Refund of VAT to foreign businesses established in the EU

This is an unofficial translation. The official instruction is drafted in Finnish and Swedish languages.

This guidance concerns the VAT refund procedure for businesses established in the European Union. They should use the electronic portal maintained by the tax authority in their own Member State to submit the application for a refund of VAT.

Foreign businesses have in some cases the right to receive a refund of the input VAT included in the price of goods and services purchased in Finland. The guidance refers to this type of refund as 'VAT refund for foreign businesses'. The requirements and conditions for obtaining a refund are explained in this guidance.

This guidance explains who and what type of business operations qualify for refunds, and lists the purchases that may contain input VAT for which refunds are granted. It also includes information about submitting the electronic application, its processing, and how a refund decision can be appealed against. The final section lists the codes that describe the nature of goods and services eligible for the VAT refund scheme.

The guidance is updated and re-edited due to the new terms introduced on 1 January 2017 in the Act Governing Self-assessed Taxes and the new Act on Tax Collection, and due to the fact that the previous Act Governing the Tax Account system has been repealed. The following sections below are re-edited: 3.1.3 Reverse charge, 4 Accepted types of purchases with input VAT, 5.3 Information required on the application, 5.4 Engaging the services of an agent or a representative, 7 Decisions may be appealed against and 8 Codes used in VAT refund applications to Finland.

The section 5.4 Required Enclosures of guidance is updated (17 Jan 2019). The update concerns Power of Attorney. 

1 Introduction

Taxable persons established in other Member States are entitled to reclaim their input VAT by submitting an application to Finland through the electronic portal maintained by the tax authority of their own Member State. Paper application forms are not available.

Electronic applications should be submitted within 9 months from the end of the calendar year to which the refund period relates. For example, applications for the calendar year 2016 should be submitted at the latest on 30 September 2017.

1.1 Applicable legal provisions

The guidance is based on the provisions of the Value Added Tax Act (Arvonlisäverolaki 1501/1993). They define the circumstances and requirements for VAT refunds for businesses:

• that are established in the European Union (§§ 156 a–156 I, VAT Act)
• that are not liable to VAT for their sales in Finland, and that do not have a fixed establishment, from which they are carrying out taxable business activities in Finland (§§ 122–126, VAT Act)

Refund for foreign business is based on the provisions laid down in the Council Directive 2008/9/EC laying down detailed rules for the refund of value added tax, provided for in Directive 2006/112/EC, to taxable persons not established in the Member State of refund but established in another Member State.

1.2 Rates of VAT

Basic VAT rate	24%
Foodstuffs and animal feed Restaurant and catering services	14%
Certain other services such as: Passenger transport, accommodation in hotels, sales of books Services offered to facilitate physical exercise or sporting activities Services offered to provide admittance to exhibitions, sports events, other cultural and entertainment events as well as entrance to the institutions that arrange such events.	10%

1.3 Contact details of VAT refund authority

Applicants should use the electronic portal maintained by the tax authority in their Member State of establishment to reclaim Finnish VAT. Finnish Tax Administration processes the electronically submitted applications in Finland.

Finnish Tax Administration
Postal address: P.O. Box 30, FI-00052 Vero, Finland
Telephone: +358 (0)29 497 008
Fax: +358 (0)29 512 6117

2 Requirements for applicants

Foreign businesses may have the right to receive refund of the VAT included in the price of goods and services purchased in Finland. VAT may be refunded to foreign applicants if the following requirements are met:

• The applicant does not have a fixed establishment for VAT purposes in Finland from which the applicant is conducting business.
• The business of the applicant in Finland does not include any other supply of goods and services than:

1. Sales for which reverse charge is applied
2. Sales in which the buyer is the State of Finland
3. Sales of transportation services, and ancillary services to them, which are not taxable under §§ 71, 72 d or 72 h, VAT Act.

Reverse charge, referred to above in (1), concerns the following sales (and involves the obligation of the buyer, instead of the seller, to pay the VAT):

• Sales of taxable investment gold (§ 8 a, VAT Act)
• Sales of emission rights (§ 8 b, VAT Act)
• Sales of construction work, and the renting out of employees to perform construction work (§ 8 c, VAT Act)
• Sales of scrap metal (§ 8 d, VAT Act)
• Any sales made by foreign businesses that do not have a fixed establishment for VAT purposes and that have not applied for a voluntary VAT registration in Finland (§ 9, VAT Act).

VAT paid in connection with the importation of goods can also be refunded.

Situations in which a foreign business has a fixed establishment in another Member State

Fixed establishments located in other Member States are entitled to VAT refund. If the applicant has more than one fixed establishment in different Member States, every one of them should submit an application separately in their Member States of establishment. Within the framework of the refund procedure, the Member State of establishment will examine the applicant's VAT liability, and forward the application to the Finnish Tax Administration for purchases made in Finland. The requirement for a VAT refund is that the invoices are addressed to the VAT liable fixed establishment.

Businesses with intra-Community sales or acquisitions in Finland

Intra-Community sales of goods (also known as 'intra-Community supplies') refer to the supply of goods under an arrangement where the seller, the buyer, or a third party on their behalf, will transport the goods from Finland to another Member State. Intra-Community acquisition refers to the purchase of goods, against payment, under an arrangement where the seller, the buyer, or a third party on their behalf, will transport the goods to the buyer from one Member State to another.

Foreign businesses carrying out either intra-Community sales or intra-Community acquisitions in Finland are subject to the notification duty in Finland. They should register for notification duty, and file VAT returns and Recapitulative Statements to the Finnish Tax Administration.

If a foreign business wants to receive refunds for the input VAT relating to their deductible purchases, made in connection with their intra-Community supply in Finland, it is not enough to only register for the notification duty: the business should register for VAT in Finland. In other words, foreign businesses making intra-Community sales are not eligible for VAT refund. They should file VAT returns in order to report their input VAT the same way as Finnish businesses do.

Foreign businesses making intra-Community acquisitions in Finland are eligible for VAT refund if they are not liable to register for VAT on their supply of goods or services in Finland and do not have a fixed establishment for VAT purposes in Finland. Foreign businesses carrying intra-Community acquisitions in Finland that do not entitle to deduction must register for VAT liable as a buyer or on self-supply. In this case, they must declare the VAT to be paid for the intra-Community acquisition and pay the VAT.

For more information, see our guidance 'VAT registration of foreigners in Finland (in Finnish and Swedish).'

3 Business operations that qualify for refund

The right to VAT refunds requires that the purchases have been made for the applicant's business operations abroad which, if carried out in Finland would give rise to a right of input VAT refund or deduction (see section 3.1 below). Secondly, it is also required that the purchases have been made for the applicant's business operations which give rise to a right of input VAT deduction in the Member State of establishment (see section 3.2 below).

3.1 Operations that would entitle to deduction or refund in Finland

The main requirement for VAT refund is that the applicant has made the purchases for business operations abroad which, if carried out in Finland, would entitle to a refund or a deduction. The right to refund is governed by the legislation of Finland. The rules for VAT refunding include those that concern the VAT liability, those that concern partial rights to VAT deduction and those that concern the restrictions on the right to deduct. For more information on restrictions, see section 4 below.

To sum up, the right to VAT refund requires that one of the requirements below is met:

• The purchase concerns the applicant's business operations abroad, which, if carried out in Finland, would be taxable.
• The purchase concerns the applicant's business operations abroad, which, if carried out in Finland, would entitle the applicant to a refund according to the VAT Act (such as activities known as 'zero-rated', see below in sections 3.1.1 and 3.1.2 for further details).
• The purchase concerns sales of transportation services in Finland, and ancillary services to them, which is not taxable under §§ 71, 72 d or 72 h, VAT Act (see section 3.1.1 below).
• The purchase concerns sales of goods and services by the applicant in Finland for which the buyer is liable to pay VAT (known as reverse charge - for more information, see section 3.1.3 below).
• The purchase concerns sales of goods and services by the applicant in Finland to the State of Finland.

3.1.1 Operations subject to a zero-rate

If the purchase relates to applicant's business operations abroad, which would be treated subject to zero-rate if they were operated in Finland, the applicant is entitled to a refund for the input VAT. This implies that supply of zero-rated goods and services give a right to deduct the input VAT when related purchases have been made.

If the foreign business has carried out certain sales of transport services or ancillary services to them, it is eligible to a VAT refund of the purchases related to those sales.

If the purchase relates to some other zero-rated operations in Finland (such as export trade, intra-community supply of goods, VAT-exempt vessels, or services related to them), the applicant is not eligible for VAT refund normally offered to foreign businesses. To be able to deduct the input VAT in respect to these purchases, the foreign business should register for VAT in Finland. Input VAT is then refunded on the basis of VAT returns, in the same way as for the Finnish businesses.

For more information, see our guidance 'VAT registration of foreigners in Finland (in Finnish and Swedish)'.

3.1.2 Investment gold, gold material and semi-manufactured gold products

If the purchase relates to applicant's business operations abroad, which if carried out in Finland would be treated as exempt sales of investment gold, the foreign business is entitled to VAT refund for:

• VAT paid on taxable investment gold bought from a supplier liable to VAT,
• VAT that is included in the purchase of gold that will be transformed by the applicant, or at its request, into investment gold,
• VAT paid on any services for the transforming of the investment gold or other gold in respect of form, weight or purity.

For more information, see our guidance 'VAT treatment of investment gold (in Finnish and Swedish)'.

3.1.3 Reverse charge

General liability to VAT under the reverse charge

Reverse charge is applicable when the seller of goods or services is a foreign business that has no fixed establishment for VAT purposes in Finland from which he is conducting its business and has not applied for a voluntary VAT registration in Finland. In terms of these sales, the buyer is VAT liable. If the foreign business has no other supply in Finland than those falling into this category, it is entitled to VAT refund for foreign businesses relating to its purchases in Finland.

However, there are cases in which the reverse charge is not applicable. The foreign business, being the seller, is always liable to pay the VAT in the following circumstances:

1. The buyer is a foreign business with no fixed establishment for VAT purposes in Finland and no VAT registration in Finland.
2. The buyer is a private person.
3. The sale is a distance sale of goods from another Member State to private persons in Finland or to other non-VAT-liable persons comparable with them. For more information, see our guidance Rules and procedures regarding distance sales to non-taxable persons and VAT.
4. The sale is a supply of passenger transportation services, or services associated with the admittance to teaching, scientific, cultural, entertainment or sports events, fairs, exhibitions or other such events.

If the foreign business has made sales in Finland that correspond to the above definition, it is not entitled to VAT refund for foreign businesses for any part of its operation. To be able to deduct the input VAT in respect to its purchases, the foreign business should register for VAT in Finland. Input VAT is then refunded on the basis of VAT returns, in the same way as for the Finnish businesses.

For more information, see our guidance 'VAT registration of foreigners in Finland'.

Construction sector: reverse charge

The reverse charge is applied to certain construction services and related employee leasing in Finland. The reverse charge should be applied whenever both of the following conditions are met:

• The service has the characteristics of construction services, or the characteristics of employee leasing for purposes of building, and
• The buyer is a business that sells construction services or rents out workforce as leased employees more than on a temporary basis.

Reverse charge scheme should be applied to the supply if a Finnish or a foreign business sells construction services to a foreign business, which in the course of its normal activities also is a seller of construction services more than on a temporary basis. If the foreign buyer does not have a fixed establishment for VAT purposes in Finland and has not voluntarily requested VAT taxpayer status here, it is required that the foreign buyer registers for VAT liable, and starts filing VAT returns to the Finnish Tax Administration. VAT returns should contain information concerning all the business conducted in Finland. Input VAT is refunded on the basis of VAT returns, in the same way as for the Finnish businesses.

For more information, see guidance 'Reverse VAT liability in the construction sector (in Finnish and Swedish)'.

Scrap metal sector: reverse charge

The reverse charge is applied to the operations of the scrap metal sales sector; it should be applied whenever both of the following conditions are met:

1. The buyer is a business registered for VAT;
2. The goods sold are listed under the CN nomenclature, classified by the VAT Act as being scrap metal within the meaning of the customs tariff.

When both the seller and the buyer are foreign businesses, not on the Finnish VAT Register, the reverse charge scheme (§ 9, VAT Act) is not applied on the supply of scrap metal. The foreign seller should pay VAT; this involves the obligation to register for VAT in Finland as a business liable to pay VAT. In this case, the foreign seller is not entitled to VAT refund for foreign businesses for any part of its operation. Input VAT is refunded on the basis of VAT returns, in the same way as for the Finnish businesses.

For more information, see our guidance 'Reverse-charge VAT on sales of scrap metal (in Finnish and Swedish)'.

Buyers of emission rights: reverse charge

As for the sales of emission rights (for combatting global warming) in Finland, the parties to the transaction should apply the reverse charge. What is meant by 'emission rights' is the allowance to emit one tonne of carbon dioxide equivalent during a specified period (within the meaning of the Council Directive 2003/87/EC on Greenhouse gas emissions). The party that should pay VAT is the buyer, if the buyer is registered for VAT in Finland. If the buyer is not VAT registered, the seller of the emission allowance is liable to account for the VAT and to pay it on the sale. In this case, the foreign seller who has made sales in Finland that correspond to the above definition, is not entitled to VAT refund for foreign businesses for any part of its operation. To be able to deduct the input VAT in respect to these purchases, the foreign business should register for VAT in Finland. Input VAT is then refunded on the basis of VAT returns, in the same way as for the Finnish businesses.

Buyers of gold: reverse charge

If the purchase of goods or services is related to supply of taxable investment gold of a foreign business, gold materials, or semi-manufactured gold in Finland or in foreign countries and the reverse charge has been applied to the sales transactions, the foreign business is entitled to receive a refund for the input VAT. A condition for the refund is that the business activity abroad would entitle to opt for taxation if carried out in Finland. The right to refund also concerns any goods and services that have been purchased for the purposes of supplying a taxable intermediary service of taxable investment gold.

3.2 Operations that would entitle to deduction in the Member State of establishment

Another requirement for the right to refund is that the applicant should carry out taxable business activities that are treated as eligible to VAT deductions in the Member State of establishment. The applicant may have business activities in the Member State of establishment that in part are treated as deductible, and in part, as non-deductible supply of goods and services. In these circumstances, the maximum refundable VAT is what the legislation of the Member State of establishment provides for.

What is meant by 'the Member State of establishment ' is the country where the applicant has its domicile for purposes of business, or a fixed establishment from which business transactions are effected.

3.2.1 The deductible proportion

The rules that primarily determine the amounts of VAT refund are the Finnish VAT rules that concern the VAT liability, partial rights to VAT deductions and the restrictions of the right to deduct. Although Finnish VAT rules determine the amount of refund, its maximum can be no higher than what is deductible in the Member State of establishment. Rules for defining this deductible portion are based on Article 173 of the Council Directive (2006/112/EC, VAT System) and on how this Article has been implemented in the legislation of the Member State of establishment. Under Article 173, the computations of deductible portions should comply with the requirements of Art. 174 and Art. 175 for all transactions carried out by the taxable person.

Under the Directive, there are alternative methods available to different Member States of determining the deductible portion. Member States may authorise or require of VAT taxable persons that they:

1. Determine a pro rata for each sector of their business, and keep separate accounts for each sector;
2. Make the deduction on the basis of the full or partial use of the goods and services;
3. Make the deduction in respect of all goods and services used for the purposes of taxable business; and
4. If the non-deductible VAT by the taxable person is insignificant, it is to be treated as nil.
5. The deductible proportion should be determined separately for each year, for constant use during that year. In this way, it is of a provisional nature, and depends on the preceding year's transactions. Deductions made on the basis of the pro rata should be adjusted when the final proportion is fixed during the following year.

The applicant should declare the valid deductible proportion as a percentage with two decimal points. The deductible proportion should be expressed in connection with each invoice and import document.

3.2.2 The adjustment procedure of the deductible proportion

The applicant should correct a pending application or an already refunded amount, if the amount of proportional deduction has been adjusted and this has resulted in a deviation from its provisional value i.e. the one used on the application. The deadline for such a correction is the end of the calendar year following the application period. The applicant should submit the pro rata adjustment through the web service maintained by the tax authority in their Member State of establishment. The Finnish Tax Administration will process the adjustment either in connection with the applicant's next application or in issuing a separate decision.

4 Accepted types of purchases with input VAT

Foreign businesses are entitled to a VAT refund e.g. on the following taxable purchases:

• Hotel accommodation, travel in Finland
• Fuel and lubricants for cars, spare parts for cars, short-term car rental and parking
• Admission to conferences, exhibitions and fairs
• Samples of goods
• Office supplies, photocopies, maps and professional literature.

The right to VAT refund corresponds to the Finnish businesses' right to deduct input VAT. The restrictions of deduction rights that are set out in VAT Act also apply to the VAT refund payable to foreign businesses. In this way, the following purchases, among others, are not eligible for refund:

1. Immovable property that the taxable person or his employees use as a residence, a kindergarten, a recreational or leisure facility as well as goods and services connected with it or its use.
2. Goods and services related to transportation between the residence and place of work of the taxable person or his employees.
3. Purchases intended for the private consumption of the taxable person or his employees. Such a purchase is e.g. breakfast in connection with hotel accommodation.
4. Goods and services for representation i.e. entertainment purposes.
5. Purchase of a passenger car and purchase of goods and services related to passenger car when the passenger car has not been purchased solely for business use. No foreign refund is paid in case a passenger car is used for purposes that do not entitle to a deduction, even if such use would only represent a small percentage of the total.
6. Expenses associated with the supply of exempt investment gold. (Please see 3.1.2. E.g. general costs and transportation costs in connection with sales operations are not eligible for VAT refund.)
7. The goods and services that a foreign travel agent has bought from other businesses in his own name, and which are used directly for the benefit of the passengers or travellers. Travel agency services are within the VAT margin scheme. For this reason, the input VAT on such goods and services cannot be deductible and will not be refunded.

For more information (in Finnish or in Swedish), see our guidance 'Tax treatment of travel services under the VAT margin scheme'.

No refund is paid on purchases that are exempt from VAT, such as airline tickets for international flights. No refund is paid when the invoice wrongly includes VAT. If a seller has raised an invoice for goods or services with VAT, but no VAT should be payable in the circumstances, the Finnish Tax Administration will not refund the input VAT. Instead, the buyer should contact the seller to request for refund of incorrectly invoiced input VAT.

5 How can VAT refund be applied?

The applicant submits its VAT refund application using the electronic portal maintained by the applicant's Member State of establishment. A refund application to Finland can be made in English, Finnish and Swedish. The Tax Administration processes the electronically submitted applications in Finland. If the Finnish Tax Administration were to ask for any additional information during the refund process English, Finnish or Swedish can be used in the replies.

If the applicant is a member of a VAT group in the Member State of establishment, the application is submitted at VAT group level. However, if a business entity which is a part of a VAT group has been issued its own VAT number, it may also make an application independently for its own purchases.

Goods and services bought on the Åland Islands

The electronic procedure is also used when the purchase was made on the Åland Islands. Åland is an autonomous province that does not belong to the VAT and Excise tax area of the European Union, but does belong to the EU Customs territory and Customs Union. Refund may be requested for the VAT on accommodation expenses, for example, if the applicant's employee has travelled to Åland Islands.

Can additions be made later to a submitted application?

The applicant is allowed to supplement an application after it has been submitted. A forgotten enclosure, for example, can be added to the application by submitting a new version of the application through the electronic portal.

However, new invoices cannot be added to a submitted application. If new invoices should be added and the refund period has not yet expired, the applicant can create a new application for them. Alternatively, the applicant can include the invoices into next application that concerns the same calendar year.

There are no limitations to the number of applications. However, the formal requirements (refund period and refundable amount) should be fulfilled for each application. The recommended maximum number of applications per year is 5–6.

5.1 Refund period

The refund period shall not be more than one calendar year or less than three calendar months (in other words, 3 to 12 months that all should fall into the same calendar year). Refund period may only consist of entire calendar months, not parts of a calendar month. However, an application can cover less than three months e.g. December only, that is, if this is all that remains of the calendar year.

Refund periods must be in the past. This means that if the date of submittal is 15 July, the period concerned cannot include the month of July. Consequently, such an application cannot include any invoices dated on July that year.

An application cannot be submitted only on the basis that the applicant has received the invoice. In addition, it is required that the goods have been supplied, or the service has been rendered, or payment has been made. The input VAT on the purchases is related to the refund period during which the latter of the two following events occurred:

• Goods were delivered, service was rendered, or full or partial payment was made in advance of delivery
• Invoicing for the goods or services took place.

If the application concerns VAT on imported goods, its refund period is the month of customs clearance.

If the applicant has forgotten to include an invoice relating to an earlier period during the current calendar year in a previous application, it is permissible to include it in another application that concerns the same calendar year. In this way, an applicant who has forgotten a January purchase invoice from his application for the January-April period, it is permissible to include the input VAT on that invoice in another application, made at the end of the year. In this case, it is required that the refund period is specified as 'January to December'.

5.2 Minimum VAT refund

If an application that relates to the entire calendar year or to its remaining part, the refundable amount may not be less than €50. In this context, the 'remaining part of a calendar year' refers to October, November and December. If application is submitted during the calendar year, the minimum amount is €400.

