT number or the mention "reverse charge". When a received invoice has been completed in this way, it must be visible what has been added and what was displayed on it originally. When reverse charge applies, VAT rate or VAT amount must not be shown on the invoice, and the purchaser may not add that information on to it.

Read more on the VAT reverse charge in the construction industry and on supply of scrap metal and metal waste:

• "The VAT reverse charge mechanism in the construction industry" – Rakennusalan käännetty arvonlisäverovelvollisuus (In Finnish and in Swedish)
• "The VAT reverse charge on supply of metal waste and scrap metal" – Metalliromun ja -jätteen myynnin käännetty arvonlisäverovelvollisuus (in Finnish and in Swedish)

6.1.13 The self-billing mention where appropriate

If the purchaser issues the invoice, the "self-billing" mention must be set out either in English or other languages.

6.1.14 Information on new means of transport

The means of transport referred to in this guidance are motorised land vehicles intended for passenger or goods transport, with engine displacements exceeding 48 cc, or power exceeding 7.2 kilowatts, vessels exceeding 7.5 meters in length, and aircraft with maximum permissible take-off weight exceeding 1,550 kilograms.

For more information on the definition "new means of transport" and on supply of new means of transport to another EU-country and on acquisition of such from another EU-country, see the Tax Administration's guidance:

• "VAT instructions on new means of transport" – Uusien kuljetusvälineiden arvonlisäverosta – ohje arvonlisäverovelvollisille
• "A private person buys a new means of transport from another EU country" – Yksityishenkilö ostaa uuden kuljetusvälineen toisesta EU-maasta (in Finnish and Swedish)

The sales invoice of a motorised land vehicle must have the following information on it: Date of supply, date of putting the means of transport into service, displacement of the engine, or power rating of the engine, and accumulated kilometres. If a vessel is being sold, the required information is: Date of supply, date of putting the means of transport into service, and accumulated hours of sailing. Correspondingly, for aircraft: Date of supply, date of putting the means of transport into service, and accumulated hours of flying.

6.1.15 Supplies within the VAT margin scheme

When the seller applies the procedure for second-hand goods, works of art, collectors' items and antiques referred to in § 79 a of the VAT Act, the purchaser is under no circumstances entitled to deduct the VAT that the seller pays for his sales margin. The Tax Administration recommends that the seller enters a mention on the invoice that the selling price includes no deductible VAT.

The "Margin scheme – Second-hand goods", "Margin scheme – Works of art" or "Margin scheme – Collector's items and antiques" mentions must be shown as appropriate.

For further guidance on the margin scheme in Finnish and in Swedish, see "The VAT margin scheme for second-hand goods, works of art, collector's items and antiques" – Käytettyjen tavaroiden sekä taide-, keräily- ja antiikkiesineiden marginaaliverotusmenettely.

6.1.16 Supplies within the margin scheme for travel agents

When the seller must apply the margin scheme for travel agents, referred to in § 80 of the VAT Act, the seller enters a mention "Margin scheme – Travel agents" on the invoice.

For more information, see the Tax Administration's guidance (in Finnish and Swedish) on the VAT margin scheme for travel agents – Matkailualan arvonlisäverotus.

6.1.17 Supplies of investment gold

For more information (in Finnish and Swedish) on the VAT treatment of investment gold, gold material and semi-manufactured gold products, click here. Section 7 of the published guidance contains examples of the required VAT information on invoices.

6.1.18   Required VAT information on changed or corrected invoices

If you introduce changes to an invoice by issuing a new one, the new invoice must include a reference to the invoice you had issued originally. The above rule applies to all circumstances where an invoice is changed. It is important that the reference to the previously issued invoice is unambiguous. The unique invoice number can be used in the reference. If the change has to do with the seller's sales made during a certain period of time, you can make reference to such a period. For example, if you are granting an annual discount to your customer, you should indicate the time period – the year – on the invoice.

If the invoice has to do with distance selling, intra-Community supply or with cross-border selling on which the purchaser is liable to pay VAT, and the original invoice is changed so that a new invoice is issued, the new invoice must contain all required VAT information. In this case, it is not enough just to refer to an earlier invoice.

