Import VAT

If a company is registered for VAT with the Finnish Tax Administration, Customs will not confirm the exemption from import VAT or the amount of VAT. However, an import declaration must always be submitted to Customs. If the party liable to pay tax is not registered for VAT when the customs declaration is accepted, the import VAT will be levied by Customs. You can check

Value added tax (VAT) is payable on the import of goods which takes place in Finland. Import with partial relief from import duty and import of goods under the end-use procedure are also subject to VAT. Under Points to consider, you can read more about import which takes place in Finland.

VAT and customs debt must be paid e.g. when Customs accepts a customs declaration for goods that are imported from outside the customs and fiscal territory of the EU and that are to be released for free circulation. Read more about incurrence of a customs debt.

The Finnish Tax Administration is responsible for the import VAT for VAT-registered businesses

The Finnish Tax Administration is responsible for the import VAT for VAT-registered businesses. VAT-registered businesses file and pay VAT online in the Tax Administration’s MyTax service. Read more about how to file and pay VAT on the Tax Administration website.

Customs is responsible for the supervision and levy of VAT in certain cases

Customs is responsible for the supervision and levy of VAT in cases referred to in section 160 of the Value Added Tax Act (VAT Act). Customs levies the import VAT on private individuals as well as on businesses not registered for VAT.

Customs is responsible for levying VAT on all importers in cases of non-compliance or failure to fulfil obligations or when the conditions of the Customs Code are not met. Such cases are, for example, the following:

  • A person liable to pay VAT has imported goods unlawfully. A business has e.g. imported goods without declaring them to Customs, and Customs notices this during an import control.
  • A person liable to pay VAT has failed to fulfil an obligation provided for in the Customs Code. A company has e.g. not complied with the time limits for the customs procedure, so the time limit has expired when the company request discharge of the procedure. However, Customs will not levy VAT, if a company neglects obligations related to the end-use procedure. Instead, the company must then see to that a VAT return is submitted to the Finnish Tax Administration.
  • A person liable to pay VAT does not meet a condition set out in the Customs Code. However, Customs will not levy VAT, if the goods have been placed under the end-use procedure and Customs notices during a control that the goods have not been used for the purpose required by the procedure.

Liability to pay import VAT

The declarant is liable to pay VAT on the import of goods (UCC Article 5(15)). An exception to this is indirect representation, where the principal (importer) is liable to pay import VAT.

In the trade between Åland and mainland Finland, an exporter with an Åland tax border number can assume responsibility for the import VAT as an indirect representative on behalf of an importer, if the importer is a private individual or some other consignee not registered for VAT in Finland. Read more: Regulation 10/2022 of Finnish Customs on the customs clearance formalities for union goods transported between the region of the Åland Islands and the rest of Finland tab (available in Finnish and Swedish)

In addition to the taxpayer, the person who in accordance with the provisions of the Union Customs Code is liable for the payment of the customs debt is also liable for the import VAT and for its payment (Value Added Tax Act, section 86b subsection 2).

When Customs as the competent authority levies the import VAT and the person acting as the representative knew or should have known that incorrect information has been provided in the customs declaration, the following are jointly and severally liable for the payment of tax:

  • in the case of direct representation on guarantor’s liability: in addition to the declarant, the person acting as a direct representative.
  • in the case of indirect representation: in addition to the representative’s principal, the person acting as an indirect representative.

In the case of customs auction, the buyer of the goods is liable for the payment of tax.

Example 1. The principle does not have a Finnish Business ID, and indirect representation is used. In this case, the indirect representative is also responsible for the import VAT and for any post-clearance 

Example 2. The company has a Finnish Business ID and is registered for VAT. According to the warehouse records, alcohol has disappeared from the company’s customs warehouse. The excise duties and VAT shall be paid by the warehouse keeper with a Finnish Business ID: Despite the VAT registration, the taxes will be levied by Customs, not by the Finnish Tax Administration, because the goods were unlawfully introduced.

More information: How to pay a customs invoice

Import VAT special schemes

In some cases, a special scheme (IOSS) can be used for paying the import VAT. If a company wishes to register for the IOSS special scheme in Finland, it shall file its registration in the Finnish Tax Administration’s MyTax service. The special arrangement (SA) intended for transport companies can also be used for imports. In that case, the transport company shall register with Customs.

Special scheme (IOSS)

A private individual or a trader not registered for VAT can pay the VAT for an arriving low value consignment by using the VAT special scheme (IOSS). Please note that the Finnish Tax Administration uses the term “import scheme” for the VAT special scheme.

The VAT special scheme (IOSS) can be used in the case of distance sales of goods imported from outside the EU to consumers, when the actual value of the consignment does not exceed 150 euros. Before the company can use the VAT special scheme for distance sales to consumers, it must first register. If the VAT was paid using the special scheme, the IOSS number must be provided in the customs declaration. Read more about the special arrangement concerning low value goods.  

