The Finnish Tax Administration will not collect late-filing penalties for VAT returns from foreign companies in March-September due to delays in development work

News, 6/1/2022

Between 1 March and 30 September 2022, the Finnish Tax Administration will not collect late-filing penalties for missing VAT returns from companies that are registered in the EU One Stop Shop (OSS) system and that have Finnish customers.

For the same reason, the Tax Administration will not send payment reminders to companies registered in the OSS system in March-September, even though it would seem that the company has not paid VAT.

This is because some EU Member States have had difficulties implementing the new OSS system.

“As we cannot know whether a company has failed to pay VAT or whether the payments are missing due to transfer delays, we will not send payment reminders to companies that are registered in the OSS system or collect penalties from them,” says Lauri Taskinen, Tax Specialist at the Tax Administration.

If a company pays other taxes to Finland in addition to VAT paid through the OSS system, the company will receive a summary that contains a payment reminder of the overdue tax in the usual manner.

The exceptional measures do not mean exemption from VAT

The Tax Administration’s decision not to send payment reminders or collect late-filing penalties is an exceptional measure that has been discussed with other EU Member States. Each Member State is responsible for collecting its own taxes and penalties, which means that you cannot cite Finland’s decision in connection with another Member State’s collection procedures.

However, the current exceptional measures do not mean exemption from VAT.

“VAT that is partially or fully unpaid accrues interest in the usual way, i.e. from the day following the due date up to the payment date. Once the technical difficulties have been sorted out, Finland will collect the unpaid taxes owed to it,” says Taskinen.

The One Stop Shop is a VAT special scheme used within the EU. It was launched in July 2021. The purpose of the OSS is to make it easier for companies to pay VAT in situations where they have customers in multiple EU countries.

About 35,000 foreign companies are registered in the OSS system in Finland. These companies sell products or services to Finnish customers and are therefore liable to pay tax to Finland.

Further information about the OSS system:

When the Member State of consumption is Finland: returns within the special scheme and payments to Finland