6.1.19 Tax Administration's recommendations for the VAT information on invoices

The Tax Administration recommends the following:

• When the place of supply is another EU country, and a supply not subject to VAT is taking place, to a business enterprise or to a legal person, the "Reverse charge" mention or a reference to the relevant article of the VAT Directive must show on the invoice. The obligation to issue an invoice concerns the supplies that would be VAT-exempt if they were carried out in Finland. These supplies are mentioned in § 209 b, subsection 1.3 of the VAT Act.
• The mention to set out on invoices for export selling is "VAT 0%, Export of goods", or "§ 70, VAT Act", or "Art. 146, VAT Directive 2006/112/EU".
• The mention to set out on invoices for intra-Community supplies is "VAT 0%, intra-Community supply", or "§ 72 a of the VAT Act" or "Art 138, VAT Directive 2006/112/EU".
• In the case of triangulation within the Internal market, the first seller enters, in the usual way, the purchaser's VAT number and a mention of an intra-Community supply on the invoice in addition to its own VAT number.

After that, the first purchaser – i.e. the second seller – must not only enter its own VAT number, and the VAT number of the second purchaser on the invoice, but also refer to the triangulation scheme: "Triangulation / Kolmikantakauppa / Trepartshandel". In triangulation the mention to set out on the invoice is "VAT 0%" or "§ 63 g, VAT Act" or "Art 141, VAT Directive 2006/112/EU". In addition, the second seller must indicate that the VAT reverse charge is applied with the mention "Reverse charge".

• When goods are transported outside of the EU, and the transporter issues an invoice for his services, the fact that the supply (of the transportation) is exempt from VAT can be stated using the phrase "VAT 0%, Transport of goods outside the EU" or with the "VAT 0%" mention, or "Art 146, VAT Directive 2006/112/EU".
• When goods are imported and the seller of transportation services should indicate that the supply of that service is exempt from VAT, in a situation where the cost of the transportation must, under § 91 of the VAT Act, be included in the tax base of the imported goods, the mention to set out on the invoice is "§ 71.2, VAT Act, transportation services for imported goods".
• When a Finnish business enterprise supplies services for which the place of supply is other than Finland and for which the purchaser is liable to VAT, the Finnish seller must enter the mention "reverse charge" on the invoice. For example, in cases where the services fall into the scope of the general rule (§ 65 of the VAT Act), the mention "Reverse charge, Art 44, VAT Directive" must be shown on the invoice. This applies when the purchaser is from within the EU and also when the purchaser is from outside of the EU.
• If the invoice concerns a transfer of a business enterprise or its part, the invoice must show the phrase "Transfer referred to in § 19 a of the VAT Act / AVL 19 a §:ssä tarkoitettu luovutus".
• When a service provider supplies VAT-exempt goods or services, relating to healthcare, medical care or social welfare, to a municipality, the invoice should show "Supply referred to in § 34, VAT Act / AVL 34 §:ssä tarkoitettu myynti" in the case of health- or medical care, and respectively, "Supply referred to in § 37, VAT Act / AVL 37 §:ssä tarkoitettu myynti" in the case of social welfare.
• When goods or services, which are in use, which only partially entitles to deduction, are sold, VAT must be paid only for the part that entitles to deduction. The invoice must show the amount of VAT to be paid. Additionally, the invoice must show the phrase "Referring to § 61, VAT Act, Goods/services were used partially for not deductible purposes / AVL 61 §:ssä tarkoitettu osittain vähennyskelvottomassa käytössä ollut tavara/palvelu / Varan/tjänsten har delvis varit i bruk som inte berättigar till avdrag – MomsL 61 §".
• In trade between sellers and purchasers in the Åland Islands and the mainland of Finland, when the seller is acting as the agent for its customer, the invoice must separately show the VAT on importation that the seller paid on behalf of the purchaser. Additionally, the invoice must show a phrase indicating that the supply is VAT-exempt – such as "ALV/Moms/VAT 0 %" or "VAT-exempt selling".

6.2 Simplified information requirements on an invoice

The VAT Act § 209 f contains provisions on simplified information requirements on an invoice. Simplified information cannot be applied on intra-Community supply of goods (§ 72 b, VAT Act), on distance sales of goods (§ 63 a, VAT Act) and on supply of goods or services carried out in another EU country on which VAT reverse charge is applied, and the purchaser must pay VAT (corresponding provision of another EU country to § 2 a, or § 9, of the Finnish VAT Act).

Otherwise, simplified VAT information on invoices is acceptable when the total amount of one invoice is no more than €400.

In addition, the simplified rules apply when the invoice concerns retail sales or similar, where almost all selling is made to individuals. In these circumstances, simplified VAT information is enough, even if the total amount (total including VAT on the invoice) exceeds €400. Examples of a sales operation similar to retail include the operation of a kiosk, a shoe repair shop, a hairdresser's or a funeral home.

