Calculate the import VAT on the taxable amount

The scope of Customs competence regarding value added tax on importation changed on 1 January 2018. The value added taxation was transferred from Customs to the Tax Administration in situations where the importer is included in the register of VAT payers. The change concerns the importation of goods to Finland from outside the customs territory and fiscal territory of the EU, or from the customs territory of the EU but outside its’ fiscal territory, for example from the Canary Islands. Customs is responsible for the value added taxation upon import if the party liable to pay tax is not included in the register of VAT payers at the time when the obligation to pay tax arises. 

The import VAT payable on goods is primarily based on the customs value.

Exceptions to this are provided for in the Value Added Tax Act and comprise computer programs saved in a data storage medium and goods that have been treated outside the EU. Check the Points to consider section for exceptional bases of taxation mentioned in the Value Added Tax Act.

The taxable amount for VAT on importation includes the cost of transport, loading, unloading and insurance of the goods, as well as other costs related to the importation to the first place of destination in Finland specified in the transport contract. If, at the time of customs clearance, it is known that the goods will be transported to another destination located within the EU, the costs incurred up to this destination will be included in the taxable amount.

Added to the taxable amount are also the taxes, customs duties and any other import charges payable to the State or to the Union in connection with the import customs clearance, excluding VAT. Taxes and other charges payable outside Finland are also included in the taxable amount. The VAT on importation to be levied is calculated from this total amount. 

Points to consider

1. Data storage media and ADP programs stored on a medium

When a computer program is brought into the country stored on a data medium, the tax treatment depends on whether the program is a so-called standard program or a special program. When the program stored on the medium is a special program, the tax treatment depends on whether the importer is an entrepreneur, a legal person included in the register of VAT payers or someone else, for instance a private person.

An ADP standard program is a so-called normal program, i.e. a mass-produced product available to all customers. The program package often includes service, installation and training. A PC program, a home computer program and game packages belong in this group of programs including, among others, standard packages for security and other devices. The importer’s status does not affect the tax treatment of a standard program. The initial value for determining the tax treatment is the joint value of a data medium and ADP standard program stored thereon.

Other than standard programs are called ADP special programs in the Value Added Tax Act. Importation of a data medium and a special program stored thereon is taxable if the importer is any other than an entrepreneur or a legal person included in the register of VAT payers. Then the taxable amount is the joint value of the data medium and the ADP program, i.e. the special program is taxed in the same way as a standard program.

Importation of a data medium and a special program stored thereon is tax-free if the importer is an entrepreneur or a legal person included in the register of VAT payers. However, the data medium must always be cleared through Customs upon import.

2. Goods treated outside the EU

The taxable amount for goods, which have been outside the EU for repair, manufacture or other treatment, as well as for goods of the same type imported in place of goods exported for repair, is the amount of costs of the repair, the treatment, or corresponding other costs, and the costs of the dispatch, as well as the value of parts incorporated in the goods outside the EU.

Value added tax must also be paid on the value that is accumulated abroad for the goods as well as on the transport costs and other costs resulting from the exportation and importation of the consignment. Therefore, the items mentioned in section ‘What costs should be added to the taxable amount?’ should also be included in the taxable amount.

The abovementioned taxable amount is also implemented when a defective item has been exported to a non-EU country, destroyed under an authority’s supervision or abandoned to the State without causing expenses to the latter, and before duties and taxes have been recorded for a replacement item.

However, this provision does not apply if the goods are sold exempt from tax as export goods to a non-EU country, or if such goods have been used in Finland in a way that entitles to a deduction and are exported to a non-EU country and sold there. In these cases, the taxable amount on importation back to Finland is determined according to standard rules, i.e. a customs value that includes the costs laid down in the Value Added Tax Act, is added to the goods.

3. Goods sold at customs auction

The taxable amount levied on goods sold at a customs auction is the auction price of the goods.

4. Temporary storage, procedures for customs warehousing and free zones

For storage procedures as referred to in Article 237 of the Union Customs Code (procedures for customs warehousing and free zones) as well as for temporary storage in accordance with Article 144 of the Customs Code, the initial value of value added tax is the customs value of the imported goods.

If the imported goods are subject to such services, which have been sold by virtue of Article 72 h, section 5, the value or compensation for these tax exempt services is included in the amount of VAT on importation. Therefore, such tax exempt services are taxed upon import. Defined in the following chapter are also charges, taxes and other charges payable that are included in the taxable amount.

Goods stored temporarily as well as goods stored under warehousing and free zone procedures can be sold free of tax before clearing them through Customs; such sales can be several. The initial value of the taxable amount for the importation of such goods is determined according to the last sales price. If the goods, since the last sale, have been subject to the mentioned services exempt from taxes, then only the value of services rendered since the last sale are added to the taxable amount. Additionally, the following chapter defines other costs, taxes and other charges payable that are included in the taxable amount.

What must be included in the taxable amount?

The following costs are also included in the taxable amount:

1.Cost of transportation, loading and other such costs THT 50/2016 (Customs information bulletin in Finnish and Swedish)

2.Import taxes and charges

Included in the amount of value added tax on importation are also all the taxes, customs duties and any other import charges payable to the State or to the EU in connection with the import customs clearance, excluding value added tax. Taxes and other charges payable outside Finland are also included in the taxable amount.

However, these taxes and charges are not included in the taxable amount of goods sold at a customs auction.

Import taxes and charges that are levied for goods in connection with import customs clearance include anti-dumping and countervailing duties as well as oil waste duty. Car tax and oil damage duty are e.g. not included in the taxable amount for VAT.

There are instructions for including excise duty in the taxable amount for VAT upon import: Value added taxation on importation of excise goods from 1 January 2018 (PDF in Finnish)

The oil waste duty is included in the taxable amount for VAT on importation in the same way as the excise duty.