As a foreign company when can I sell service to a Finnish business operator without VAT and when do I have to charge the service with Finnish VAT?
Essential in VAT is to understand what is the place of sale of the service. When selling to business operators, the place of sale of the service is Finland if the service has been delivered to a fixed establishment in Finland. If the service has not been delivered to a fixed establishment, the service is being sold in Finland if the domicile of the buyer is in Finland. This is the general rule in selling services.
If the seller is not liable for VAT in Finland and does not have fixed establishment in Finland, reverse charge is applied. This means that liable for VAT is the buyer , not the seller as usual. To prove that your transaction is intracommunity trade you need buyer's VAT id.
A foreign company C sells consulting service to a Finnish company A. Place of sale of the service is Finland. Liable for VAT is the buyer. The seller sends an invoice without Finnish VAT.
The above mentioned rules are so called main rules and they are being applied generally to services. However, there are some exceptions.
- Services related to real estate are sold in Finland if the real estate is situated in Finland
- Passenger transportation service is sold in Finland if the transport is carried out in Finland
- Short time rent of a vehicle is sold in Finland if the vehicle is in Finland when starting the rent period
- Selling tickets to education, science, culture, entertainment and similar events are sold in Finland if the event is in Finland
- Restaurant and catering services are sold in Finland if the services are arranged in Finland
- Travel agent services are sold in Finland if the travel agent works in Finland