Simplified VAT information is sufficient for invoices relating to restaurant and catering service and passenger transport with the exception of services that are bought by a buyer that intends to re-sell them on to another customer. Moreover, simplified information is sufficient on the receipts printed out by parking meters and comparable devices.

The following information is required for invoices/receipts under simplified rules:

• the date of issue
• seller's name and VAT identification number (Finnish Business ID)
• quantity and nature of the goods supplied, and the nature of the services supplied
• VAT amount payable per VAT rate, or base of VAT per VAT rate
• if the invoice is a correction or change to a previous invoice, it must contain a reference to the original invoice and information on what has been changed.

Simplified VAT rules allow to only show the prices including VAT on invoices/receipts, if the VAT amount payable is shown. In this case, there is no need to show the base of VAT.

However, it is permissible to include more information on the invoices and receipts than what the VAT Act rules require.

For example, a hotel may issue an invoice – if its value is €400 or less – without the mention of the purchaser's (the hotel guest's employer's) name, but the hotel is allowed to show the hotel guest's (the employee's) name on the invoice although the rules do not require this.

6.3 Other documentation

6.3.1 Memo vouchers and other additional documentation

Requirements on VAT information are laid down in the VAT Act not only for invoices but also for the other documentation if the other documentation has an impact on value-added taxation (Chapter 22 of the VAT Act). More information on this documentation is found below in sections 6.3.2 to 6.3.7 of this guidance.

6.3.2 Details on construction services

When a VAT liable person purchases immovable property or construction service for the purpose of his taxable business, he may deduct the VAT that the seller must pay for construction services performed in respect of the immovable property (§ 103, VAT Act). This deduction requires that the seller gives the purchaser a document that includes details on the VAT amount payable.

This document must at least contain:

• date of issue of the document containing the details
• the names, addresses and Business IDs of the seller and the purchaser
• nature of the supply
• the amount of VAT that the seller must pay.

6.3.3 Details on energy resources

A purchaser may make a deduction for purchased energy resources also when the charge is included in the VAT-exempt rent or other VAT-exempt consideration for the immovable property (§ 111, VAT Act). In the same way, a deduction can be made if the landlord has charged the energy expense separately from the rent. However, only the amount corresponding to the VAT payable on energy resources or fuels purchased by the owner, or the holder of the immovable property, may be deducted. A precondition for the right to deduction is that the seller gives the purchaser a document that includes details on the VAT amount payable for the energy recourses or fuels that the seller has bought.

This document must at least contain:

• date of issue of the document containing the details
• the names, addresses and Business IDs of the seller and the purchaser
• nature of the supply and the calendar month when the supply took place
• the total amount of rent or maintenance charge and the part of it that is attributable to energy costs
• total amount of VAT payable on the energy/fuel that the seller had bought
• mention of the VAT exemption on the sale and the reason for it.

6.3.4 Requirements on documentation and reporting when immovable property is supplied

When the right or obligation to adjust the investment on immovable property is transferred to transferee, both the transferor and the transferee are obligated to submit documentation. The provisions on required contents are found in § 209 k to § 209 m of the VAT Act. For more information (in Finnish and Swedish), see the Tax Administration's guidance "VAT on immovable property investments" – Kiinteistöinvestointien arvonlisäverotus.

6.3.5 Requirements on documentation and reporting in the case of transfer of a business enterprise or part of it

VAT does not have to be paid on the sale or other supply of goods and services when the sale or supply takes place in connection with the transfer of an entire business enterprise, or part of it, to a transferee carrying on the business and beginning to use the goods and services for a purpose which entitles to deduction (under § 19 a of the VAT Act). The transferee must give the transferor a document that establishes that the sold or supplied goods and services will be used for VAT deductible purposes.

In the case of second-hand goods and works of art, collectible items and antiquities, the transferor of business must give the transferee a document that establishes that the requirements laid down in the provisions of § 79 f and § 79 g of the VAT Act are fulfilled.

The transferor must also give the transferee a document on supplied immovable properties (for more information, see section 6.3.4 of this guidance).

The provisions of the VAT Act on invoicing apply to a transfer of a business enterprise or its part referred to in § 19 a of the VAT Act. This means that the documentation on the transfer of a business enterprise or its part must contain the details set out in the § 209 e of the VAT Act. For more information, see section 6.1 of this guidance.