The VAT special scheme (IOSS) can be used in the case of distance sales of goods imported from outside the EU to consumers, when the actual value of the consignment does not exceed 150 euros. Before the company can use the VAT special scheme for distance sales to consumers, it must first register. Read more about applying for VAT special scheme registration on the Finnish Tax Administration website.

You can read more about the VAT special schemes (in Finnish) on the Finnish Tax Administration website and about the IOSS number in customs clearance.

Special arrangement (SA)

The special arrangement (SA) can be used by a transport company that acts as a representative for the consignee who is a private individual or some other operator not registered for VAT, and that submits import declarations on behalf of this individual or operator.

To use the special arrangement (SA), the trader must register with the Customs Authorisation Centre. The special arrangement can only be used for customs declarations for low value goods. Low value consignments are consignments that are worth no more than 150 euros, excluding shipping costs payable separately, and that do not contain goods subject to excise duties or restrictions. Read more about the special arrangement concerning low value goods. 

Other things to note

The Åland Islands are not part of the fiscal territory of the EU, so when goods are moved from mainland Finland or from other EU countries to Åland, import VAT must be paid for them. Import VAT must also be paid when goods are moved from Åland to mainland Finland.

A customs declaration shall also be submitted to Customs for goods imported to and exported from Åland. In addition to lodging a customs declaration, VAT-registered importers shall also declare the import VAT to the Finnish Tax Administration on their own initiative. If the importer is not registered for VAT, e.g. a private individual, the import VAT will be levied by Customs.

Imports from non-EU countries to Åland are subject to the same provisions as imports from outside the EU to mainland Finland. Customs declarations must be lodged for the goods, and VAT-registered importers shall also declare the import VAT to the Finnish Tax Administration on their own initiative. If the importer is not registered for VAT, e.g. a private individual, the import VAT will be levied by Customs.

Read more about Åland and VAT (in Finnish) on the Finnish Tax Administration website or about Åland and customs declarations.

Import of goods refers to the entry of goods into the EU. The import of goods takes place in Finland if the EU point of entry is in Finland. Import comprises e.g.

  • import from outside the customs and fiscal territory of the EU, e.g. from China, directly to Finland
  • import from Åland to mainland Finland as well as from mainland Finland or another EU country to Åland
  • import to Finland from within the customs territory EU but from outside the fiscal territory of the EU, e.g. from the Canary Islands.

Import also takes place in Finland when the customs procedure that postpones the payment of tax is discharged or ends when the goods are in Finland. Procedures that postpone the payment of tax:

  • a storage procedure referred to in Article 237 of the Union Customs Code (UCC)
  • temporary storage (UCC Article 144)
  • the inward processing procedure (UCC Article 256)
  • the temporary admission procedure with total relief from import duty (UCC Article 250)
  • the external transit procedure (UCC Article 226)
  • the internal transit procedure (UCC Article 227)
  • one of the above-mentioned procedures, when the goods are imported from within the customs territory of the EU, but from outside the fiscal territory of the EU. For example, if goods brought from the Canary Islands to Finland are in Finland when the internal transit procedure ends, import takes place in Finland.

When Union goods placed under the internal transit procedure in another EU Member State (within the customs and fiscal territory) are brought into Finland through a region that is not part of the customs and fiscal territory of the EU, import is not regarded as import referred to in the Value Added Tax Act, because it is a case of intra-Community trade. If goods brought into Finland e.g. from Ireland are transported through the United Kingdom and the T2 transit procedure is discharged in Finland, the import is not regarded as import referred to in the Value Added Tax Act.

The term “Union goods” refers to goods manufactured in the customs territory of the EU or goods imported from outside the customs and fiscal territory of the EU and released for free circulation.

In value added taxation, the terms “Member State” and “Community” refer to the VAT territory of a Member State and of the Community (of the EU) as defined in the legislation of the European Communities. See the list of the states and territories that are part of the VAT territory of the EU.

More information:

The national Value Added Tax Act (1501/1993) (in Finnish), with references to customs legislation, is applied to VAT on imports.

Customs legislation applicable to customs taxation

such as the national Customs Act 304/2016 and the Union Customs Code 952/2013.

Customs legislation is applicable to the value added taxation of imported goods that Finnish Customs is responsible for. Unless otherwise provided for by the Value Added Tax Act, the following are the responsibility of Finnish Customs:

  • import of goods, payment, refund and recovery of tax and other procedures
  • deferment of tax payment
  • guarantees
  • tax increase
  • penalty fee
  • reassessment
  • appeals
  • confidentiality of information as well as disclosure and receipt of confidential information.

On the Finnish Customs website, on the page Customs legislation (in Finnish), there are links to applicable legislation,

Åland

The Value Added Tax Act is applicable to the import of goods to Åland from mainland Finland, from another Member State or from outside the fiscal territory of the EU as well as to the import of goods from Åland to mainland Finland, unless otherwise provided for by the Act on exceptions to value added tax and excise duty legislation for the region of Åland (1266/1996) (available in Finnish and Swedish).

Read more on the Finnish Tax Administration website, on the page Tax border between Åland and Mainland Finland – import of goods

Updated: