Refund of VAT to foreign businesses established in other EU countries

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

This letter of guidance concerns the VAT refund procedure for businesses established in the European Union. European businesses should use the electronic portal maintained by the tax authority in their own EU country to submit the application for a refund of VAT.

Foreign businesses have in some cases the right to receive a refund of the input VAT included in the price of goods and services purchased in Finland. The requirements and conditions for obtaining a refund are explained in this letter of guidance.

This letter of guidance includes information on submitting the electronic application, on its processing and on how an appeal can be submitted. The final section lists the expenditure codes that describe the nature of goods and services applicable to the VAT refund scheme.

This letter of guidance is updated and re-edited so that it now reflects the established procedure of the electronic application system and the VAT rules that are effective in year 2013.

1 Introduction

Taxable persons established in other EU countries are entitled to reclaim their input VAT by submitting an application to Finland through the electronic portal maintained by the tax authority of their own country.

Paper-printed application form, which could be sent off by post, is not available.

Electronic application must be submitted within 9 months of the end of the calendar year to which the refund period pertains.

1.1 Applicable legal provisions

The guidance is based on the provisions of the VAT Act (Arvonlisäverolaki 1501/1993). They define the circumstances and requirements for VAT refunds.

• Established in the European Union (§§156 a–156 I, VAT Act)
• That are not liable to VAT for their sales in Finland, and that do not have a fixed establishment, from which they are carrying on business activities, in Finland (§§122–126, VAT Act).

Refund to foreigners is based on the rules laid down in the Council Directive 2008/9/EC on Detailed rules for the refund of VAT, provided for in Directive 2006/112/EC, to taxable persons not established in the Member State of refund but established in another Member State.

1.2 Rates of VAT

1.3 Contact details of VAT refund authority

Applicant must use the electronic portal maintained by the tax authority in their own country to reclaim Finnish VAT. Uusimaa Corporate Tax Office processes the electronically submitted applications in Finland.

Uusimaa Corporate Tax Office
Street address: Haapaniemenkatu 4 D, 00530 Helsinki
Postal address: PO Box 30, FI-00052 Vero, Finland

Telephone: +358 (0)20 697 063
Fax: +358 (0)20 612 4895

The part known as 'ALVEU' of the tax.fi – vero.fi website has an electronic Question/Answer service:

• Contact User Support (tax.fi/ALVEU)

2 Requirements for applicants

Foreign taxable businesses may have the right to receive refund of the VAT included in the price of goods and services purchased in Finland.  VAT may be refunded to foreign applicants if the following requirements are met:

• The applicant has no fixed establishment in Finland from which the applicant is conducting its business
• The business of the applicant in Finland does not include any other selling of goods and services than

1. Sales to which VAT reverse charge is applied
2. Sales in which the buyer is the State of Finland
3. Sales of transportation services, and ancillary services to them, which is not taxable under §§71, 72 d or 72 h, VAT Act.

VAT reverse charge, referred to above in (1), concerns the following selling (and involves the obligation of the buyer, instead of the seller, to pay the VAT):

• Sales of taxable investment gold (§ 8 a, VAT Act)
• Sales of emission rights (§ 8 b, VAT Act)
• Sales of construction work, and the renting out of employees to perform construction work (§ 8 c, VAT Act)
• Any sales made by foreign businesses with no fixed establishment and VAT registration in Finland (§ 9, VAT Act).

Also VAT paid in connection with the importation of goods can be refunded.

Situations in which a foreign business has a fixed establishment in another EU country

Fixed establishments located in other EU countries also qualify as a party entitled to VAT refund. If the applicant has more than one fixed establishments in different EU countries, every one of them must submit application separately in their countries of establishment. Within the framework of the refund procedure, the Member State of establishment will examine the applicant’s VAT liability, and forward on the application to the Finnish Tax Administration for purchases made in Finland. The refund requires that the invoices are at the VAT liable fixed establishment’s name.

Businesses with intra-Community sales or acquisitions in Finland

Intra-Community selling (also known as 'intra-Community supply') refers to the selling of goods under an arrangement where the seller, the buyer, or a third party on their behalf, will transport the goods from Finland to another EU country. Intra-Community acquisition refers to the buying of goods, against payment, under an arrangement where the seller, the buyer, or a third party on their behalf, will transport the goods to the buyer from one EU country to another.

Foreigners carrying out either intra-Community sales or intra-Community acquisitions in Finland are subject to the duty of notification in Finland. They must register for VAT as notification duty, and file Tax Returns and Recapitulative Statements to the Finnish Tax Administration regularly.

Foreigners making intra-Community sales in Finland are not eligible for the VAT refund that usually can be made to foreigners because they have a sales operation in Finland. They must file Tax Returns in order to report their input VAT in the same way as Finnish businesses do. Foreigners having intra-Community acquisitions are eligible for VAT refund if they are not liable to tax on their selling in Finland, and they do not have a fixed establishment in Finland.

For more information, see VAT registration of foreigners in Finland.

3 Business operations that qualify for refund

The right to refund requires that the purchases have been made for the applicant’s business operations abroad which if carried out in Finland would thus qualify for refund or deduction (see section 3.1 below for more details). Secondly, it is also required that the foreign business has purchased the goods and services for transactions giving rise to a right of deduction in the country of establishment (see section 3.2 below).

3.1 Operation that would entitle to deduction or refund in Finland

The main requirement for VAT refund is that the applicant has made the purchases for business operations abroad which if carried out in Finland would entitle to a refund or a deduction in Finland. The right to refund is governed by the legislation of Finland. The tax rules on VAT refunding include those that concern the liability to VAT of a business operation, those that concern partial rights to VAT deduction and those that concern the restrictions of deductions. For more information on restrictions, see section 4 below.

To sum up, the right to VAT refund demands that one of the requirements below is met:

• The purchase concerns the applicant’s business operations abroad, which, if carried out in Finland, would be taxable.
• The purchase concerns the applicant’s business operations abroad, which, if carried out in Finland, would entitle the applicant to a refund according to the VAT Act (as activities known as 'zero-rated', see below in sections 3.1.1 and 3.1.2 for further details).
• The purchase concerns the sales, effected by the applicant, of transportation services in Finland, and ancillary services to them, which is not taxable under §§ 71, 72 d or 72 h, VAT Act (see section 3.1.1 below).
• The purchase concerns the sales of goods and services by the applicant in Finland for which the buyer is liable to pay VAT (what is known as reverse charge— for more information, see section 3.1.3 below).
• The purchase concerns sales of goods and services by the applicant in Finland to the State of Finland.

3.1.1 Operations subject to a zero rate

If the purchase relates to applicant’s business operations abroad, which would be treated subject to zero rate if they were operated in Finland, the applicant is entitled to receive a refund for the input VAT.

If the foreign business has carried on certain transport services or ancillary services to them, it is eligible to a refund of the input VAT when it has made purchases that relate to that operation.

If the purchase relates to some other operation in Finland, also treated as being zero rated (such as exempt international commerce, exempt vessels, or the selling of services relating to them), the applicant is not eligible for VAT refund normally offered to foreigners. To be able to deduct the input VAT in respect to these purchases, the foreigner must register for VAT in Finland. Then any VAT refunds are accounted for in the same way as for Finnish businesses.

For more information, see our guidance ”VAT registration of foreigners in Finland”.

3.1.2 Investment gold, gold material and semi-manufactured gold products

If the purchase relates to applicant’s business operations abroad, which if carried out in Finland would be treated as exempt sales of investment gold, the foreigner is entitled to VAT refund for:

1. the tax paid on taxable investment gold bought from a supplier liable to tax,
2. the tax, which is included in the purchase of gold that will be transformed by the applicant, or at its request, into investment gold,
3. the tax paid on any services for the transforming of the investment gold or other gold in respect of form, weight or purity.

For more information (in Finnish and Swedish) on the VAT treatment of investment gold, see here.

3.1.3 Reverse charge

General liability to VAT under the reverse charge

Reverse charge is applicable when the seller of the goods or the service is a foreign business that has no fixed establishment in Finland from which he is conducting its business and has not applied for VAT registration in Finland. For the sales made by the foreigner of this kind, the VAT is paid by the buyer. If the foreign business has no other selling in Finland than those falling into this category, it is entitled to VAT refund of the input VAT relating to its purchases in Finland.

However, the reverse charge is not applied in the following circumstances, and the foreign business, being the seller, is always liable to pay the VAT if:

1. the buyer, too, is a foreigner with no fixed establishment in Finland and no VAT registration in Finland.
2. the buyer is a private person.
3. the sale is what is known as a distance sale of goods from another EU country to private persons in Finland or to buyers equated with private persons.
   For more information, see Distance selling rules.
4. the sale is passenger transportation services, or services associated with the admittance to teaching, scientific, cultural, entertainment or sports events, fairs, exhibitions or other such events.

If the foreign business has made sales in Finland that coincide with the above definition, it is not entitled to VAT refund for any part of its operation.  To be able to deduct the input VAT in respect to these purchases, the foreign business must register for VAT in Finland. Then any VAT refunds are accounted for in the same way as for Finnish businesses.

For more information, see our guidance ”VAT registration of foreigners in Finland”.

Construction sector: reverse charge

The reverse charge is applied to certain construction work and related employee leasing in Finland. The reverse charge must be applied whenever both of the following conditions are met:

1. Construction work is to be performed, or leased employees are offered for work in construction connected to real estate, and
2. The buyer of the above services is a business that sells construction services on an ongoing basis, or has leased employees working in the construction sector on an ongoing basis.

The reverse charge must be applied to the selling if a Finnish or a foreign business sells construction work to a foreign business, which also in the course of its normal activities, on an ongoing basis, is a seller of construction work. If the foreign buyer does not have a fixed establishment in Finland and has not registered for VAT in Finland, it is required that the foreign buyer applies for entry in the VAT Register concerning reporting the construction services, and files Tax Returns to the Finnish Tax Administration. In this case, the Tax Returns should only contain information relevant to the construction services being rendered. To reclaim the input VAT on other purchases made in Finland, the foreign buyer may submit an application for VAT refund for foreigners on the condition that the general requirements for such refunds are met.

For more information (in Finnish and Swedish), see Reverse charge in value added taxation in the construction sector.

Buyers of emission rights: reverse charge

As for the selling of emission rights (for combatting global warming) in Finland, the parties to the transaction must apply the reverse charge. What is meant by 'emission rights' is the allowance to emit one tonne of carbon dioxide equivalent during a specified period (within the meaning of the Council Directive 2003/87/EC on Greenhouse gas emissions). The party that must pay VAT is the buyer, if the buyer is registered for VAT in Finland. If the buyer is not VAT registered, the seller of the emission allowance is liable to account for the VAT and to pay it on the sale in the usual way. In this case, the foreign seller who has made sales in Finland that coincide with the above definition, is not entitled to VAT refund for any part of its operation. To be able to deduct the input VAT in respect to these purchases, the foreign business must register for VAT in Finland. Then any VAT refunds are accounted for in the same way as for Finnish businesses.

Buyers of gold: reverse charge

If the purchase of goods or services is related to foreigner’s selling of taxable investment gold, gold materials, or semi-manufactured gold, in Finland or in foreign countries, and the reverse charge has been applied to the sales transactions, the foreign business is entitled to receive a refund for the input VAT. A condition for the refund is that the foreigner’s business activity abroad would entitle to option for taxation if carried out in Finland. The right to refund also concerns any goods and services that have been purchased for the purposes of selling a taxable intermediary service of taxable investment gold.

3.1.4 Financial services, insurance services, sales of exempt banknotes and coins

If the purchase of goods or services is related to the selling of financial services, insurance services, sales of exempt banknotes and coins, as referred to in VAT Act, the foreign business is entitled to a refund for the input VAT. This requires that

• the buyer is a business that does not have a domicile or a fixed establishment in EU territory or
• the selling is directly connected with goods intended for export from the EU.3.2 Toiminta oikeuttaa vähennykseen sijoittautumisvaltiossa

3.2 Operation qualifies for deduction in the country of tax residence

Another important requirement for the right to refund is that the applicant must carry out selling in the country of establishment that is treated as eligible to VAT deductions. The applicant may carry out selling in the country of establishment that in part is treated as deductible, and in part, as non-deductible selling of goods and services. In these circumstances, the maximum refundable VAT is what the legislation of the country of establishment provides for.

What is meant by 'the country of establishment ' is the country where the business has its domicile, or a fixed establishment through which the business carries out transactions.

3.2.1 The deductible proportion

The rules that primarily determine the amounts of VAT refund are the Finnish VAT rules that concern the liability to VAT of a business operation, those that concern partial rights to VAT deductions, and those that concern the restrictions of deductions. Although Finnish VAT rules determine the amount of refund, its maximum can be no higher than what is deductible in the country of establishment. Rules for defining this deductible portion are based on Article 173 of the Council Directive (2006/112/EC, VAT System) and on how this Article has been implemented in the legislation of the country of establishment. Under Article 173, the computations of deductible portions must comply with the requirements of Art. 174 and Art.175 for all transactions carried out by the taxable person.

Under the Directive, there are alternative methods available to different EU countries of determining the deductible portion. Countries may authorize or require of VAT taxable persons that they:

1. Determine a pro rata for each sector of their business, and keep separate accounts for each sector;
2. Alternatively, make the deduction on the basis of the actual use made of all or part of the goods and services;
3. Make the deduction in respect of all goods and services used for all transactions referred to within various business sectors; and
4. If the VAT not deductible by the taxable person is insignificant, it is to be treated as nil.

The deductible proportion, that is, the pro rata amount should be determined separately for each year, for constant use during that year.   In this way, it is of a provisional nature, and depends on the preceding year’s transactions.  Deductions made on the basis of the pro rata must be adjusted when the final proportion is fixed during the following year.

The applicant must in the application declare the valid pro rata amount as a percentage with two decimal points. The deductible proportion should be expressed in connection with each invoice and import document.

3.2.2 The adjustment procedure of the deductible proportion

The applicant must correct a pending application or an already refunded amount, if the amount of proportional deduction has been adjusted and this has resulted in a deviation from its provisional value i.e. the one used on the application. The deadline for such a correction is the end of the calendar year following the application period. The applicant must submit the pro rata adjustment through the web service maintained by the tax authority in their country of establishment. The Finnish Tax Administration will process the adjustment either in connection with the applicant’s next application or in issuing a separate decision.

4 Accepted types of purchases with input VAT

What entitles the foreign business to a VAT refund includes the following taxable purchases:

• Hotel accommodation, travel in Finland
• Fuel and lubricants for cars, spare parts for cars, short-term car rental, and parking
• Purchases for conferences, exhibitions and fairs
• Samples of goods
• Office supplies, photocopies, maps and professional literature.

The right to VAT refund is similar to the extent what Finnish VAT registered businesses can recover as input VAT. The restrictions of deduction rights that are set out in VAT Act also apply to the VAT refund payable to foreigners. In this way, the following purchases, among others, are not eligible for refund:

• Immovable property that the taxable person or his employees uses as a residence, a kindergarten, a recreational or leisure facility as well as goods and services connected with it or its use.
• Goods and services related to transportation between the residence and place of work of the taxable person or his employees.
• Purchases intended for the private consumption of the taxable person or his employees.  Such a purchase is e.g. breakfast in connection with hotel accommodation.
• Goods and services for representation i.e. entertainment purposes.
• Purchase of a passenger car and purchase of goods and services related to passenger car when the passenger car has not been purchased solely for business use. No refund is paid in case a passenger car is used for purposes that do not entitle to a deduction, even if such use would only represent a small percentage of the total.
• Expenses associated with the selling of exempt investment gold.
• The goods and services that a foreign travel agent has bought from other businesses in his own name, and which are used directly for the benefit of the passengers or travellers. Travel agency services are within the VAT margin tax scheme. For this reason, the input VAT on such goods and services cannot be deductible and cannot be refunded.
  For more information (in Finnish or in Swedish) on the taxation of travel services, see here.

No refund is paid on purchases that are exempt from tax, such as airline tickets for international flights. No refund is paid when the invoice should be exempt but it wrongly includes VAT. If a seller has raised an invoice for goods or services with VAT, but no VAT should be payable in the circumstances, the Tax Administration will not pay refund. Instead, the buyer should contact the seller to request for refund of incorrect VAT.

5 How can VAT refund be applied?

The applicant submits its VAT refund application using the electronic portal maintained by the tax authority in the applicant’s country of establishment. A refund application to Finland can be made in English, Finnish and Swedish. Uusimaa Corporate Tax Office processes the electronically submitted applications in Finland. If during the refund process, the Uusimaa Corporate Tax Office asks for any additional information English, Finnish or Swedish can be used.

If the applicant in the Member State of establishment is a member of a VAT group the application is submitted at VAT group level. However, if the individual entity has been issued an own VAT number it may make an application for its own purchases.

Goods and services bought on Åland islands

The electronic procedure is also used when the purchase was made on Åland Islands. Åland islands is an autonomous province that does not fall into the VAT and Excise tax area of the European Union, but does belong to the EU Customs territory and Customs Union. Refund for the VAT on the accommodation is applied through the web portal if, for example, the applicant’s employee has travelled to Åland islands.

Can additions be made to a submitted application later?

The applicant is allowed to add something to an application after it has been submitted. A forgotten enclosure, for example, can be added to the application by submitting a new version of the application through the electronic web portal.

However, new invoices cannot be added to an already submitted application. If new invoices must be added and the refund period has not yet expired, the applicant can create a new application for them. Alternatively, the applicant can include the invoices into next application that concerns the same calendar year.
There are no limitations as to the number of applications. However, the formal requirements (application period and refundable amount) should be fulfilled for each application. The desirable maximum number of applications per year is 5–6.

5.1 Refund period

At least three consecutive months of the same calendar year, and no more than one full calendar year is the required length of the refund period (in other words, 3 to 12 months that all must fall into the same calendar year). Refund period may only consist of entire calendar months, not parts of a calendar month. However, an application can cover less than three months e.g. concern December only, that is, if this is all that remains of the calendar year.

Refund periods must be in the past. This means that if the date of submittal is 15 July, the period concerned cannot include the month of July. Consequently, such an application cannot include any invoices dated for July that year.

An application cannot be submitted only on the basis that the applicant has received the invoice. In addition, is required that the goods has been supplied, or service has been rendered, or payment has been made. The input VAT on the purchases is related to the refund period during which the latter of the two following events occurred:

• Goods were delivered, service rendered, or full or partial payment was made in advance of delivery
• Invoicing for the goods or services was done.

If the application concerns VAT on imported goods, its refund period must be the month of customs clearance.

If the applicant has forgotten to include an invoice relating to an earlier period during the current calendar year in a previous application, it is permissible to include that in another application that concerns the same calendar year. In this way, an applicant who has forgotten a January purchase invoice from his application for the January-to-April period, it is permissible to include the input VAT on that invoice in another application, made at the end of the year. In this case, it is required that the refund period is specified as "January to December".

5.2 Minimum VAT refund

If an application that relates to the entire calendar year or to its remaining part, no refund is paid if the refundable amount is less than 50 euros. In this context, the 'remaining part of a calendar year' refers to October, November and December. Moreover, it must be noted that if application is submitted during the calendar year, the minimum amount is 400 euros.

5.3 Information required on the application

The following details must be given:

• The applicant’s name
• The applicant’s VAT number or tax registration number (TIN)
• The applicant’s street address, postal code, and city
• The applicant’s e-mail address
• Description of the applicant’s business activity for which the goods or services have been purchased. Use a NACE code to describe the business. Several codes may be used as necessary.
• The applicant’s bank account details (the BIC code and bank account number expressed in the IBAN format).

The application must contain a declaration in which the applicant declares that during the period concerned, he has not operated a taxable activity in Finland i.e. not delivered any goods or rendered any services. However, this does not concern any sales subject to the reverse charge or any selling of certain exempt transportation including ancillary services to it.

Application must include a specification of invoices and import documents

Each invoice and import document must be listed.  The following details must be given:

• Name and full address of the Finnish seller of goods or services (for import documents, fill in the name and address of the seller established outside the EU)
• Business ID of the Finnish seller, Y-tunnus in Finnish (not applicable for import documents)
• Country code FI for Finland (not applicable for import documents)
• Invoice date, invoice number or import document date and number
• Price in euros excluding VAT
• The amount of VAT in euros
• Deductible portion expressed as a percentage (see section 3.2.1 above,)
• Requested amount to be refunded, in euros
• Expenditure code for describing the nature of purchased goods and services.

See section 8 of this guide for the expenditure codes valid for Finland.

Finland only accepts the codes listed in section 8. The code is expressed by using both the main and the sub code (in format: x.y or x.y.z). Several codes may be used per invoice or import document if necessary. If the application were to contain codes that are not valid for Finland, or if it only displays a main expenditure code without the appropriate sub code, this part of the application may be rejected.

Information on the invoices

It is required that the invoices to which the application refers have the following information printed on them:

• Invoice date of issue
• Invoice number
• Seller's VAT registration number (i.e. their Finnish Business ID)
• Names and addresses of the seller and buyer
• Quantity and category of goods sold, extent and category of services sold
• Delivery date of goods, completion date of service delivery, or the date of payment of an advance payment, if such a date can be defined and it is not the same as the date of issue of the invoice
• Base of VAT, specifically for different VAT rates if applicable, unit price without VAT, any credits and discounts, if they have not been included in the unit price
• The rate of VAT that applies to what is being sold
• Total amount of VAT charged
• Reference to a previous invoice, if the invoice is intended as a correction to it.

Simplified information on the invoices

Invoices with simplified information are acceptable in the following circumstances:

• Sale of goods or services is for €400 or less
• The invoice concerns retail sales (or similar, where almost all selling is made to private individuals)
• The invoice concerns restaurant and catering services or passenger transport services
• The invoice is a printout from a parking meter or a similar device.

In this way, simplified information may be on receipts from a department store, train tickets, bus tickets, machine-printed receipts for parking fees etc.

The following information is required for them:

• Invoice date of issue
• Seller's name and VAT registration number (i.e. their Finnish Business ID)
• Quantity and category of goods, or a category of services
• Total amounts of VAT charged specifically for each VAT rate, or bases of VAT, specifically for each VAT rate.

Although the invoice only had the simplified information printed on it, the applicant must specify the Finnish seller's Business ID in the application. This is required even if the electronic portal of applicant’s country of establishment does not necessarily define it as a mandatory entry. On the other hand, the electronic portal may require the seller's address even in cases where no address is printed on the invoice or receipt due to simplified VAT details. In this case, the applicant may fill in the space with 'n/a' for 'not applicable'.

5.4 Engaging the services of an agent or a representative

An agent (or a representative) may complete the application on behalf of the applicant. Such an agent may be domiciled in Finland or elsewhere. Agent's name, full postal address and country code and e-mail address as well as a VAT registration number or a tax registration number must be stated on the application.

If an agent completes the application, a Power of Attorney must be enclosed, and it must specify the agent’s powers. A Power of Attorney must state whether the agent only is authorised to submit the application or whether he also is authorised to receive the payment. The Power of Attorney should be scanned and attached to the application.

Power of Attorney with an indefinite period of validity only has to be attached to the first application the agent makes. There is no need to attach it again if no changes have been made.

• See here for a model Power of Attorney (pdf)

The model Power of Attorney is formatted as being in force until further notice. However, a Power of Attorney drafted by applicant in free-text format is also accepted, if it contains the same information as the model.