6.3.6 Memorial vouchers on deductions for initial stock and change of purpose of use

When taxable business is started, the VAT liable person may – apart from some exceptions (e.g. immovable properties) – deduct the VAT of the goods or services in his possession, which he has acquired or manufactured subject to VAT, and which are used for purposes which entitle to deduction (deduction for initial stock, § 112.2 of the VAT Act). In addition, the VAT liable person may make a deduction for goods or services, which he moves from non-deductible use to deductible use (change of the purpose of use, § 112.1 of the VAT Act).

The VAT that can be deducted by the VAT liable person is the VAT that had been included in the purchase prices of the goods/services, or the VAT that had been paid when goods had been imported, bought as an intra-Community acquisition, or manufactured. However, the maximum amount deductible must reflect the value of the goods/services on the moment when the VAT liable person performs the deduction.

The VAT liable person must hold an original invoice for the goods/services he has purchased. The VAT liable person must also hold a memo voucher, written up at the time when the goods/services were taken to a deductible purpose.

The memo voucher must at least contain the following information:

• date when the memo voucher is prepared
• name of the VAT liable person
• quantity and nature of the goods and the extent and nature of the services
• the date when the goods/services has been taken to deductible use, unless the date is the same when the voucher is prepared
• the VAT included in the purchase prices or the VAT paid on own use of the goods/services
• reference to the purchase invoice or to the voucher that establishes the VAT paid on own use
• the probable selling price of the goods/services without the VAT
• the VAT rate
• the deductible VAT.

The VAT liable person must prepare a memo voucher for self-manufactured goods and services, which includes the purchase invoices for any goods or services that he had to buy in order to manufacture the goods or services.

If the VAT liable person is a limited liability company, no VAT deduction for initial stock is allowed if the original purchase had been made by a private person (e.g. a shareholder of the company). Under the circumstances, the purchase is not a purchase made by the limited liability company. It is neither possible for a private person to issue an invoice with VAT included to a limited liability company. If goods or services are sold/donated by a private person to a limited liability company, it is not a purchase for the limited liability company that could contain any deductible VAT.

6.3.7 List of goods transported to another EU country for a specific purpose

Under the provisions of § 209 s, VAT Act, a VAT liable person must keep a list of the goods that are transported to another EU country:

• for the purpose of performing work or valuation on the goods, performed in the country of destination of the transport and sold to the VAT liable person, and the goods are returned to Finland after being worked upon
• temporarily for the sale of services by the VAT liable person in another EU country
• temporarily for such purposes, which would entitle to temporary importation procedure with total relief from customs duties, if it were question of an importation from a place outside the European Union.

The list is free-form.

6.3.8 Recommendations

The seller's obligation to issue an invoice is regulated exhaustively by § 209 b of the VAT Act. However, sellers must, in any case, prepare a voucher of the sale for purposes of accounting or recordkeeping (under Chapter 2, § 5 of the Accounting Act, and under § 2 of the Tax Administration's decision on the obligation to keep records – VHp muistiinpanovelvollisuudesta). In addition, sellers may be under obligation to issue an invoice due to legislation in force in another country. Obligation to issue an invoice for a transfer of a business enterprise or its part in accordance with § 19 a, VAT Act is based on § 209 j of the VAT act.

The Tax Administration recommends that the following information is shown on invoices and other vouchers in circumstances where the Finnish VAT Act does not require sellers to issue an invoice:

• If the seller sells goods and services that are VAT-exempt within the meaning of Chapter 4 of the VAT Act, for which no requirement to issue an invoice concerns the seller, the invoice should show what is the good/service sold and what is the provision of the VAT Act that the VAT-exemption is based on. For example, "Supply of immovable property, VAT-exempt, § 27 of the VAT Act" or "Financial services, VAT-exempt, § 41 of the VAT Act".
• VAT is not payable on the sale of goods or services, which are used for purposes of other than those which entitle to deduction. When goods or services, that have been in non-deductible use, are being sold, the invoice should show a mention of it, e.g. "Goods previously used for non-VAT-deductible purposes / Vähennyskelvottomassa käytössä ollut tavara".

The Tax Administration recommends about the documentation:

• When paid expenses relate to consortium's construction work, but some of the expenses are included in the bookkeeping of one of the shareholders in the consortium, the shareholder must give a document about these expenses to the consortium. Examples of such expenses include YEL pension insurance premiums, insurance premiums for cars, and depreciations of machinery and equipment. This way the VAT base of own use of construction services is dictated correctly to the consortium. Read more about value-added taxation of consortia in the construction industry in "Selling of construction services and own use of those services" – Rakentamispalvelun myynti ja oma käyttö arvonlisäverotuksessa (guidance in Finnish and Swedish; link to Finnish version).

