VAT invoice requirements

This is an unofficial translation. The official instruction is drafted in Finnish (Laskutusvaatimukset arvonlisäverotuksessa, record number VH/3634/00.01.00/2023) and Swedish (Faktureringskraven vid mervärdesbeskattningen, record number VH/3634/00.01.00/2023) languages.

These instructions concern VAT requirements for invoicing.

These instructions replace the instructions ‘VAT invoice requirements’ issued on 27 September 2019. The instructions have been updated taking into account changes in legislation and terminology. Chapter 2 of the previous instructions has been removed as a matter relating more closely to accounting than to VAT invoice requirements. Examples 7, 8 and 16 have been added. Other additions and clarifications to the instructions have also been made.

In these instructions, distance selling refers to distance selling within the meaning of section 19a of the Value Added Tax Act. In accordance with section 8 of the Value Added Tax Act, joint county authorities for wellbeing services and the City of Helsinki and HUS Group, which are responsible for organising healthcare, social welfare and rescue services, are equated with wellbeing services counties in these instructions. Similarly, joint municipal authorities, the province of Åland and municipalities in Åland are equated with municipalities in these instructions.

The Finnish Accounting Standards Board has issued a guide on 31 October 2017 on the principles of VAT accounting. The Board also released a general guideline on 20 April 2021 regarding accounting methodology and materials.

1  General information on VAT rules on invoicing

Invoices have a vital importance in value added taxation. Invoices are a source of information on how the seller has treated its VAT liability and invoices also serve as proof of VAT deductibility for the purchaser. Invoices are a basis for various tax control operations, as well.

The general understanding is that the rules governing invoicing must be uniform in all EU member states to ensure the proper functioning of the internal market. The EU regulations on invoicing can be found in the VAT Directive (2006/112/EC). Articles 217 to 240 of the VAT Directive contain regulations on the concept of invoice, the issue and content of invoices, and electronic invoicing. Article 178 contains provisions on holding an invoice in order to exercise the right of VAT deduction, and Articles 241 to 249 contain provisions on how invoices should be stored. Because of these EU regulations, the national rules in the Member States on invoicing are almost entirely harmonised.

In the Finnish Value Added Tax Act (arvonlisäverolaki, 1501/1993), the applicable legal provisions are in Chapter 22 (sections 209a to 209u). Provisions on invoices as the precondition for the right to deduct are included in section 102a of the Value Added Tax Act.

2 Concept of invoice

The provisions in the Value Added Tax Act refer to the concept of invoice. In the Value Added Tax Act and in these instructions, ‘invoice’ refers, as provided in the VAT Directive, not only to traditional invoices but also to other vouchers and documents acting as invoices. By extension, ‘invoice’ also refers to all corrective invoices, vouchers and notices that contain a change or a reference to the original invoice. Invoices may be handed to the purchaser as paper documents or in electronic format (provided that the recipient has given the consent to electronic invoicing). ‘Electronic invoice’ refers to an invoice given and received in electronic format. It is not permissible for EU Member States to lay down any specific conditions for electronic invoices. Sellers may combine several sold goods and services into one single invoice.

An invoice may consist of several separate documents. For this reason, the actual invoice does not have to contain all the details required by the Value Added Tax Act if the information is given in other documentation that has been made available to both the purchaser and the seller. Also in such a case, it is required that the actual invoice contains a clear reference to such other documentation. For example, there may be a reference to a dispatch note that contains information on the goods sold to the purchaser. It suffices that all the required VAT information is shown on the combined set of documentation that consists of the invoice and its referenced materials. However, the above rule does not apply to distance selling, to intra-community supply of goods or to any sales of goods or services in another EU Member State subject to the VAT reverse charge mechanism, making the purchaser liable to pay the VAT. The invoices given for such sales must contain all the required information.

Independent contractors need not enclose the contract with every invoice, however. It suffices to refer to the contract by its number and date, and set out the ordinal number of the instalment being billed on the invoice. When granting rights to use immovable property subject to VAT, the agreement between the lessor and the tenant with the related bank transfer forms may make up the ‘invoice’. Alternatively, it is permissible to include all the required information in the lease and not send any receipts at all.

An invoice issued by a credit card company is not considered an invoice issued by a seller of goods or services. This means that the itemisation printed on the card company’s invoice of the cardholder’s purchases is not an invoice that entitles to VAT deductions. Instead, to be eligible for the deduction, the purchaser must have the invoice from the actual seller of the goods/services.

It is not required that the heading of an invoice actually says “Invoice”. For VAT purposes, a document is considered an invoice when it meets the conditions on information content and references to other documents.

When a seller sends a set of several electronic invoices to the same recipient, the required information that is shared by all the invoices need be mentioned only once provided that all the information for each invoice is available from the purchaser or seller.

In certain circumstances, procuring entities that engage in public procurement must be able to receive electronic invoices compliant with the European Standard for eInvoicing. Procuring entities and operators of trade or business have the right to demand such invoices pursuant to sections 3 and 4 of the Act on Electronic Invoicing by Procuring Entities and Operators of Trade or Business (laki hankintayksiköiden ja elinkeinonharjoittajien sähköisestä laskutuksesta, 241/2019). However, this does not apply if electronic invoicing could lead to the disclosure of confidential information or could jeopardise national security. The provision is not applicable to the invoicing of private persons, either.

3 Which EU Member State’s invoicing rules are applicable?

3.1 Main rule

If the Member State where the selling takes place is Finland (under the provisions in Chapter 5 of the Value Added Tax Act), the provisions on invoicing in the Finnish Value Added Tax Act apply.

3.2 Exceptions

The provisions on invoicing in the Value Added Tax Act also apply in the following situations when the seller supplies the goods or services from a fixed establishment located in Finland or, if the supply is not carried out from any fixed establishment, if the seller’s domicile is in Finland, and:

• the seller issues an invoice for the sale of goods or services that takes place in another EU Member State for which the purchaser is liable to pay VAT due to the VAT reverse charge mechanism, i.e. the seller has no domicile or fixed establishment that is being used for the purpose of selling the goods or services in the EU Member State concerned;
• the place where the goods or services are sold – the place of supply – is a country outside the EU.

The fixed establishment referred to above is the seller’s establishment where the goods or services are supplied, making use of the personnel and other resources of that fixed establishment.

The provisions on invoicing in the Value Added Tax Act also apply to the invoicing of sales declared under the special scheme referred to in Chapter 12a of the Value Added Tax Act if the Member State of identification is Finland. For more information, see guidance Arvonlisäveron erityisjärjestelmät of the Finnish Tax Administration (in Finnish only).

The provisions of the Value Added Tax Act are not applicable to sales in Finland by a seller established in another EU Member State for which the purchaser is liable to pay VAT due to the VAT reverse charge mechanism, and for which the seller issues the invoice. If the purchaser is the party that issues the invoice, the provisions of the Value Added Tax Act become applicable. ‘Seller established in another EU Member State’ refers to a seller that has a fixed establishment located in another EU Member State through which the sales (supply of goods or services) are carried out. If the sales are not carried out from a fixed establishment, ‘seller established in another EU Member State’ refers to a seller whose domicile relating to the seller’s business activity is located in another EU Member State.

The provisions on invoicing in the Value Added Tax Act do not apply to sales declared under the special scheme referred to in Chapter 12a of the Value Added Tax Act if the Member State of identification is a Member State other than Finland.

3.3 Summary of situations where Finnish Value Added Tax Act is applicable to invoicing

Below, ‘VAT liable person established in Finland’ refers to a VAT liable person that supplies the goods or services from a fixed establishment located in Finland. If the supply of goods or services is not carried out from any fixed establishment, ‘VAT liable person established in Finland’ means that the person’s domicile (for the operation of the VAT liable person’s business) is in Finland.

The invoicing provisions in the Finnish Value Added Tax Act are always applied when

• a VAT liable person established in Finland sells goods or services and the country of supply is Finland;
• a VAT liable person established in Finland sells goods to another EU Member State as intra-community supply;
• a VAT liable seller established in Finland issues an invoice for the supply of goods or services carried out in another EU Member State to which the VAT reverse charge applies, and the purchaser must pay the VAT;
• a purchaser established in Finland issues an invoice for sales by a seller established in another EU Member State to which the VAT reverse charge applies, and the purchaser must pay the VAT;
• a VAT liable person, established in Finland, sells goods or services and the country of supply is outside the EU
• Finland is the Member State of identification for sales declared under the special scheme referred to in Chapter 12a of the Value Added Tax Act;
• a seller from outside the EU sells goods or services in Finland.

‘A seller from outside the EU’ refers to a seller who is not established in the EU, i.e. one who does not sell goods or services from a fixed establishment located in EU territory. If there is no sales from a fixed establishment, ‘seller from outside the EU’ means a seller whose domicile is outside the EU.

3.4 Examples

4 Obligation to issue invoice

4.1 General

Sellers must issue invoices for sales specified in Section 4.2 below (section 209b of the Value Added Tax Act). For other sales, sellers do not have to issue an invoice that meets the requirements of the Value Added Tax Act concerning the information content of an invoice. However, sellers must write up a voucher of the sale, for purposes of accounting or recordkeeping. If a seller issues several invoices for one sales transaction, reference must be made to the earlier invoices concerning the same transaction.

The seller must issue the purchaser with an invoice if the purchaser is an operator of trade or business or a legal person not operating a trade or business for any taxable sales of goods or a services. Invoices must also be issued for VAT-exempt sales which give the seller the right to a VAT refund (for more information, see Section 4.2.2). In addition, a seller must issue an invoice for certain sales transactions that are legally exempt from VAT in Finland if the place of supply is another EU Member State (for more information, see Section 4.2.3).