5.5 Last date to apply for refund

Applications for a VAT refund must be submitted through the electronic portal maintained by the tax authority in applicant’s own EU country within 9 months of the end of the calendar year to which the period relates. In this way, requests that concern the 2013 calendar year must be made by 30 September 2014. The Tax Administration will regard an application as complete only when all lines and spaces have been duly filled out. Applications that arrive past deadline will not be taken into consideration.

5.6 Mandatory enclosures

Invoice and import documents, on which the taxable amount is €1,000 or more, should be scanned and attached to the submitted application. Accepted file formats are tiff, jpeg and pdf. The recommended format is pdf.

If an agent completes the application, a Power of Attorney must also be attached as a scanned file, and it must specify the agent’s powers.

6 Description of the administrative procedure

6.1 Tax authority of the country of establishment forwards the application to Finland

After submittal of the application in the web portal, the tax authority of applicant’s country of establishment will send a notification of receipt to the applicant. The tax authority will also check that the applicant has been VAT liable during the refund period concerned. Then they forward the application, its enclosures and the registration information to Finland. The rules require that the tax authority of applicant’s country of establishment forwards the application to Finland within 15 calendar days of the date of submittal.

The tax authority of applicant’s country of establishment will not forward the application to Finland if:

• during the refund period, the applicant was not registered as a taxable person liable to pay VAT in the country of establishment
• the applicant carries out only supplies of goods or services that are exempt, without deductibility of VAT included in the purchases
• the applicant is covered by the exemption for small enterprises
• the applicant is covered by the common flat-rate scheme for farmers.

In this case, the tax authority in the applicant’s country of establishment will inform the applicant that it will not forward the application to Finland.

When the application for VAT refund has successfully been received in Finland, the Finnish Tax Administration will send an electronic notification of receipt to the tax authority of the applicant’s country of establishment. This notification will then be transmitted to the applicant via the tax authority of the country of establishment. They will officially notify the applicant, in the way they choose, that the application has been received by the Finnish Tax Administration. This notification may be displayed to the applicant at the website of the electronic portal or be sent by e-mail or by letter.

6.2 Time limits for the processing of an application

The processing time of an application is four months as of the date of arrival in Finland. However, if Uusimaa Corporate Tax Office should require additional information, the standard processing time is extended to six months. Similarly, if Uusimaa Corporate Tax Office has had to ask for additional information more than once, the time limit is further extended to eight months.

6.3 Request for additional information

Uusimaa Corporate Tax Office may ask additional information from the applicant when deciding on an application. The office uses letter correspondence by post. If the applicant has engaged the services of an agent, requests for information will be sent to him.

The rules require that the office must send a request for additional information within four months of the date of arrival of the application. The applicant must respond within one month of the date when the applicant or its agent receives the letter.

For example, Uusimaa Corporate Tax Office may contact the applicant to ask about the business activities the applicant is conducting in Finland. Alternatively, the office may ask the copies of invoices or import documents to be delivered. Invoice value of such documentation does not necessarily have to reach €1,000. If necessary, Uusimaa Corporate Tax Office can ask for additional information of the tax authorities of applicant’s country of establishment, or of the Finnish seller of goods or services.

6.4 Description of the decision and payment of refund

Based on what the applicant has reported on the application and in response to any request for additional information, Uusimaa Corporate Tax Office will decide on  the request. The official decision, which can be appealed against, will be sent to the applicant as a letter by the postal service. Additionally, a duplicate of the letter, which is not considered official, will be transmitted electronically via the tax authority of applicant’s country of establishment. The tax authority can have the letter displayed to applicant at the website.

The approved refund amount will be paid to the bank account in a EU country, as specified on the electronic application. The refunded amount can be smaller that shown on the decision, if the applicant’s or agent’s bank charges its’ own costs by reducing the amount.

Under the rules, if the Finnish authorities have not asked for additional information, the approved amount will be payable before four months plus ten working days have elapsed since the receipt of the application in Finland.

If the Finnish Tax Administration has asked for additional information and the applicant has responded on time, the following rules apply:

• One request for additional information: payment within six months plus ten working days after the date of receipt of the application in Finland.
• Several requests for additional information: payment within eight months plus ten working days after the date of receipt of the application in Finland.

If the processing time of application is longer, and if actual date of payment is later than what is required under the above rules, the Finnish Tax Administration must pay interest on the refund, as laid down in the provisions of the Act on Tax Collection (Veronkantolaki  5.8.2005/609). In this case, the same interest rate is applied as valid when VAT is being refunded to Finnish-registered businesses. Interest on the VAT refund is not paid if the applicant has not responded on time to any requests for additional information.

6.5 Refunds paid to applicants by mistake are reclaimed

If insufficient or incorrect information has been given by the applicant, the Tax Administration will order the VAT refund to be paid back.

If undue or excessive refund has been paid because of the above reasons, the Tax Administration may reclaim it. The Tax Administration must make the debiting decision within three years of the end of the calendar year of the VAT refund period.

Such debiting decisions may order the reclaimed amounts to be increased by maximally 30 percent, if the application or its enclosure has contained incorrect information. If the reason for giving incorrect information is aggravated negligence or deliberate action, reclaimed amounts may maximally be increased threefold. In addition, surtax will be added to the amount.

Debiting decisions are either made separately or the debited amounts may be deducted from the applicant's upcoming VAT refunds.

7 Decisions may be appealed

A written complaint can be submitted to the Helsinki Administrative Court in order to lodge an appeal against a VAT refund decision or a debiting decision. Appeals cannot be made concerning purchases that have not been included in the original VAT refund application.

The appeal brief should be addressed to the Helsinki Administrative Court, but sent to Uusimaa Corporate Tax Office. Appeals cannot be delivered electronically. They must be written either in Finnish or in Swedish.

Invoices with their specifications must be enclosed. Appeal briefs must contain the following information:

• Appellant's name
• Decision against which the appeal is being made
• Specification of the part of that decision that the appeal concerns, and the suggested change to the decision, and
• The justifications.

If a representative lodges the appeal on behalf of the appellant, a Power of Attorney must be enclosed. The text of the letter of authorisation must contain a reference to the representative being authorised to make an appeal.

As the first instance, it is Uusimaa Corporate Tax Office that processes the appeals. Insofar as the Corporate Tax Office does not correct its decision, the appeal is assigned further to the Helsinki Administrative Court for decision.

The appeal must be made within three years of the calendar year of the period the refund decision concerns. However, the appeal period is always at least 60 days from receiving the notification of the decision, excluding the notification date. Decision documents are treated as having arrived to their recipients and therefore notified to them on the seventh day after the Tax Administration has sent them via postal services.

8 Codes used in VAT refund applications to Finland

The applicant must use the codes listed in the text of the Commission implementing Regulation (EU) No 79/2012, Annex III, to describe the nature of goods and services purchased in Finland.

The code is expressed by using both the main and the sub code (in format: x.y or x.y.z). Several codes may be used per invoice or import document if necessary. If the application were to contain codes that are not valid for Finland, or if it only displays a main expenditure code without the appropriate sub code, this part of the application may be rejected.

The following list covers the permissible codes for applications addressed to the Finnish Tax Administration:

1 Fuel
1.4 Fuel used specifically for test vehicles
1.6 Fuel purchased for resale
1.7 Fuel for means of goods transport
1.8.1 Fuel for passenger and multipurpose cars
Used exclusively for business purposes
1.8.2 Fuel for passenger and multipurpose cars
Used partly for commercial passenger transport, driving instruction or rental purposes
1.8.3 Fuel for passenger and multipurpose cars
Used partly for other than 1.8.2 purposes
1.9.1 Fuel for motorcycles, caravans and vessels for recreational or sports purposes, and aircraft with a mass less than 1 550 kg
Used for commercial passenger transport, driving instruction or rental purposes
1.9.2 Fuel for motorcycles, caravans and vessels for recreational or sports purposes, and aircraft with a mass less than 1 550 kg
Used for business purposes
1.12 Fuel for means of passenger transport other than 1.8 and 1.9.

2 Hiring of means of transport
2.4 Hiring of means of goods transport
2.5.1 Hiring of passenger and multipurpose cars
Used exclusively for business purposes
2.5.2 Hiring of passenger and multipurpose cars
Used partly for commercial passenger transport or driving instruction
2.5.3 Hiring of passenger and multipurpose cars
Used partly for other than 2.5.2 purpose
2.6.1 Hiring of motorcycles, caravans and vessels for recreational or sports purposes, and aircraft with a mass less than 1 550 kg
Used for commercial passenger transport or driving instruction
2.6.2 Hiring of motorcycles, caravans and vessels for recreational or sports purposes, and aircraft with a mass less than 1 550 kg
Used for other business purposes
2.12 Hiring or means of transport other than 2.5 and 2.6.