7 Obligation to ensure the invoices

Under Accounting Act, vouchers, ledgers and other accounting material must be processed and retained so that their contents can be reviewed without difficulty and printed in a clear written format where necessary.

The authenticity of the origin, the integrity of the content and the legibility of an invoice, whether on paper or in electronic form, must be ensured from the point in time of issue until the end of the period for storage of the invoice. Business enterprises can select freely between any control process that create a reliable audit trail between an invoice and a supply of goods or services.

"Authenticity of the origin" means the assurance of the identity of the supplier or the issuer of the invoice. Both the seller and the purchaser can independently ensure the authenticity of the origin. The seller must ensure that the information on the invoice is true regarding the supply of the goods or services, and the identity of the seller. The seller must also ensure the identity of the party who issues the invoice, if the issuer is the purchaser or a third party. If the purchaser is a business enterprise, as well, the purchaser must be able to ensure that the information on the seller's identity on the invoice is true. In addition, purchasers must ensure that the seller has supplied the goods or services described on the invoice. A typical way to do so is to compare the invoice details with other documents for the same business transaction. A VAT liable person must store the documents that have been used for ensuring for the entire storage time of the invoices.

"Integrity of the content" means that the information content of the invoice has not been altered. Both the seller and the purchaser can independently choose a method they use for ensuring the integrity of the content, or they may mutually agree on a technology, etc., to be used for purposes of integrity checks. These methods must be kept available for the entire storage period of the invoices. However, it is permissible to change the format of the invoice to another. Examples of format changes include the changing of the type of date display, or the changing of the file format to .xml format, etc.

"Legibility" of an invoice means that the invoice must be human-readable.

8 Rules on storage of invoices

A VAT liable seller, operating VAT-taxable or VAT-refundable activity, must keep copies of sales invoices relating to sales of goods or services in the conduct of business, which take place in Finland. A VAT liable seller must also keep received purchase invoices that relate to his VAT-taxable or VAT-refundable business. Regardless of who prepared the invoices, it is the VAT liable person that has the responsibility to store them.

In addition to invoices, a VAT liable person must keep all the documents that contain information affecting the amounts of payable and deductible VAT, including all the invoices or receipts given to private persons.

A business enterprise, which is VAT liable in Finland or in the VAT-register in Finland for VAT-refundable business, must additionally keep the invoices for purchases made in Finland and relating to operations that it conducts in another country (under § 131.1.4 of the VAT Act). The business enterprise must also keep the purchase invoices that relate to purchases for which it is VAT liable in Finland under the reverse-charge mechanism.

A VAT liable person, who is not obligated to maintain an accounting system under the Accounting Act, must store his records in a similar way.

Generally, invoices must be stored in Finland. If the invoices are stored electronically, it is permissible to keep them in another EU country on the condition that users have a computer access to them in real time and without interruptions. In addition, a foreign business enterprise, which does not have a fixed establishment in Finland, can store the invoices in another EU country. However, taking account of the requirements listed in Chapter 2, § 9 of the Accounting Act, it is permissible to store invoices elsewhere.

For purposes of auditing, if you are requested, you must prepare a copy of the machine-readable record that contains invoices and make it available to a person who represents the tax authority and is performing an audit. Sellers of investment gold must, on request, present the materials that concern the identification of their customers and give further details on it for purposes of auditing. The representative of a party who has become VAT liable on application has also the obligation to keep records, to store invoices, and to present the invoices to authorities for purposes of auditing.

As a minimum, the invoices must be stored for a period of six years. The counting of time for the six-year period begins at the start of the year after the calendar year covering the calendar month, to which the taxable event, that the invoices concern, belong to under the rules of periodization. If the VAT liable person's accounting period is not a calendar year and the VAT liable person's tax period is a calendar month, the storage time of invoices is also at least six years. In these circumstances, the counting of time for the six-year period begins at the start of the year after the accounting period covering the calendar month, to which the taxable event, that the invoices concern, belong to under the rules of periodization. Correspondingly, if the tax period of a VAT liable person is a reindeer husbandry year, the counting time for the six-year period begins at the start of the year after the reindeer husbandry year covering the calendar month, to which the taxable event, that the invoices concern, belong to under the rules of periodization.

However, in the case of an investment on immovable property, the related invoices and documents have a storage period of 13 years counting from the end of the calendar year when the adjustment period on immovable property began. The same requirement on the length of the storage period concerns the documentation that the transferor must give to the transferee on the investment on immovable property, and the documentation that the transferee must give to the transferor.