Invoices must also be issued for distance selling, the sales of new means of transport to private persons in other EU Member States, the sales of services and goods related to healthcare and social services to municipalities or wellbeing services counties, advance payments, adjustment entries and compensations.

In addition, the obligation to issue an invoice applies to the transfer of a business or a part thereof as referred to in section 19c of the Value Added Tax Act.

There is no obligation to issue an invoice for advance payments for goods sold as intra-community supply. The time when an invoice must be issued for such sales transactions is by the date when the goods are delivered.

An invoice need not be issued for sales that must be declared under the special scheme (Union scheme) referred to in section 133k of the Value Added Tax Act either.

Sellers have the right to issue invoices also for sales transactions for which there is no invoicing obligation.

4.2 Sales transactions for which the seller must issue an invoice

4.2.1 Taxable sales

For the sales of goods or services subject to tax, the seller must issue an invoice to a purchaser who is an operator of trade or business or a legal person not operating a trade or business. ‘Taxable sales’ refers to sales for which VAT must be paid in accordance with the provisions of the Value Added Tax Act. Taxable sales also refers to sales transactions where the purchaser, due to the VAT reverse charge mechanism, is the party that must pay the VAT.

When the purchaser issues an invoice, it is regarded as an invoice issued by the seller if the purchaser and the seller agreed on this arrangement and if there is a way for the seller to approve the invoice (for more information, see Section 4.4 – Self-billing).

4.2.2 VAT-exempt sales

A seller must issue an invoice to an operator of trade or business or a legal person not operating a trade or business for the following VAT-exempt sales transactions:

• sales of goods and services to the European Commission or an EU agency or body in response to the COVID-19 pandemic in certain situations (section 38d of the Value Added Tax Act);
• sales and brokerage of investment gold (section 43a of Value Added Tax Act);
• sales of an edition of a newspaper or periodical to an corporation that promotes the public good (section 56 of the Value Added Tax Act);
• sales, hiring out or chartering of vessels with a maximum hull length of at least 10 meters and work and equipment concerning such vessels (section 58 of the Value Added Tax Act);
• sales of gold to a central bank (section 59, subsection 1.4 of the Value Added Tax Act);
• sales of goods within international trade (sections 70 and 70b of the Value Added Tax Act);
• sales of services within international trade (sections 71 and 72 of the Value Added Tax Act);
• intra-community supply of goods (sections 72a–c of the Value Added Tax Act);
• sales of goods and services to embassies and other missions of a similar status, to the offices of career consuls, or to their staff, situated in other Member States, international organisations, bodies of the European Union and military forces of States belonging to the North Atlantic Treaty Organization and the military forces of other EU Member States in certain situations (section 72d of the Value Added Tax Act);
• sales of motor vehicles in certain situations (section 72e of the Value Added Tax Act);
• sales relating to warehousing arrangements, free zones and free warehouses (section 72h of the Value Added Tax Act).

For other domestic VAT-exempt sales, sellers do not have to issue an invoice that meets the information requirements of the Value Added Tax Act.

4.2.3 Sales defined as VAT-exempt in Finland, carried out in another EU Member State

Sellers must issue an invoice for certain VAT-exempt sales to operators of trade or business or legal persons when the transaction is carried out in another EU Member State. Such VAT-exempt sales include:

• VAT-exempt sales of goods and services by corporations that promote the public good (section 4 of the Value Added Tax Act);
• VAT-exempt sales by religious societies (section 5 of the Value Added Tax Act);
• supplies of immovable property (section 27 of the Value Added Tax Act);
• sales of healthcare and medical care services, including some related goods and services (sections 34 and 36 of the Value Added Tax Act);
• sales of services in the form of social welfare and educational services (sections 37 and 39 of the Value Added Tax Act);
• payment of fees to performing artists and the sales of certain immaterial rights (section 45 of the Value Added Tax Act);
• sales of bank notes and coins that are legal tender, the organisation of lotteries, the sales of services related to funeral services and the sales of self-picked wild berries and mushrooms (section 59, subsections 1.1–1.3 and 1.6 of the Value Added Tax Act);
• sales of goods and services by a blind person and sales of goods and services subject to restrictions on deduction (sections 60 and 61).

There is no obligation to issue an invoice according to the Value Added Tax Act if the above goods or services were sold outside the EU.

4.2.4 Distance selling and sales of new means of transport to private persons

A seller must issue an invoice for distance selling and for the sales of a new means of transport to a private person in another EU Member State (section 19a and section 72b, subsection 5 of the Value Added Tax Act).

However, an invoice need not be issued for intra-Community distance selling that must be declared under the special scheme (Union scheme) referred to in section 133k of the Value Added Tax Act.

4.2.5 VAT-exempt sales to municipalities or wellbeing services counties

A seller must issue an invoice for the sales of tax free goods and services in the form of health care, medical care or social welfare to a municipality or a wellbeing services county for which the municipal customer is eligible to a refund of a calculated tax (section 130a of the Value Added Tax Act).

4.2.6 Advance payments

A seller must issue an invoice to the purchaser for any advance payments with the exception of advances relating to intra-community supply of goods. Advance payments – also known as prepayments – are compensations the seller receives prior to the delivery of the goods or services. If the entire amount has not been invoiced in advance, the seller must also issue an invoice when they complete the delivery of the goods or services. For the sake of clarity, it is recommended that the seller only invoices the remaining amount at this stage. Alternatively, the previously invoiced advance payments may be listed on the final invoice. However, this must be done in such a way as to avoid confusion, and reference must be made to the earlier invoices issued.

4.2.7 Adjustment entries

A seller must issue a purchaser with an invoice for any adjustments, such as annual and turnover discounts, purchase and sales rebates, surplus refunds and other such adjustment entries and returned packaging and transport appliances concerning sales discussed above in Sections 4.2.1–4.2.5, unless the adjustments have already been taken into account in a previous invoice. These invoices do not have to contain information on unit prices.

No invoice is necessary if the adjustments, compensations or similar amounts have already been taken into account in a previous invoice, either directly in the price of the goods or services, or otherwise.

The seller must issue an invoice also in a case where the price has changed for another reason after the issuance of the initial invoice, or if the entire sales transaction has been cancelled.

4.3 Operators of trade or business with group registration for VAT and reindeer owners

The invoicing provisions of the Finnish Value Added Tax Act apply to reindeer owners belonging to a reindeer herding co-operative within the meaning of the Reindeer Husbandry Act (poronhoitolaki, 848/90). Invoices need not be issued for sales within a so-called ‘group of persons liable to VAT’, or sales between reindeer owners included in the same herding co-operative.

4.4 Self-billing

In some cases, the purchaser may issue an invoice on behalf of the seller. Self-billing is a common practice in several industries, including the procurement of timber and various sectors where operators of trade or business buy goods from primary producers. However, the seller is always responsible for the accuracy of the invoice.

An invoice issued by the purchaser is regarded as an invoice issued by the seller if the purchaser and the seller have agreed on this arrangement and there is a way for the seller to approve each invoice that the purchaser issues.

The agreement on the arrangement may also be tacit, i.e. implied or inferred by the trade usage and course of dealing. The purchaser must submit a copy of every self-billing invoice to the seller for approval. The approval of invoices may also be tacit: if the seller does not give any comments regarding the contents of invoice within a reasonable time, the seller will be considered to have approved it.

If the seller finds the self-billing invoice to be inaccurate, the seller must issue an invoice that meets the requirements of the Value Added Tax Act. This invoice must contain a reference to the original invoice issued by the purchaser.

4.5 Outsourced invoicing

Sellers can make arrangements with a service provider to have their invoicing work outsourced. However, the transfer of invoicing tasks to another company does not remove the seller’s invoicing obligations under the Value Added Tax Act.

4.6 Time limit for issuing an invoice

When a seller has sold goods as intra-community supply, the seller must issue an invoice by the 15^th day of the calendar month following the supply of the goods.

If the seller sells services and a general VAT rule of another EU Member State corresponding to section 65 of the Finnish Value Added Tax Act applies, the seller must issue the invoice by the 15^th day of the calendar month following the month in which the services were supplied.

The issue date of an invoice is the date when the party that issues it has made it available to the other party. For example, an invoice in electronic format can be presented to the recipient directly by email or via one or several service providers. It may also be made available to the recipient by posting it in a web portal.

The Value Added Tax Act does not define any other time limits for issuing an invoice except the ones discussed above.

5 Information shown on an invoice

5.1 Requirements for the information content on an invoice

The following information is required (under section 209e of the Value Added Tax Act):

• Date of issue
• A unique sequential number
• Seller’s VAT identification number
• Purchaser’s VAT identification number if the VAT reverse charge applies, or if it is a question of the intra-community supply of goods
• Names and addresses of the seller and purchaser
• Quantity and nature of the goods supplied, or the extent and nature of the services supplied
• Date on which the supply of goods or services was made or completed, or the date on which a prepayment was made, if it can be determined and is not the same as the date of issuing the invoice
• VAT base per VAT rate, unit price exclusive of VAT, and any discounts or rebates if they have not been taken into account in the unit price
• VAT rate
• VAT payable
• An indication that the sales transaction is exempt from tax or a reference to the relevant provision of the Value Added Tax Act or the VAT Directive
• If the purchaser is liable to pay the VAT, the phrase ‘reverse charge’
• If the purchaser has issued the invoice, the phrase ‘self-billing’
• In the case of a new means of transport sold to another Member State, information enabling verification of compliance with the requirements for a new means of transport in section 26d, subsections 1 and 2 of the Value Added Tax Act.
• If one of the special arrangements applicable to second-hand goods, works of art, collectors’ items and antiques is applied, the phrase ‘margin scheme – second-hand goods’, ‘margin scheme – works of art’ or ‘margin scheme – collector’s items and antiques’, respectively
• If the margin scheme for travel agents is applied, the phrase ‘margin scheme – travel agents’
• If taxable investment gold is being sold, a mention of it
• If the invoice is a correction or change to a previous invoice, reference to that invoice

The required VAT information may be written on the invoice in any language. The Finnish Tax Administration may ask for a translation during a tax audit or other control procedure.