3 Expenditure relating to means of transport (other than goods and services referred to under codes 1 and 2)
3.4.1 Expenditure relating to means of goods transport
Purchase of a means of goods transport
3.4.2 Expenditure relating to means of goods transport
Maintenance of means of goods transport
3.4.3 Expenditure relating to means of goods transport
Garaging or parking of means of goods transport
3.4.4 Expenditure relating to means of goods transport
Expenditure relating to means of goods transport other than 3.4.1, 3.4.2 and 3.4.3.
3.5.1 Maintenance of passenger and multipurpose cars
Used exclusively for business purposes
3.5.2 Maintenance of passenger and multipurpose cars
Used partly for commercial passenger transport, driving instruction, or rental purposes
3.5.3 Maintenance of passenger and multipurpose cars
Used partly for business purposes other than 3.5.2
3.6.1 Maintenance of motorcycles, caravans and vessels for recreational and sports purposes, and aircrafts with a mass greater than 1 550 kg
Used for commercial passenger transport, driving instruction, or rental purposes
3.6.2 Maintenance of motorcycles, caravans and vessels for recreational and sports purposes, and aircrafts with a mass greater than 1 550 kg
Used for other business purposes
3.7.1 Expenditure, other than maintenance, garaging and parking relating to passenger and multipurpose cars
Used exclusively for business purposes
3.7.2 Expenditure, other than maintenance, garaging and parking relating to passenger and multipurpose cars
Used partly for commercial passenger transport, driving instruction or rental purposes
3.7.3 Expenditure, other than maintenance, garaging and parking relating to passenger and multipurpose cars
Used partly for purposes other than 3.7.2
3.8.1 Expenditure, other than maintenance, garaging and parking, relating to motorcycles, caravans and vessels, for recreational and sports purposes, and aircrafts with a mass greater than 1 550 kg
Used for commercial passenger transport, driving instruction, rental purpose or resale
3.8.2 Expenditure, other than maintenance, garaging and parking, relating to motorcycles, caravans and vessels, for recreational and sports purposes, and aircrafts with a mass greater than 1 550 kg
Used for other business purposes
3.15 Maintenance of means of passenger transport other than passenger and multipurpose cars, motorcycles, caravans and vessels for recreational and sports purposes, and aircraft with a mass greater than 1 550 kg
3.16 Garaging or parking of means of passenger transport
3.17 Expenditure, other than maintenance, garaging or parking relating to means of transport other than passenger and multipurpose cars, motorcycles, caravans and vessels for recreational and sports purposes, and aircraft with a mass greater than 1 550 kg.

5 Travel expenses, such as taxi fares, public transport fees
5.1 For the taxable person or an employee of the taxable person
5.2 For someone other than the taxable person, or an employee of the taxable person

6 Accommodation
6.1 Expenditure on lodging and accommodation for the taxable person, or an employee of the taxable person
6.2 Expenditure on lodging and accommodation for someone other than the taxable person or an employee of the taxable person
6.6 Expenditure on lodging and accommodation for onward supply
7 Food, drink and restaurant services
7.1.1 Food and drink provided by hotels, bars, restaurants and boarding houses, including breakfast
For the taxable person or an employee of the taxable person
7.1.2 Food and drink provided by hotels, bars, restaurants and boarding houses, including breakfast
For someone other than the taxable person or an employee of the taxable person
7.4 Restaurant services purchased for onward supply

8 Admission to fairs and exhibitions
8.1 For the taxable person or an employee of the taxable person
8.2 For someone other than the taxable person or an employee of the taxable person

9 Expenditure on luxuries, amusements and entertainment
9.1 Purchase of alcohol
9.2 Purchase of manufactured tobacco
9.3.1 Expenditure on receptions and entertainment
For publicity purposes
9.3.2 Expenditure on receptions and entertainment
Not for publicity purposes
9.5 Expenditure on works of art, collectors items and antiques

10 Other
10.2 Repairs within warranty period
10.3 Services connected with education
10.4.1 Work on property
Work on immovable property
10.4.2 Work on property
Work on immovable property used as a dwelling
10.4.3 Work on property
Work on movable property other than code 3
10.5.1 Purchase or hiring of property
Purchase or hiring of immovable property
10.5.2 Purchase or hiring of property
Purchase or hiring of immovable property used as a dwelling, or for recreational or leisure use
10.5.3 Purchase or hiring of property
Purchase or hiring of movable property connected with or used in immovable property used as dwelling, or for recreational or leisure use
10.5.4 Purchase or hiring of property
Purchase or hiring of movable property other than code 2
10.8 Office expenses
10.9.1 Participation in fairs and seminars, education or training
Fairs
10.9.2 Participation in fairs and seminars, education or training
Seminars
10.9.3 Participation in fairs and seminars, education or training
Education
10.9.4 Participation in fairs and seminars, education or training
Training
10.11 Expenditure on postage of mail to countries outside the EU
10.12 Expenditure on fax and phone in connection with accommodation
10.13 Goods and services acquired by a travel organiser for the direct benefit of the traveller
10.14 Goods purchased for resale other than 1.6
10.15 Services purchased for resale other than 6.6 ja 7.4
10.16.1 Work on property
Work on immovable property used as a residence, recreational or leisure facility
10.16.2 Work on property
Work on immovable property other than 10.16.1
10.16.3 Work on property
Work on movable property connected with or use of an immovable property in 10.6.1
10.16.4 Work on property
Work on movable property other than 10.16.3
10.17.1 Expenditure on property
Expenditure on immovable property used as a dwelling, or for recreational or leisure use
10.17.2 Expenditure on property
Expenditure on immovable property other than what is referred to by code 10.17.1.