After the legally defined period of six years has elapsed, the invoices and other vouchers may be replaced by a specific document (within the meaning of § 209 q, VAT Act). The rules governing the information content of such a document, see "The Finnish Tax Administration's decision regarding the document referred to in § 209 q of the VAT Act" – Verohallinnon päätös arvonlisäverolain 209 q §:ssä tarkoitetusta selvityksestä (in Finnish and Swedish, record no of the official decision: VH/2952/00.01.00/2018).

9 Invoice as a precondition for the right to deduct

9.1 The purchaser holds the original invoice

VAT liable persons have the right to deduct the VAT payable on goods or services bought from another VAT liable person for the purposes of the purchaser's VAT-taxable business. What is meant by "VAT-taxable business" is an activity, which by virtue of the VAT Act results in the liability to VAT for the seller of goods or services (§ 102 of the VAT Act). If the purchaser has made the purchase for use that only partially entitles to deduction, the VAT can only be deducted for the part that the goods or services are actually used for this VAT-deductible purpose (§ 117 of the VAT Act).

A precondition for the right to deduct is that the VAT liable purchaser holds an invoice (or other document acting as an invoice) for the goods or services purchased, which is issued by the seller, and which fulfils the requirements of the VAT Act on information content on an invoice. The precondition also applies to advance invoices. Invoices entitle to a VAT deduction only if the information on the invoice is true to the actual circumstances.

If the purchase is one where the purchaser is liable to pay VAT due to the reverse-charge mechanism, an additional requirement is applied on the purchaser's right to deduct VAT – the purchaser must have fulfilled the reporting requirement defined in § 16 of the act on assessment procedure for self-assessed taxes, or the Finnish Tax Administration must have imposed the VAT amount on the purchaser for payment. The same requirements concern deducting the VAT payable on intra-Community acquisitions.

A precondition for the purchaser's right to VAT deduction is a self-written document by the purchaser, if the Finnish purchaser who must pay VAT due to the reverse-charge mechanism is unable to get an invoice from the foreign seller. Such a document must contain the VAT information that the VAT Act requires on invoices, and the VAT rate and the amount of VAT payable on the purchase or intra-Community acquisition.

A precondition for the right to deduct the VAT payable on imported goods is that the importer holds a customs clearance decision and the related documents.

The purchaser of a rental service may deduct the VAT payable on import of the goods, which he has rented, if the purchaser is liable to pay VAT on the renting of the goods by virtue of reverse charge mechanism (§ 113 of the VAT Act). In the same way as above, the VAT deduction also in this case requires that the purchaser holds a customs clearance decision and the related documents.

9.2 Deficient or incorrect VAT details on an invoice

The purchaser must hold the original invoice when making the VAT deduction. However, in practice, if the purchaser records the deductions on an accrual basis, it is permissible for him to deduct VAT even though the invoice is not yet received. If the purchaser receives the invoice later and finds out that the invoice does not correspond with the VAT deduction, the VAT deduction must be corrected. If the invoice is incorrect, the purchaser must ask the seller to issue a new invoice. The purchaser does not have a right to VAT deduction when the invoice is incorrect. To get the VAT deduction, he must ask the seller to issue a new, corrected invoice. The seller must issue a new invoice in replacement of the incorrect one, and the new invoice must contain a reference to the original invoice.

If the seller has entered information on an invoice that is not true to actual circumstances, no right to VAT deductions can be granted to the purchaser. For example, the purchaser does not receive a right to VAT deduction if the seller mentions VAT payable on the invoice in a situation where the seller is not registered in the register of VAT liable persons. However, if the Tax Administration finds out that the purchaser could not have been aware of the seller entering false information on the invoice, and if the selling is generally subject to VAT in similar circumstances, the purchaser may be granted the right to deduction by virtue of protecting good faith.

The Tax Administration can accept a VAT deduction even if the VAT liable person does not have an invoice that fulfils the requirements of the VAT Act on information content on an invoice, if the VAT liable person can prove by other methods that he is entitled to VAT deduction.

If the seller's name or address is not spelled correctly or is incomplete, it does not prevent the purchaser from having the right to deduct VAT. The purchaser is entitled to VAT deduction in this case because the Business ID identifies the seller.

Misspellings or similar small mistakes do not affect the purchaser's right to deduct VAT on the condition that he has purchased the good or service for his VAT-deductible business activity, and that no restrictions of VAT deductibility apply to the good or service in question. Example: the unit price is wrong, but the invoice total price is right. In this case, the purchaser has the right to deduction, and there is no need to ask the seller to issue a new invoice.