For more information on the required information on invoices, see Sections 5.1.1–5.1.18.

5.1.1 Date of issue

The date to be recorded on the invoice may be, for example, the date when the seller delivered the invoice to the purchaser. The date of issue may also be the date when the invoice was prepared or printed, etc.

5.1.2 Unique sequential number

The requirement to include a unique sequential number on an invoice is based on the need to be able to unquestionably identify the invoice. In addition, with a system of sequential numbering, any missing invoices can be detected. Invoices issued during the same accounting period cannot have the same sequential number. VAT liable persons are free to use several series of sequential numbering. The unique sequential number does not have to consist of digits only – characters other than digits are acceptable as well.

If the purchaser instead of the seller issues the invoices, the seller should have the invoices in a series of sequential numbering. The Finnish Tax Administration recommends that purchasers engaging in self-billing use specific series of unique sequential numbering for each seller.

In exchange situations one invoice can include both the sale and purchase of goods or services. This is particularly common in the retail sales of motor vehicles, where the car dealer prepares an invoice that shows both the sales of original vehicle and a used vehicle (that the customer surrenders to the seller). Because such an exchange consists of two separate transactions, the car dealership must assign a unique sequential number to its sales invoice and to the invoice given by the seller of the used vehicle in case the latter is liable to pay VAT on this transaction. As a result, two sequential numbers must be mentioned on the invoice. The information requirements for invoices do not apply if the seller of the used vehicle is a private person, or if the used vehicle has been used for non-VAT-deductible purposes.

When preparing an invoice for exchange situations as described above, it is prohibited to merely show the ‘net’ amounts so as to offset the prices and the taxes. This means that it is not allowed to only show the difference between the selling price and the purchasing price and the difference between the VAT of the selling price and the VAT of the purchasing price.

5.1.3 Seller’s VAT identification number

In accordance with the Business Information Act (yritys- ja yhteisötietolaki, 244/2001), every operator of trade or business must have a Business ID. It is required that the operator of trade or business uses the Business ID in all documents relating to the conduct of the business. The operator of trade or business must also use a VAT identification number on the invoice when they trade with purchasers registered in other Member States (e.g. sell goods as intra-community supply or services taxable in other Member States under the general provision in section 65 of the Value Added Tax Act).

A Finnish VAT identification number is the seller’s Business ID with the letters ‘FI’ added in front and with the second-to-last character, a hyphen, removed. In addition, the seller must enter their VAT identification number on the invoice when distance selling goods pursuant to section 19a of the Value Added Tax Act or selling a new means of transport to another Member State, even if the purchaser is not liable to pay VAT (e.g. a private person).

The Finnish Tax Administration has issued instructions on distance selling and the sales of a new means of transport:

• VAT treatment of distance selling of goods (in Finnish)
• VAT instructions on new means of transport

5.1.4 Purchaser’s VAT identification number

A seller must enter the VAT identification number of the purchaser on the invoice if the purchaser is liable to VAT due to the VAT reverse charge mechanism, or if the invoice is for intra-community supply of goods.

5.1.5 Names and addresses of the seller and purchaser

It is required that the invoice shows the name of the seller or sellers. The name of the party to whom the goods or the services are being sold must be entered as the purchaser. The invoice must be addressed to the purchaser, or purchasers if there are more than one of them. For example, if two operators of trade or business purchase a machine together, the names of both of them must be included on the invoice. In such a case, both purchasers are entitled to deduct their share of the VAT. If the invoice does not indicate the proportions of how the two operators of trade or business are sharing the newly purchased machine, the assumption is that each gets half of it.

Invoices must contain the seller’s and the purchaser’s company names, or auxiliary business names as entered in the Trade Register. If the seller or purchaser is not registered in the Trade Register, the name that has been recorded in the registers of the Finnish Tax Administration must be used.

When an operator of trade or business is acting on behalf of someone else, i.e. acting as an intermediary, the invoice for the goods or services being brokered must indicate the actual seller’s name. For more information, see the Finnish Tax Administration’s guidance in Finnish on the VAT treatment of commission and intermediary trading.

If spouses engage in primary production together, they are treated as a partnership for purposes of VAT. For practical reasons, such partnerships are registered only under one spouse’s name in the VAT register, and the Business ID is issued to this spouse only. Invoices must show the name of the spouse who is VAT registered, and they may additionally show the name of the other spouse.

If the seller’s or purchaser’s official name in the Trade Register is Oy Company Ab, it is permissible to display it on the invoice as ‘Company Oy’, ‘Company Oy Ab’, ‘Oy Company’ or ‘Company Ab’. What is important is that the seller or purchaser cannot be confused with any other business.

In addition to the seller’s and purchaser’s names the name of the employee preparing the invoice may be included, for example.

If the seller has several establishments, and consequently, more than one address, the seller can choose the address to be shown on the invoice. The Finnish Tax Administration recommends that sellers use the address of their main establishment, or alternatively, the address of the establishment from which the goods or services are supplied. A coded address can substitute the actual address text if both the seller and the purchaser, and the Finnish Tax Administration as necessary, know how to decode the coded addresses in order to identify the parties of the transaction.

The purchaser’s address must be mentioned on the invoice in full. Instead of a street address, it is permissible to use a PO Box or an address containing the purchaser’s specific postal code. The invoice can be sent to an address that differs from the purchaser’s address on the invoice: for example, to an accounting firm, to a scanning service company or to a subsidiary of a group of companies. In this case, the invoice must show two addresses: the purchaser’s actual address and the delivery address. It is permissible to show the purchaser’s actual address elsewhere on the invoice, not necessarily in the usual address field.

5.1.6 Quantity and nature of the goods supplied, or the extent and nature of the services supplied

Goods must be identified on the invoice by their commercial descriptions or by their names. Services must be identified by mentioning the type of the service. Alternatively, the invoices can show descriptions of the goods and services in a coded format if the supplier, purchaser and the Finnish Tax Administration, as necessary, have a decoding key at their disposal. If such a decoding key is separately provided, it must be stored in the same way as the actual invoice itself. The description may alternatively be made by a reference to an agreement, an order or a product catalogue sent to the purchaser.

Information about the extent of the services is only necessary in cases where the invoice does not otherwise give details on the content of the services being invoiced. For example, an invoice for the rental of goods indicates the extent of the service by showing details on the lease period – in other words, the point in time when the services were supplied.

Council Implementing Regulation (EU) No 1042/2013 of 7 October 2013 amending a previous EU regulation sets out some specific requirements for information to be shown on invoices for electronically supplied services in cases where the services are supplied through a telecommunications network, an interface or a portal (such as a marketplace for applications). Under Article 9a, the invoice issued or made available by each taxable person taking part in the supply of the electronically supplied services must identify such services and the supplier thereof. In addition, the invoice or receipt issued or made available to the customer must identify the electronically supplied services and the supplier thereof. This concerns situations where the taxable person has explicitly indicated the actual provider of the electronically supplied services as the supplier of these services, and where the taxable person is not acting in his own name on behalf of the actual provider. For more information, see instructions of the Finnish Tax Administration on Tele-, lähetys- ja sähköisten palvelujen arvonlisäverotus (VAT treatment of telecommunications, broadcasting and electronic services; in Finnish).

5.1.7 Supply date of goods/services or prepayment date

In order to ensure that the VAT can be recorded for the correct tax period, the invoices must contain the supply date of goods or services, or the date when a prepayment was made. Invoices for services should at least indicate the month when the services were supplied if no exact supply date can be determined. If supplies of goods are made under FOB or CIF conditions, the date when the ship sails can be treated as the date of supply.

When the supply date of goods or services is the same as the date of the invoice, the supply date does not have to be separately mentioned on the invoice. If possible, the recommended format is: ‘invoice date/supply date’.

In the same way, if possible, in the case of prepayments, the invoice should show the actual date of payment. However, the final invoice for the transaction does not have to show the dates when the seller had received the prepayments. The final invoice must show the supply date of goods or services.

Some supplies of goods or services are made on a continuous basis. In this case, the compensation is related to the period of time – an example of this is rental service. However, a one-off sales transaction where the customer pays in several instalments is not continuous supply. In the same way, if the compensation is not based on time but quantity, it is not continuous supply. This means that a contract to construct a building, for example, is not considered a continuous supply of goods or services.

In the continuous supply of goods or services, the supply is regarded to take place on the end date of each period of calculation relating to the supply. The supply date on the invoice must be this date. For the sake of clarity, the invoice can also show the length of the invoicing period.

If there is no exact supply date for a continuous supply of goods or services, the time period during which the sales transaction is carried out must be indicated on the invoice.

In the case of intra-community supply, if goods are delivered on a continuous basis over a period longer than a calendar month, the goods are regarded as being supplied at the end of each calendar month.

5.1.8 VAT base, unit price, and discounts and rebates

‘VAT base’ refers to the price received from the sales transaction without VAT. The seller must mention the VAT bases separately per VAT rate or exemption on the invoice. In addition, the invoice must show the unit price, without VAT, of the goods/services. For example, in a piecework contract, the contract price is the unit price. When selling electricity, the unit price is the price of electric power per kilowatt-hour. Unit prices may occasionally be defined as ‘per 100 pieces’ – in such a case, the batch of 100 pieces forms the unit price. Similarly, a package of products may occasionally be defined as a unit, and in this case, the price of such a package is treated as the unit price. If the VAT rates vary among the goods/services included in a package treated as one unit, the invoice should break down the applicable VAT rates, displaying the VAT base per each VAT rate, and the amount of VAT either as a sum total or as a breakdown per each VAT rate applied. If one invoice covers both taxable and VAT-exempt sales, the invoice must keep these categories separated.

If applicable rebates or discounts are not included in the unit price itself, the invoice must specify them, either as percentages or as amounts. Possible ways to specify them are per every good/service or as a sum total from the invoice total at the end of the invoice, and by presenting them per different VAT rates that are involved. The requirement to include rebates or discounts on the invoice does not mean that their exact details should be included line-for-line. Instead, the rebates and discounts can be shown anywhere on the invoice. The requirement only concerns actual rebates and discounts given to the purchaser at the point of time when the invoice is issued. If the seller gives them afterwards, the seller must issue a new invoice.

The seller must issue a separate invoice when the purchaser becomes entitled to the rebate, discount, etc. that was agreed subject to certain conditions when the original invoice was issued. However, the seller need not issue any separate corrective invoice for the usual commercial cash discounts, such as 2% for 14 days, and 0% for 30 days. The amount of the usual commercial discounts is generally modest and so is its impact on the VAT relating to the transaction. In this case, the invoice must indicate the total taxable amount on both due dates or at least the pre-calculated taxable value of the cash discount. An invoice that includes a cash discount can be recorded in the accounting system so that the tax base and VAT payable are recorded as total sums without subtracting the discounts, adding separate entries specifying both the discount and its VAT effects once the discount has been used. This means that the seller must ensure that the invoice and the payment can easily be traced back to one another to ensure that the seller will record and pay the right amount of VAT. The purchaser can make their accounting records in the same way as the seller. In the same way, the purchaser must ensure that the purchase invoice and the money paid out to settle it can easily be traced back to one another so the right amount of VAT will be deducted.

If a corrective invoice is issued to the purchaser in order to indicate an annual discount, the period concerned by the discount must be specified. There is no need to refer to the invoices themselves. Indicating the time period also suffices if the rebate only relates to a specific product group.

A reference to the original invoice with which the operator of trade or business supplied returnable packages and transport appliances might be impossible in practice. For this reason, the requirement is to include a reference to the original invoice if possible.

If the purchaser is liable to VAT on the sales transaction (reverse charge), the invoice must show the VAT base separately for each type of goods or services sold instead of the information required by section 209e, subsections 1.8, 1.9 and 1.10 of the Value Added Tax Act. In this case, the following is not to be included on the invoice:

• The VAT base per VAT rate or exemption, unit price exclusive of VAT and discounts or rebates (subsection 1.8)
• The VAT rate applied (subsection 1.9)
• The VAT payable (subsection 1.10)

5.1.9 VAT rate

If the seller is liable to pay VAT on the sales transaction, the invoice must show the VAT rate applied to the sales of goods or services. If one invoice covers several goods/services with different VAT rates, the invoice must show each applied VAT rate. If the VAT reverse charge mechanism applies, the purchaser is liable to pay the VAT and the invoice must not show the VAT rate.

5.1.10 VAT payable

‘VAT payable’ refers to the VAT that the seller must pay for the sales transaction, or part thereof, being billed with the present invoice under the Value Added Tax Act. The invoice must show the sum total of VAT to be paid by the seller. The VAT does not have to be mentioned per different VAT rates, as this information can be inferred from the other details as necessary. However, including a transparent breakdown of the VAT per every rate is recommended.

It is important not to include any amounts of VAT that have already been shown on a previous invoice, unless the invoice is a corrective invoice, or a replacement of an earlier invoice. Sellers of second-hand goods, works of art, antiquities and collectibles under the VAT margin scheme are not to mention the amounts of VAT on their invoices either. If the purchaser is liable to pay VAT on the sales transaction, the invoice must not show the VAT payable. Instead, it must include the phrase ‘reverse charge’.

The VAT payable must be expressed with two decimals. Usual arithmetical rules apply for the rounding of uneven values: the last decimal digit to keep is increased by one if the next digit is 5 or more. Rounding should only concern the final amount of the invoice.

The VAT payable must be expressed in the local currency of the EU Member State where the sales is carried out. Amounts in foreign currencies are converted into euros by applying the most recent conversion rate published by a commercial bank or by the European Central Bank at the time when the liability to pay VAT arose (sections 15 or 16 and section 80a of the Value Added Tax Act). However, the time of the invoice or the time when the payment was accrued is the decisive time regarding the exchange rate to be used if the VAT is assigned to the month of invoicing or to the month of payment. If domestic sales in Finland are made in a currency other than the euro, the seller must enter the VAT payable in euros on the invoice.

The invoice must not include the VAT payable or the VAT rate if the seller is not registered in the VAT register. However, if the authorities are currently processing the seller’s application for VAT registration, the seller is entitled to indicate the VAT payable and the VAT rate on the invoice, provided that the seller notes that the VAT registration is currently pending. In this case, the phrase on the invoice must be ‘VAT registration pending’. To have the right to VAT deduction on such an invoice, the purchaser must check that the seller has been successfully registered. This can be done at ytj.fi, for example.

If the seller fails to obtain the VAT registration, the seller must issue the purchaser with a corrective invoice to replace the invoice issued. Even if the seller lodges an appeal against the VAT registration decision, the seller must still issue the corrective invoice.

5.1.11 Note on VAT exemption

Stating the reason for an exemption on an invoice is not required. Indicating that a VAT exemption applies to the sales transaction suffices. The invoice may show a simple mention, such as "VAT-exempt supply / Veroton myynti / Momsfri försäljning". Alternatively, a reference to the specific provision of the Value Added Tax Act or the VAT Directive may be used.

The Finnish Tax Administration’s recommendations on entering this information on an invoice is covered in Section 5.1.19.

5.1.12 Note on VAT reverse charge

‘VAT reverse charge’ means that the purchaser, instead of the seller, is the party liable to pay VAT on the sales transaction. Reverse charge applies to:

• situations of triangulation under section 72g of the Value Added Tax Act, as laid down in the section 2a of the Value Added Tax Act, and concerning the second purchaser in the triangulation;
• the supply of goods and services in Finland by a foreigner pursuant to the section 9 of the Value Added Tax Act;
• the supply of investment gold, gold materials or semi-manufactured gold products of a purity of 325 thousandths or greater to purchasers referred to in section 8a of the Value Added Tax Act;
• the supply of emission allowances to purchasers referred to in section 8b of the Value Added Tax Act;
• supply to purchasers of construction services or to purchasers of workforce leasing for executing construction services referred to in section 8c of the Value Added Tax Act;
• the supply of scrap metal and metal waste to purchasers referred to in section 8d of the Value Added Tax Act;
• the supply of services in accordance with the general rule laid down in section 65 of the Value Added Tax Act between operators of trade or business established in two different EU Member States;
• situations of triangulation where a provision in another EU Member State corresponding to section 2a of the Value Added Tax Act applies to the second purchaser’s purchases;
• supply carried out by a Finnish operator of trade or business on which a provision of another EU Member State corresponding to section 9 of the Finnish Value Added Tax Act applies.

The VAT reverse charge mechanism is applied to sales in Finland by a foreigner where the foreign seller does not have a fixed establishment in Finland and has not applied for Finnish VAT registration. If the foreigner has a fixed establishment in Finland, but this establishment does not intervene in the supply of goods or services in question, the VAT reverse charge mechanism applies.

The VAT reverse charge mechanism does not apply to sales transactions by a foreigner if the purchaser is a private person or a foreigner who does not have a fixed establishment in Finland and who is not included in the Finnish VAT register. Supply of construction services between two foreigners constitutes an exception to this, and the VAT reverse charge may be applicable (under section 8c of the Value Added Tax Act). Moreover, the VAT reverse charge mechanism does not apply to sales by a foreigner if it is a question of distance selling pursuant to section 19a of the Value Added Tax Act, passenger transport services or admission to educational, scientific, cultural, entertainment or similar events and to services directly relating to such admission pursuant to section 69d of the Value Added Tax Act.

In reverse charge situations, the invoice must include the phrase ‘reverse charge’. The Finnish Tax Administration’s recommended ways of presenting information on an invoice are covered separately in Section 5.1.19.

The purchaser is entitled to add information to the invoice from the seller if an invoice received from a seller outside the EU is missing the purchaser’s VAT identification number or the phrase ‘reverse charge’. When a received invoice has been supplemented in this manner, it must be clearly stated what has been added and what was displayed on the invoice originally. When the VAT reverse charge is applied, the VAT rate or VAT payable are not to be shown on the invoice. The purchaser is not entitled to add this information on the invoice.

Read more about the VAT reverse charge in the construction industry and in the supply of scrap metal and metal waste in guidance of the Finnish Tax Administration:

• Rakennusalan käännetty arvonlisäverovelvollisuus (VAT reverse charge in the construction industry; in Finnish)
• Metalliromun ja -jätteen myynnin käännetty arvonlisäverovelvollisuus (VAT reverse charge in the sales of metal scrap and waste; in Finnish).

5.1.13 Note on self-billing if the purchaser issues the invoice

If the purchaser issues the invoice, the "self-billing" mention must be set out either in English or other languages.

5.1.14 Information on sales of new means of transport

In the case of a new means of transport sold to another Member State, the invoice must include information enabling verification of compliance with the requirements for a new means of transport in section 26d, subsections 1 and 2 of the Value Added Tax Act. Here, ‘means of transport’ refers to any motorised land vehicle intended for passenger or goods transport, with engine displacement exceeding 48 cc, or power exceeding 7.2 kilowatts, vessels exceeding 7.5 meters in length, and aircraft with maximum permissible take-off weight exceeding 1,550 kilograms.

For more information on the definition of new means of transport and on the supply of new means of transport to another EU Member State and on the acquisition of such from another EU Member State, see guidance of the Finnish Tax Administration:

• VAT instructions on new means of transport
• Yksityishenkilö ostaa uuden kuljetusvälineen toisesta EU-maasta (A private person purchases a new means of transport from another EU Member State; in Finnish)

The sales invoice of a motorised land vehicle must have the following information on it: date of supply, date of putting the means of transport into service, displacement or power rating of the engine, and accumulated kilometres. If a vessel is being sold, the required information is: date of supply, date of putting the means of transport into service, and accumulated hours of sailing. Correspondingly, for aircraft: date of supply, date of putting the means of transport into service, and accumulated hours of flying.

5.1.15 Supplies within the VAT margin scheme

When the seller applies the procedure for second-hand goods, works of art, collectors’ items and antiques referred to in section 79a of the Value Added Tax Act, the purchaser is under no circumstances entitled to deduct the VAT that the seller pays for his sales margin. The taxable dealer may not enter separately on the invoices which he issues the VAT relating to supplies of goods to which he applies the margin scheme. The Finnish Tax Administration recommends that the seller enters a note on the invoice that the selling price includes no deductible VAT.

The phrase ‘margin scheme – second-hand goods’, ‘margin scheme – works of art’ or ‘margin scheme – collector’s items and antiques’ must be included as appropriate.

For more information, see guidance of the Finnish Tax Administration (in Finnish) on second-hand goods and the margin scheme for works of art, collector’s items and antiques.

5.1.16 Supplies within the margin scheme for travel agents

When the seller must apply the margin scheme for travel agents referred to in section 80 of the Value Added Tax Act, the seller must add the mention ‘margin scheme – travel agents’ on the invoice.

For more information, see the Finnish Tax Administration’s guidance in Finnish on the VAT of tourist industry.

5.1.17 Supplies of investment gold

For more information, see the Finnish Tax Administration’s guidance in Finnish on the VAT treatment of investment gold, gold material and semi-manufactured gold products. Chapter 7 of the published guidance includes examples of invoice entries in different situations.

5.1.18 Required VAT information on changed or corrected invoices

If you introduce changes to an invoice by issuing a new one, the new invoice must include a reference to the invoice you had issued originally. The above rule applies to all circumstances where an invoice is changed. It is important that the reference to the previously issued invoice is unambiguous. The unique invoice number may be used as the reference. If the change has to do with the sales made during a certain period of time, you can add a reference to the period. This must be done when granting an annual discount to a customer, for example.

If the invoice has to do with distance selling, intra-community supply or cross-border sales for which the purchaser is liable to pay VAT, and the original invoice is changed so that a new invoice is issued, the new invoice must contain all required information. In this case, a reference to an earlier invoice alone does not suffice.

5.1.19 Finnish Tax Administration’s recommendations for VAT information on invoices

The Finnish Tax Administration recommends the following:

• When the place of supply is another EU Member State, and a supply not subject to VAT is taking place, to an operator of trade or business or a legal person, the phrase ‘reverse charge’ or a reference to the relevant article of the VAT Directive must be included on the invoice. The obligation to issue an invoice concerns supply that would be VAT-exempt if it took place in Finland. These types of supply are listed in section 209b, subsection 1.3, of the Value Added Tax Act.
• The note for invoices for export selling is ‘VAT 0%, export of goods’, or ‘section 70 of the Value Added Tax Act’, or ‘Art. 146, VAT Directive 2006/112/EC’.
• The note for invoices for intra-Community supply is ‘VAT 0%, intra-community supply’, or ‘section 72a of the Value Added Tax Act’ or ‘Art. 138, VAT Directive 2006/112/EC’.
• In the case of triangulation within the internal market, the first seller must enter, as usual, the purchaser’s VAT identification number and a mention on intra-community supply on the invoice in addition to its own VAT identification number.

After that, the first purchaser – i.e. the second seller – must not only enter its own VAT identification number and the VAT identification number of the second purchaser on the invoice, but also refer to the triangulation scheme: ‘triangulation’. In triangulation, the mention to set out on the invoice is ‘VAT 0%’ or ‘section 63g of the Value Added Tax Act’ or ‘Art. 141, VAT Directive 2006/112/EC’. In addition, the second seller must indicate that the VAT reverse charge is applied with the phrase ‘reverse charge’, for example.

• When goods are transported outside of the EU and the transporter issues an invoice for the services, the fact that the supply (of the transport) is exempt from VAT can be stated using the note ‘VAT 0%, transport of goods outside the European Union’ or ‘VAT 0%’, or ‘Art. 146, VAT Directive 2006/112/EC’.
• When goods are imported and the seller of transport services should indicate that the supply of that service is exempt from VAT in a situation where the cost of the transport must, under section 91 of the Value Added Tax Act, be included in the tax base of the imported goods, the note for the invoice is ‘section 71, subsection 1.2 of the Value Added Tax Act, transport services for imported goods’.
• When a Finnish operator of trade or business supplies services for which the place of supply is other than Finland and for which the purchaser is liable to pay VAT, the Finnish seller must enter the phrase ‘reverse charge’ on the invoice. This applies when the purchaser is established in the EU and also when the purchaser is established outside the EU. For example, in cases where services are supplied to an operator of trade or business established in another EU Member State according to the general rule (section 65 of the Value Added Tax Act), the phrase ‘Reverse charge, Art. 44, VAT Directive" must be shown on the invoice.
• If the invoice concerns a transfer of a business enterprise or part thereof, the invoice must include the note ‘Transfer referred to in section 19c of the Value Added Tax Act’.
• When a service provider supplies VAT-exempt goods or services, relating to healthcare, medical care or social welfare to a municipality or wellbeing services county, the invoice must include the note ‘Supply referred to in section 34 of the Value Added Tax Act’ in the case of healthcare or medical care, and respectively, ‘Supply referred to in section 37 of the Value Added Tax Act’ in the case of social welfare.
• When goods or services used for a purpose which only partially entitles to deduction are sold, VAT must be paid only for the part that entitles to deduction. In such a case, the invoice must show the amount of VAT payable. Additionally, the invoice must include the note ‘Supply of goods/services used partially for non-deductible purposes pursuant to section 61 of the Value Added Tax Act’.
• In trade between sellers and purchasers in the Åland Islands and mainland Finland, when the seller is acting as the agent for its customer, the invoice must separately show the VAT on import the seller paid on behalf of the purchaser. Additionally, the invoice must show a phrase indicating that the supply is VAT-exempt, e.g. ‘VAT 0%’ or ‘VAT-exempt sales’.

5.2 Simplified information requirements for invoices

Section 209f of the Value Added Tax Act contains provisions on simplified information requirements for invoices. The simplified information requirements cannot be applied to the intra-community supply of goods (section 72b of the Value Added Tax Act), to distance selling of goods (section 19a of the Value Added Tax Act) or to the supply of goods or services carried out in another EU Member State to which the VAT reverse charge mechanism is applied and the purchaser pays the VAT (provision corresponding to section 2a or section 9 of the Value Added Tax Act).

Otherwise, simplified VAT information on invoices suffices when the invoice total is no more than €400.

In addition, the simplified rules apply when the invoice concerns retail sales or similar situations where almost all transactions are with private persons. In these cases, the simplified VAT information suffices even if the sum total (including VAT) exceeds €400. Examples of sales similar to retail trade include kiosks, shoemakers, hairdresser’s and funeral homes.

Simplified VAT information suffices for invoices relating to restaurant and catering services and passenger transport services with the exception of services that are bought by a purchaser that intends to re-sell them to another customer. Moreover, simplified information suffices on receipts printed out by parking meters and comparable devices.

The following information is required for invoices/receipts under the simplified rules:

• Date of issue
• Seller’s name and VAT identification number (Business ID)
• Quantity and nature of goods supplied, or the nature of services supplied
• VAT payable per VAT rate, or VAT base per VAT rate
• If the invoice is a correction or change to a previous invoice, a reference to the original invoice and information on what has been changed

Simplified VAT rules allow to only show the prices including VAT on invoices/receipts if VAT payable is indicated. In this case, there is no need to show the VAT base.

However, it is permissible to include more information on invoices and receipts than what the Value Added Tax Act requires.

For example, a hotel may issue an invoice – if the value is €400 or less – without the purchaser’s (the hotel guest’s employer’s) name. The hotel is allowed to include the hotel guest’s (the employee’s) name on the invoice although the regulations do not require this.

5.3 Other documentation

5.3.1 Memo vouchers and other documentation

Requirements on VAT information are laid down in the Value Added Tax Act not only for invoices but also for the other documentation if the other documentation has an impact on value added taxation (Chapter 22 of the Value Added Tax Act). For more information on such documentation, see Sections 5.3.2–5.3.7 below.

5.3.2 Details on construction services

When a VAT liable person purchases immovable property or construction services for the purpose of his taxable business, the VAT liable person may deduct the VAT that the seller must pay for the construction services performed in respect of the immovable property (section 103 of the Value Added Tax Act). This deduction requires that the seller gives the purchaser a document that includes details on the VAT payable.

This document must contain at least the following:

• Date of issue of the document containing the information
• Names, addresses and Business IDs of the seller and purchaser
• Nature of the supply
• VAT payable by the seller

5.3.3 Details on energy resources

A purchaser may make a deduction for purchased energy resources when the charge is included in the VAT-exempt rent or VAT-exempt maintenance charge for the immovable property (section 111 of the Value Added Tax Act). Similarly, a deduction can be made if the landlord has charged the energy resources separate from the rent or maintenance charge. However, only the amount corresponding to the VAT payable on the energy resources or fuels purchased by the owner, i.e. the holder of the immovable property, may be deducted. This deduction requires that the seller provides the purchaser with a document on the VAT payable for the energy recourses or fuels that the seller has bought.

This document must contain at least the following:

• Date of issue of the document containing the information
• Names, addresses and Business IDs of the seller and purchaser
• Nature of the supply and the calendar month when the supply took place
• Total amount of rent or maintenance charge and the part thereof that is attributable to energy costs
• Total amount of VAT payable on the energy/fuel that the seller had bought
• Mention of the VAT exemption on the sale and the reason for it.

5.3.4 Requirements on documentation and reporting when immovable property is supplied

When the right or obligation to adjust the investment on immovable property is transferred to transferee, both the transferor and the transferee are obligated to submit documentation. The required content is specified in more detail in sections 209k–m of the Value Added Tax Act and in the Finnish Tax Administration’s guidance Kiinteistöinvestointien arvonlisäverotus (Value added taxation of property investments, in Finnish).

5.3.5 Requirements on documentation and reporting in case of transfer of a business enterprise or part thereof

VAT does not have to be paid on the sales or other supply of goods and services when the sales or supply takes place in connection with the transfer of an entire business enterprise or a part thereof, to a transferee who will continue the business operations and begin to use the goods and services for a purpose which entitles to deduction (section 19c of the Value Added Tax Act). The transferee must give the transferor a document establishing that the sold or supplied goods and services will be used for VAT deductible purposes.

In the case of second-hand goods and works of art, collectible items and antiquities, the transferor must give the transferee a document establishing that the requirements of the margin scheme laid down in sections 79f and 79g of the Value Added Tax Act have been met.

The transferor must also give the transferee a document on supplied immovable property (see Section 5.3.4 above).

The provisions of the Value Added Tax Act on invoices apply to the transfer of a business enterprise or part thereof as referred to in section 19c of the Value Added Tax Act. This means that the documentation on the transfer of a business enterprise or part thereof must contain the information set out in section 209e of the Value Added Tax Act. For more information on the provisions in section 209e of the Value Added Tax Act, see Section 5.1 above.

5.3.6 Memo vouchers on deductions for initial stock and change of purpose of use

When taxable business is started, the VAT liable person may – apart from some exceptions (e.g. immovable property) – deduct VAT in respect of goods or services in his possession which the VAT liable person have acquired or manufactured subject to tax and which are used for purposes which entitle to deduction (deduction for initial stock, section 112, subsection 2 of the Value Added Tax Act). In addition, the VAT liable person may make a deduction for goods or services which the VAT liable person move from non-deductible use to deductible use (change of the purpose of use, section 112, subsection 1 of the Value Added Tax Act).

The VAT that can be deducted by the VAT liable person is the VAT that was included in the purchase price of the goods/services, or the VAT paid when the goods were imported, bought as an intra-community acquisition, or manufactured. The maximum amount deductible must reflect the value of the goods/services at the time when the VAT liable person performs the deduction.

The VAT liable person must have the original invoice for the goods/services purchased. The VAT liable person must also have a memo voucher prepared at the time when the goods/services were taken for a deductible purpose.

The memo voucher must contain at least the following:

• Date on which the memo voucher was prepared
• Name of the VAT liable person
• Quantity and nature of the goods supplied, or the extent and nature of the services supplied
• Date on which the goods/services were taken to deductible use, unless the date is the same as the preparation date of the voucher
• VAT included in the purchase price or VAT paid on own use of the goods/services
• Reference to the purchase invoice or to the document establishing the VAT paid on own use
• Probable selling price of the goods/services without VAT
• VAT rate
• Deductible VAT

The VAT liable person must prepare a memo voucher for self-manufactured goods and services including purchase invoices for any goods or services they had to buy to manufacture the goods or services.

If the VAT liable person is a limited liability company, no VAT deduction for initial stock is allowed if the original purchase was made by a private person (e.g. a shareholder of the company). Such a purchase is not considered a purchase made by the limited liability company. It is not possible for a private person to issue an invoice with VAT included to the limited liability company, either. If goods or services are sold/donated by a private person to a limited liability company, it is not a purchase for the limited liability company that could contain any deductible VAT.

5.3.7 List of goods transported to another EU Member State for a specific purpose and lists of call-off stock arrangements to be kept

In accordance with section 209s subsection 1 of the Value Added Tax Act, an operator of trade or business must keep a list of goods when the operator or someone else on his behalf transports the goods to another EU Member State:

• for the purpose of performing work or valuation of the goods, performed in the country of destination upon goods sold to the VAT liable person, and the goods are returned to Finland after being worked upon;
• temporarily for the supply of services by the VAT liable person in another EU Member State;
• temporarily for purposes that would entitle to temporary importation procedure with total relief from customs duties if it were question of import from outside the EU.

The list is free-form.

In addition, section 209e, subsection 3 of the Value Added Tax Act requires that it is possible to identify from the accounting of the operator of trade or business movable property sent to them from another Member State for the purpose of being worked upon or valued.

With regard to call-off stock arrangements, section 209s of the Income Tax Act requires the following:

• An operator of trade or business that transfers goods under call-off stock arrangements as referred to in section 18c of the Value Added Tax Act must keep a list enabling proper monitoring of compliance with the provision (section 209s, subsection 2 of the Value Added Tax Act)
• An operator of trade or business to which goods are sold under the call-off stock arrangements referred to in section 26h must keep a list of those goods (section 209s, subsection 4 of the Value Added Tax Act)

The information requirements for the abovementioned lists of call-off stock arrangements are laid down in Article 54a of Council Implementing Regulation (EU) No 282/2011 laying down implementing measures for Directive 2006/112/EC on the common system of value added tax.

5.3.8 Recommendations

The seller’s obligation to issue an invoice is regulated exhaustively by section 209b of the Value Added Tax Act. However, sellers must, in any case, prepare a voucher of a transaction for the purposes of accounting or recordkeeping (Chapter 2, section 5 of the Accounting Act [kirjanpitolaki, 1336/1997] and section 2 of a decision by the Finnish Tax Administration on record-keeping [Verohallinnon päätös muistiinpanovelvollisuudesta]). In addition, sellers may be under obligation to issue an invoice due to legislation in force in another country. The obligation to issue an invoice for transfer of a business enterprise or part thereof pursuant to section 19c of the Value Added Tax Act is based on section 209j of the Value Added Tax Act.

The Finnish Tax Administration recommends that the following information is shown on invoices and vouchers in cases where the Finnish Value Added Tax Act does not require the seller to issue an invoice:

• If the seller sells goods and services that are VAT-exempt within the meaning of Chapter 4 of the Value Added Tax Act, for which no requirement to issue an invoice concerns the seller, the invoice should show what the good/service sold is and on which provision of the Value Added Tax Act the VAT exemption is based. For example, ‘Supply of immovable property, tax exempt, section 27 of the Value Added Tax Act’ or ‘VAT-exempt financial services, section 41 of the Value Added Tax Act’.
• VAT is not payable on the sale of goods or services which are used for purposes of other than those which entitle to deduction. When goods or services that have been in non-deductible use are being sold, the invoice should show a mention of it, e.g. ‘Goods previously used for non-VAT-deductible purposes’.

The Finnish Tax Administration recommends the following about the documentation:

• When paid expenses relate to construction work by a consortium for fulfilling an assignment but some of the expenses are included in the bookkeeping of one of the shareholders in the consortium, the shareholder must issue a document regarding these expenses to the consortium. Examples of such expenses include YEL pension insurance premiums, insurance premiums for cars, and depreciations of machinery and equipment. This way the VAT base of own use of construction services will be determined correctly for the consortium. Read more about value-added taxation of consortia in the construction industry guidance of the Finnish Tax Administration: Rakentamispalvelun myynti ja oma käyttö arvonlisäverotuksessa (Selling of construction services and own use of those services, in Finnish).

6 Obligation to control invoices

In accordance with the Accounting Act, vouchers, ledgers and other accounting material must be processed and retained so that their contents can be reviewed without difficulty and printed in a clear written format where necessary.

The authenticity of the origin, the integrity of the content and the legibility of an invoice, whether on paper or in electronic form, must be ensured from the point in time of issue until the end of the period for storage of the invoice. Operators of trade or business can freely select between any control process that creates a reliable audit trail between an invoice and the supply of goods or services.

‘Authenticity of the origin’ means the verification of the identity of the supplier or issuer of the invoice. Both the seller and the purchaser can independently verify the authenticity of the origin. The seller must ensure that the information on the invoice is true regarding the supply of the goods or services, and the identity of the seller. The seller must also verify the identity of the party who issues the invoice if the issuer is the purchaser or a third party. If the purchaser is an operator of trade or business, the purchaser must also be able to verify that the information on the seller’s identity on the invoice is correct. In addition, the purchaser must ensure that the seller has supplied the goods or services described on the invoice. A typical way to do so is to compare the invoice details with other documents for the same business transaction. The VAT liable person must retain the documents used for the verification for the entire storage time of the invoices.

‘Integrity of the content’ means that the content of the invoice has not been altered. Both the seller and the purchaser can independently choose a method they use for verifying the integrity of the content, or they can mutually agree on a technology to be used for purpose of integrity checks. These methods must be kept available for the entire storage period of the invoices. However, it is permissible to change the format of the invoice. Examples of format changes include the changing of the type of date display, or the changing of the file format to .xml.

‘Legibility’ of an invoice means that the invoice must be readable by a human.

7 Retention of invoices

A VAT liable seller performing VAT-taxable or VAT-refundable activities must keep copies of sales invoices relating to sales of goods or services in the conduct of business in Finland. A seller liable to pay VAT must also retain received purchase invoices that relate to their VAT-taxable or VAT-refundable business. Regardless of who prepared the invoices, it is the VAT liable person that has the responsibility to store them.

An operator of trade or business liable to pay VAT in Finland and included in the Finnish VAT register must additionally retain invoices for purchases made in Finland relating to operations conducted in another country (section 131, subsection 1.4 of the Value Added Tax Act). The operator of trade or business must also keep the purchase invoices that relate to purchases for which it is VAT liable in Finland under the VAT reverse charge mechanism.

Invoices must be retained at least for a period of six years starting from the beginning of the calendar year after the year covering the month to which the taxable event that the invoices concern belongs under the rules of periodization. If the accounting period of the VAT liable person is not a calendar year and the tax period is a calendar month, the retention time for invoices is also at least six years. In such a case, the six-year period starts at the beginning of the year after the accounting period covering the calendar month to which the taxable event that the invoices concern belongs under the rules of periodization. If the tax period of the VAT liable person is a reindeer husbandry year, the six-year period starts at the beginning of the year after the reindeer husbandry year covering the calendar month to which the taxable event that the invoices concern belongs under the rules of periodization.

In accordance with section 209o of the Value Added Tax Act, invoices must be retained with care so that they can be examined by the Finnish Tax Authority without undue delay. According to government proposal HE 226/2022, the delay is assessed on a case-by-case basis. The assessment may take into account different kinds of circumstances such as the fact that materials from the current financial year can often be accessed in or nearly real time, whereas access to materials archived as paper documents may take a few days. In addition, complete real-time computer access is required for invoices stored in electronic format abroad.

In addition to invoices, all documents that contain information affecting the amounts of payable and deductible VAT must be retained in the same manner pursuant to section 209p of the Value Added Tax Act. Invoices issued to private persons must be retained, for example. Also in the same way as invoices, documents and information that enable the operator of trade or business to meet its obligation to verify the authenticity of the origin and the integrity of the content of the invoice must be retained. Furthermore, a VAT liable person who is not obligated to maintain accounts under the Accounting Act must store their records in a similar way.

For purposes of auditing, if requested, the VAT liable person must prepare a copy of the machine-readable record that contains invoices and make it available to a person who represents the Finnish Tax Authority if this is necessary for performing an audit. Sellers of investment gold must, on request from the Finnish Tax Administration, present the materials for the identification of their customers and give further details on them. The representative of a party who has become liable to pay VAT upon application is also obliged to keep accounts/records, to retain invoices and to present the invoices to the authorities for purposes of auditing.

However, in the case of an investment on immovable property, the related invoices and documents have a storage period of 13 years from the end of the calendar year during which the adjustment period on immovable property began. The same requirement on the length of the storage period concerns the documentation that the transferor must give to the transferee on the investment on immovable property, and the documentation that the transferee must give to the transferor.

After the legally defined period of six years has elapsed, the invoices and other vouchers may be replaced by a specific document (section 209q of the Value Added Tax Act). For more information on the regulations governing the information content of such a document, see Verohallinnon päätös arvonlisäverolain 209 q §:ssä tarkoitetusta selvityksestä (Decision of the Finnish Tax Administration regarding the document referred to in section 209q of the Value Added Tax Act, record number VH/2952/00.01.00/2018).

In the case of diplomatic purchases within the meaning of section 128 of the Value Added Tax Act, purchases made by the European Union and other international organisations within the meaning of sections 129 and 129a–b if the Value Added Tax Act, and purchases made by the armed forces of other Member States of the EU and the armed forces of other Member States party to the North Atlantic Treaty within the meaning of section 129c of the Value Added Tax Act, the retention period for the invoice on which the refund application is based is three years from the beginning of the year following the payment date of the invoice.

In the case of an application for a refund by an international charitable and relief organisation (section 125 of the Value Added Tax Act), the documents proving the amount of tax included in the purchase of goods and the export of these goods must be retained for three years from the beginning of the year following the export of the goods.

Sellers of investment gold (sections 43a and 43c of the Value Added Tax Act) are subject to a customer identification obligation (section 209t of the Value Added Tax Act). Customer identification documents must be retained for six years from the end of the calendar year in which the financial year in which the transaction or the last of a series of linked transactions took place ended.

An administrator of an electronic interface has an accounting obligation (section 209u of the Value Added Tax Act). An operator of trade or business that, using a marketplace, platform, portal or a similar electronic interface, enables another operator of trade or business to sell goods or services to parties other than operator of trade or business within the Community must keep sufficiently detailed records of those sales transactions so that the Member States where the sales transactions take place can verify that the VAT has been correctly paid. Information on sales made in Finland must be made available in electronic format to the Finnish Tax Administration on request. The information must be retained for ten years from the end of the calendar year during which the transaction took place.

8 Invoice as a precondition for the right to deduct

8.1 Purchaser holds the original invoice

A party liable to pay VAT has the right to deduct the VAT payable on goods or services bought from another party liable to pay VAT for the purposes of the purchaser’s VAT-taxable business. ‘VAT-taxable business’ refers to an activity which by virtue of the Value Added Tax Act results in the liability to pay VAT for the seller of the goods or services (section 102 of the Value Added Tax Act). If the purchaser has made the purchase for use that only partially entitles to deduction, the VAT can only be deducted for the part that the goods or services are actually used for this VAT-deductible purpose (section 117 of the Value Added Tax Act).

A precondition for the right to deduct is that the VAT liable purchaser holds an invoice (or other document acting as an invoice) for the goods or services purchased, which was issued by the seller and meets the requirements of the Value Added Tax Act on the information content on an invoice. The precondition also applies to advance invoices. An invoice entitles to a VAT deduction only if the information on the invoice corresponds to the actual circumstances.

If the purchase is one where the purchaser is liable to pay VAT due to the VAT reverse charge mechanism, an additional requirement is applied to the purchaser’s right to deduct VAT – the purchaser must have fulfilled the reporting requirement defined in section 16 of the Act on the Assessment Procedure for Self-assessed Taxes (laki oma-aloitteisten verojen verotusmenettelystä, 768/2016), or the Finnish Tax Administration must have imposed the VAT amount on the purchaser for payment. The same requirements apply to deducting VAT payable on intra-community acquisitions.

A precondition for the purchaser’s right to VAT deduction is a self-written document by the purchaser if the purchaser who must pay VAT due to the VAT reverse charge is unable to obtain an invoice from the seller. The document must contain the VAT information that the Value Added Tax Act requires on invoices, and the VAT rate and the VAT payable on the purchase or intra-community acquisition.

A precondition for the right to deduct VAT payable on imported goods is that the importer holds a customs clearance decision and the related documents.

The purchaser of a rental service may deduct the VAT payable on import of the goods which they have rented if the purchaser is liable to pay VAT on the renting of the goods by virtue of the VAT reverse charge mechanism (section 113 of the Value Added Tax Act). In the same way as above, the VAT deduction also in this case requires that the purchaser holds a customs clearance decision and the related documents.

8.2 Deficient or incorrect VAT information on an invoice

The purchaser must hold the original invoice when making the VAT deduction. However, in practice, if the purchaser records the deductions on an accrual basis, it is permissible for them to deduct the VAT even though the invoice has not been received yet. If the purchaser receives the invoice later and finds out that the invoice does not correspond with the VAT deduction, the VAT deduction must be corrected. If the invoice is incorrect, the purchaser must ask the seller to issue a new invoice. The purchaser does not have a right to VAT deduction when the invoice is incorrect. To get the VAT deduction, they must ask the seller to issue a new, corrected invoice. The seller must issue a new invoice in replacement of the incorrect one, and the new invoice must contain a reference to the original invoice.

If the seller has entered information on an invoice that does not correspond to the actual circumstances, no right to a VAT deduction can be granted to the purchaser. For example, the purchaser does not receive a right to VAT deduction if the seller mentions VAT payable on the invoice in a situation where the seller is not registered in the VAT register. However, if the Finnish Tax Administration finds that the purchaser could not have been aware of the seller entering false information on the invoice, and if the sales are generally subject to VAT in similar circumstances, the purchaser may be granted the right to deduction by virtue of protecting good faith.

The Finnish Tax Administration may accept the deduction even if the VAT liable person does not have an invoice meeting the requirements of the Value Added Tax Act on the information content of an invoice if the VAT liable person can prove by other means that he is entitled to the deduction.

The purchaser is entitled to make a deduction based on the invoice even if the seller’s name has been misspelled, the spelling is different from the name in the Business Information System, or the seller’s name or address is incomplete. The purchaser is entitled to the deduction, because the Business ID identifies the seller in such a case.

Misspelling or a similar small mistake does not affect the purchaser’s right to deduct VAT on the condition that they have purchased the goods or services for their VAT-deductible business activity, and that no restrictions of VAT deductibility apply to the goods or services in question. For example, if the unit price is wrong but the invoice total is correct, the purchaser is entitled to the deduction. In this case, the purchaser does not have to ask the seller to issue a new invoice.

The Finnish Tax Administration may also accept a VAT deduction in a situation where small purchases, paid in cash, were made, and the technical circumstances make it practically impossible to obtain an invoice. A typical example is a parking fee paid via vending machine.

If the seller follows the VAT margin scheme procedure of second-hand goods, works of art, antiquities and collectibles, the purchaser has no right to deduct VAT. When the seller follows the VAT margin scheme procedure of second-hand goods, works of art, antiquities and collectibles, the invoice must not show the amount of VAT.

When goods are transferred from a tax warehouse in the appropriate process, a requirement for the right to deduct VAT is that the VAT liable person has a calculation that shows the base of VAT to be paid. In addition, the VAT liable person must have an invoice, or a document of other kind serving as the invoice, issued by the seller for all the sales, imports and intra-community acquisitions that take place in the tax warehouse. The calculation is the actual bookkeeping voucher, and the original invoices are its enclosures. The calculation must contain references to these invoices.

It is recommended that the purchaser checks the validity of the seller’s VAT registration to make sure that the purchaser has the right to deduct the VAT. This can be done in the Business Information System at www.ytj.fi or via the service number of the Finnish Tax Administration.

9 Invoicing of pass-on expenses

9.1 Expenses paid on behalf of another company

A company liable to pay VAT may sometimes pay expenses of taxable business on behalf of another company. A typical example is the travel or hotel expenses paid on behalf of an employee of another company in the same group of companies.

If a VAT liable company is invoicing another company in order to pass on VAT included expenses, which the VAT liable company paid on behalf of the another company, this is treated as a taxable sale. The principle for passing on the expenses is that the original VAT rate should generally be used because the nature of the goods/services does not change when expenses are re-invoiced. If the company adds a service charge to the invoice, the added charge is treated as part of the taxable sales. The VAT rate for the service charge is the same as that for the expense being passed on. When invoices are issued to pass on expenses that have varying VAT rates, the service fee must be distributed to these VAT rates based on the original prices of the goods and services without VAT.

When passing on expenses, the original invoice may be VAT-exempt because of the seller’s VAT status. The reason for this may be, for example, that the seller is a small-scale business operator. If such an invoice is passed on, and the party that passes on the invoice/expense has a VAT status that does not allow it to invoice VAT-exempt, VAT must be added even if the original invoice did not contain any VAT.

If the party that passes on the expenses is not liable to pay VAT, it cannot add VAT to its invoices. In this case, when it issues an invoice to pass on expenses, the invoice cannot contain VAT. As a result, neither the party that passes on the expense nor the party that finally pays the expense can deduct the VAT included in the original invoice. An exception to this is the purchase of energy resources, from which a VAT liable person operating in leased premises or the premises of a real estate company is entitled to deduct VAT, even when the energy resources are included in the tax exempt rent or maintenance charge for the immovable property (section 111 of the Value Added Tax Act).

The provisions of Value Added Tax Act governing the place of supply – for both goods and services – are applicable to all situations of passing on expenses to another party. If the place of supply of the passed on goods or services is another EU Member State or outside the EU, no VAT is to be paid to in Finland. An example of such a service is advertising in a situation where an advertising service is sold to an operator of trade or business and the VAT reverse charge applies.

9.2 Expenses directly related to the own business of a company

If a company issues an invoice for expenses that are directly related to its own business operations, it is not treated as passing on expenses to another company. Instead, it is the company’s own sales of goods or services.

When the seller issues an invoice containing expenses arising from sold goods or services, the expenses are a part of the VAT base of the sales. From this follows that these expenses must have the same VAT rate as the goods or services that are being sold. The VAT rate applicable when the seller made the purchases is not significant. In the same way, whether the seller were to issue a separate invoice that lists the paid expenses or whether the seller were to add a fee to the amounts is not significant.

9.3 VAT-exempt invoicing of pass-thru expenses

As provided in Article 79(1)(c) of the VAT Directive, the VAT base must not include the amounts received by a taxable person from the customer, as repayment of expenditure incurred in the name and on behalf of the customer, and entered in his books in a suspense account. The taxable person must furnish proof of the actual amount of the above expenditure, and the taxable person cannot deduct any VAT which may have been charged.

The Finnish Value Added Tax Act does not contain comparable provisions on pass-thru expenses. However, by virtue of the VAT Directive’s interpretative effect, the principle can be applied in Finland as well.

A pass-thru expense as referred to in the VAT Directive is usually an expense paid to a public authority. The important factor is that the charge had been paid on behalf of the final customer and in that customer's name. In other words, it is not a fee that the taxable person must pay to public authorities relating to its own activities. Instead, the taxable person only acts on behalf of its customer – for example, it can get a public licence for its customer. The public charge that is covered as a pass-thru expense is not part of the taxable person’s sales; instead, the taxable person treats it in its accounting as a pass-through amount.

Examples of pass-thru expenses include paid fees for a new power utility connection in the construction industry, where the builder can pay such a fee on the customer's behalf. Another example is the paid import taxes in a situation where a forwarding agent has settled the import taxes on its customer's behalf. In the same way, attorneys-at-law often pay transfer tax, court litigation fees, and witnesses' expenses on behalf of their clients. Other examples of pass-thru expenses include visas for travelling, paid vehicle registrations and license plates, fishing licenses, etc., paid on behalf of a customer.

No sales margin can be added to a pass-thru expense, because it is in the nature of a pass-thru expense that it is invoiced in exactly the same amount as it was originally charged. For this reason, if a fee of some kind is added to the invoice of a pass-thru expense, such a fee must be regarded as a compensation for a service related to invoicing. From this follows that VAT must be paid on the fee (for more information, see decision KHO 8.10.1998 of the Supreme Administrative Court, archival record 2082).

VAT-exempt pass-thru expenses differ from pass-on expenses in that when it is a question of a pass-thru expense, both the original seller and the final end customer are aware of the identities of the parties that are the actual seller and buyer of the goods or services. In these circumstances, the relevant agreement is made between the original seller and the final end customer (being the buyer). Consequently, the obligation to pay the sum lies with the final end customer. The primary payer of the charge is not the party that has an obligation to pay it.

If a charge paid to a public authority cannot be treated as a pass-thru expense, it is generally regarded as being part of the sold goods/services. As a result, its amount is then simply included in the VAT base of the sold goods/services. If the party that issues the invoice is merely passing on the expense paid to a public authority, the instructions above in Section 9.1 on how pass-on expenses must be applied. If the party issuing the invoice for pass-on expense does not meet the requirements for VAT-exempt sales, it must add VAT to the amount. When a public authority imposes public charges, it is not regarded as an activity taking place ‘in the conduct of business’ as referred to in section 1 of the Value Added Tax Act. For this reason, public charges that must be paid to public authorities are exempt from VAT. When an operator of trade or business liable to pay VAT issues an invoice to pass on an expense consisting of such a charge, it is treated as invoicing subject to VAT. The VAT rate in this case is 24%.

10 Procedure involving a waiver statement

Under section 50, subsection 2 of the Act on the Assessment Procedure for Self-assessed Taxes, the Finnish Tax Administration can refrain from imposing VAT or from making an adjustment if the reason for unpaid VAT or excessive refund is an error that has caused too much VAT to be paid by another party liable to tax, or caused an amount of VAT to remain unrefunded. A precondition for the renunciation is that the party liable to pay VAT presents a commitment given by the party who is entitled to a refund that they waive their right to such refund. The commitment must contain a specification of each business transaction involved.

The provision can only be applied to situations where the Finnish Tax Administration would otherwise impose the VAT to be paid afterwards. Approval of the waiver statement by the Finnish Tax Administration is discretionary. Waivers made in advance will not be accepted, even if the customer states that they have acted incorrectly.

If the Finnish Tax Administration accepts a waiver statement during a tax audit, for example, it is not necessary for the party liable to pay VAT to issue new, corrected invoices.

11 Penalty charge for negligence

If a party liable to pay VAT does not, even after Finnish Tax Administration’s request, appropriately and in time fulfil an obligation defined in section 39 of the Act on the Assessment Procedure for Self-assessed Taxes, neglecting it either fully or in part, the Finnish Tax Administration will impose a penalty charge for the negligence as provided for in that provision. The maximum charge that can be imposed is €5,000.

The obligations listed in section 39 of the Act on the Assessment Procedure for Self-assessed Taxes include the obligation to issue invoices (section 209b of the Value Added Tax Act), the obligation to enter information on invoices (section 209e of the Value Added Tax Act), and the obligation to keep accounts and records for the purposes of taxation (sections 26 and 27 of the Act on the Assessment Procedure for Self-assessed Taxes).

The Finnish Tax Administration may refrain from imposing the penalty charge for negligence if negligence is minor or if there is a valid reason for the negligence. Examples of what can be viewed as a valid reason for negligence include the VAT liable person falling ill, and situations where the obligation cannot be fulfilled due to a force majeure.