In the same way, the Tax Administration can accept a VAT deduction in a situation where small purchases, paid in cash, were made, and the technical circumstances make it practically almost impossible to get an invoice. Typical example is a parking fee paid via vending machine.

When the seller follows the VAT margin scheme procedure of second-hand goods, works of art, antiquities and collectibles, the purchaser has no right to deduct VAT. When the seller follows the VAT margin scheme procedure of second-hand goods, works of art, antiquities and collectibles, the invoice must not show the amount of VAT.

When goods are transferred away from a VAT warehouse in the appropriate process, the requirement for the right to deduction of VAT is that the VAT liable person has a calculation that shows the base of VAT to be paid. In addition, the VAT liable person must also have an invoice, or a document of other kind, serving as the invoice, given by the seller for all the sales, imports and intra-Community acquisitions that take place in the warehouse. The calculation is the actual bookkeeping voucher and the original invoices are its enclosures. The calculation must contain references to these invoices.

It is recommended that the purchaser checks the validity of the seller's registration for VAT in order to make sure that the purchaser has the right to deduct the VAT. This can be done on the www.ytj.fi website – the Business Information System – or by phoning the Tax Administration's service number.

10 Invoicing of pass-on expenses

10.1 Expenses paid on behalf of another company

A VAT liable company may sometimes pay expenses of taxable business on behalf of another company. A typical example is the travel or hotel expenses paid on behalf of an employee of another company in the same enterprise group.

If a VAT liable company is invoicing another company in order to pass on VAT included expenses, which the VAT liable company paid on behalf of the another company, this is treated as a taxable supply. The principle for passing on the expenses is that the original VAT rate should generally be used because the nature of the good/service does not change when expenses are re-invoiced. If you add a service charge to your invoice, the added charge is treated as part of the taxable supply. The rate of VAT on your service charge is the same as that of the expense being passed on. When you issue an invoice to pass on expenses that have varying VAT rates, you must divide the service fee to these VAT rates, based on the original prices of goods and services without VAT.

When passing on expenses, it may be that an original invoice is VAT-free because of the seller's VAT status. The reason for this may for example be that the seller is a small-scale business operator. If such an invoice is being passed on, and the party that passes on the invoice/expense has a VAT status that does not allow it to invoice VAT-free, VAT must be added even if the original invoice did not contain any VAT.

If the party that passes on expenses is not a VAT liable person, it cannot add VAT to its invoices. In this case, when it issues an invoice to pass on the expenses, the invoice cannot contain VAT. As a result, neither the party that passes on the expense nor the party that finally pays the expense can deduct the VAT that the original invoice includes. An exception from the above rule is the purchase of energy resources, from which VAT liable persons, who operate in rented or real estate company's premises, are entitled to deduct VAT, even when the energy resources are included in the VAT-exempt rent or other VAT-exempt consideration for the immovable property (under the provisions of § 111 of the VAT Act).

The rules of VAT Act governing the place of supply – of goods as well as services – are applicable on all situations of passing on expenses to another party. This means that if the place of supply of the passed on good or service is another EU country, or outside the EU, no VAT is to be paid to the tax authority of Finland. An example of such a service is advertising in a situation where an advertising service is sold to a business enterprise and the reverse-charge mechanism applies.

10.2 The expenses that are directly related to the own business of a company

If a company issues an invoice for expenses that are directly related to its own business operation, it is not treated as passing on expenses to another company. Instead, it is the company's own selling activity of goods or services.

When a seller prepares an invoice containing expenses that a sold good or service has caused, the expenses are a part of the VAT base of the selling. From this follows that these expenses must have the same VAT rate as the goods or services that are being sold. The rate of VAT that had been applicable when the seller made the purchases has no importance. In the same way, it has no importance whether the seller were to issue a separate invoice that lists the paid expenses or whether the seller were to add his fee to the amounts.

10.3 VAT-exempt invoicing of pass-thru expenses

As provided in the Article 79(1)(c) of the VAT Directive, the base of VAT must not include the amounts received by a taxable person from the customer, as repayment of expenditure incurred in the name and on behalf of the customer, and entered in his books in a "suspense" account. The taxable person must furnish proof of the actual amount of the above expenditure, and the taxable person cannot deduct any VAT which may have been charged.

The Finnish VAT Act does not contain comparable provisions on pass-thru expenses. However, by virtue of the VAT Directive's interpretative effect, the principle can be applied in Finland as well.

Typically, the type of expense that taxable persons can book in a suspense account is a charge paid to a public authority. The important factor is that the charge had been paid on behalf of the final customer and in that customer's name. In other words, it is not a fee that the taxable person must pay to public authorities relating to its own activities. Instead, the taxable person only acts on behalf of its customer – for example, it can get a public licence for its customer. The public charge that is covered as a pass-thru expense is not part of the taxable person's sales; instead, the taxable person treats it in its accounting as a pass-thru amount.

Examples of pass-thru expenses include paid fees for a new power utility connection in the construction industry, where the builder can pay such a fee on the customer's behalf. Another example is the paid import taxes in a situation where a forwarding agent has settled the import taxes on its customer's behalf. In the same way, attorneys-at-law
often pay transfer tax, court litigation fees, and witnesses' expenses on behalf of their clients. Other examples of pass-thru expenses can include visas for travelling, paid vehicle registrations and license plates, and fishing licenses, etc., paid on behalf of a customer.

No sales margin can be added to a pass-thru expense, because it is in the nature of a pass-thru expense that it is invoiced in exactly the same amount as it was originally charged. For this reason, if a fee of some kind is added to the invoice of a pass-thru expense, such a fee must be regarded as a compensation for a service related to invoicing. From this follows that VAT must be paid on the fee (for more information, see ruling no KHO 8.10.1998 T 2082 of the Supreme Administrative Court).

VAT-exempt pass-thru expense differ from pass-on expense so that when a pass-thru expense is in question, both the original seller and the final end customer are aware of the identities of the parties that are the actual seller and buyer of the goods or services.  In these circumstances, the relevant agreement is made between the original seller and the final end customer (being the buyer). Consequently, the obligation to pay the sum lies with the final end customer. The primary payer of the charge is not the party that has an obligation to pay it.

If a charge paid to a public authority cannot be treated as a pass-thru expense, it is generally regarded as being part of the sold goods/services. As a result, its amount is then simply included in the VAT base of the sold goods/services. If the party that issues the invoice is merely passing on the expense paid to a public authority, the instructions above in 10.1 on how pass-on expenses must be invoiced must be applied. If the party issuing the invoice for pass-on expense does not fulfil the requirements for VAT-exempt sales, it must add VAT to the amount. When a public authority imposes public charges, it is not regarded as an activity taking place "in the conduct of business" as referred to in § 1 of the VAT Act. For this reason, public charges that must be paid to public authorities are exempt from VAT. When a VAT liable business enterprise issues an invoice to pass on expense consisting of such a charge, it is treated as invoicing subject to VAT. The VAT rate in this case is 24%.

11 The procedure involving a waiver statement

Under § 50.2 of the act on assessment procedure for self-assessed taxes, the Tax Administration can refrain from imposing VAT or from making an adjustment if the reason for unpaid VAT or excessive refund is an error that has caused too much VAT to be paid by another person liable to tax, or caused an amount of VAT to remain unrefunded. A precondition for the renunciation is that the person liable to VAT presents a commitment given by the person who is entitled to a refund that he waives his right to such refund. The commitment must contain a specification of each business transaction involved.

The provision of § 50, subsection 2 can only be applied on situations where the Tax Administration would otherwise impose the value-added taxes to be paid afterwards. Whether to accept the waiver statement is discretionary for the Tax Administration.

If the Tax Administration has accepted a waiver statement presented by the VAT liable, e.g. during an ongoing tax audit, it is not necessary for the VAT liable person to issue new, corrected invoices.

12 Penalty charge for negligence

If the VAT liable person does not, even after Tax Administration's request, appropriately and in right time fulfil an obligation defined in § 39 of the act on assessment procedure for self-assessed taxes, neglecting it either fully or in part, the Tax Administration imposes a penalty charge for negligence as provided in that provision. The maximum charge that can be imposed by the provision in question is €5,000.

The obligations listed in § 39 include, among others, the obligation to issue invoices (§ 209 b of the VAT Act), the obligation to enter information on invoices (in accordance with § 209 e and § 209 f of the VAT Act) and the obligation to keep accounting system and records for the purposes of taxation (§ 26 and § 27 of the act on assessment procedure for self-assessed taxes).

The Tax Administration may refrain from imposing the negligence penalty on the VAT liable person if there is a valid reason for the negligence or if the negligence is minor. Examples of what can be viewed as a valid reason for negligence include the VAT liable person falling ill, and situations where the obligation cannot be fulfilled due to a force majeure.