5.3 Information required on the application

The following details should be given:

• The applicant's name
• The applicant's VAT number
• The applicant's street address, postal code and post office
• The applicant's e-mail address
• Description of the applicant's business activity for which the goods or services have been acquired. Use a NACE code to describe the business. Several codes may be used as necessary.
• The applicant's bank account details (the BIC code and bank account number expressed in the IBAN format)
• The refund period covered by the application.

It is required that the applicant gives a statement on their application that confirms the type of operation they engaged in the refunding country during the refund period, selecting one of the following alternatives: no supply of goods and services; only provision of services or the supply of goods in respect of which the VAT is payable solely by the recipient; only provision of certain exempt transport services or ancillary thereto.

Application should include a specification of invoices and import documents

Each invoice and import document should be listed. The following details should be given:

• Name and full address of the Finnish seller of goods or services (for import documents, fill in the name and address of the seller established outside the EU)
• Business ID of the Finnish seller, Y-tunnus in Finnish (not applicable for import documents)
• Country code FI for Finland (not applicable for import documents)
• Invoice date, invoice number or import document date and number
• Price in Euros excluding VAT
• The amount of VAT in Euros
• Deductible proportion expressed as a percentage (see section 3.2.1 above, The deductible proportion)
• Requested amount to be refunded, in Euros
• Code for describing the nature of purchased goods and services.

The codes that Finland accepts are listed in section 8 below. The code is expressed by using both the main and the sub code (in format: x.y or x.y.z). More than one code may be used per invoice or per import document if necessary. If the application were to contain codes that are not valid for Finland, or if it only displays a main code without the appropriate sub code, this part of the application may be rejected.

Information on the invoices

Businesses established in another Member State (Directive 2008/9/EC) are no longer, as of 1 January 2017, required to enclose invoices and import documents with refund applications submitted electronically.

However, the Finnish Tax Administration may ask the applicant to furnish original or scanned copy of an invoice or an import document. It continues to be required that the invoices have the mandatory information printed on them:

• Invoice date of issue
• Invoice number
• Seller's VAT registration number (i.e. their Finnish Business ID)
• Names and addresses of the seller and buyer
• Quantity and category of goods sold, extent and category of services sold
• Delivery date of goods, completion date of service delivery, or the date of payment of an advance payment, if such a date can be defined and it is not the same as the date of issue of the invoice
• Base of VAT, specifically for different VAT rates if applicable, unit price without VAT, any credits and discounts, if they have not been included in the unit price
• The rate of VAT that applies to that particular good or service being sold
• Total amount of VAT charged
• Reference to a previous invoice, if the invoice is intended as a correction to it.
• Simplified information on the invoices

Invoices with simplified information are acceptable in the following circumstances:

• Sale of goods or services is for €400 or less as the invoice total
• The invoice concerns retail sales (or similar, where majority of the buyers are private individuals)
• The invoice concerns restaurant and catering services or passenger transport services
• The invoice is a printout from a parking meter or a similar device.
• In this way, simplified information is enough on receipts from a department store, train tickets, bus tickets, machine-printed receipts for parking fees etc.

The following information is required for simplified invoices:

• Invoice date of issue
• Seller's name and VAT registration number (i.e. their Finnish Business ID)
• Quantity and category of goods, or a category of services
• Total amounts of VAT charged specifically for each VAT rate, or bases of VAT, specifically for each VAT rate.

Even if the invoice only had the simplified information printed on it, the applicant should specify the Finnish seller's Business ID on the application. This is required even if the electronic portal of applicant's Member State of establishment does not necessarily define it as a mandatory entry. On the other hand, the electronic portal may require the seller's address even in cases where no address is printed on the invoice or receipt due to simplified VAT details. In this case, the applicant may fill in the space with 'n/a' for 'not applicable'.

5.4 Engaging the services of an agent or a representative

An agent (or a representative) may complete the application on behalf of the applicant. Such an agent may be domiciled in Finland or elsewhere. Agent's name, full postal address and country code and e-mail address as well as a VAT registration number or a tax registration number should be stated on the application.

If an agent completes the application, a Power of Attorney should be enclosed, and it should specify the agent's powers. A Power of Attorney should state whether the agent is only authorised to submit the application or whether he also is authorised to receive the payment. The Power of Attorney should be scanned and attached to the application.

Power of Attorney which is effective until further notice does not have to be attached to every application the agent makes. The Finnish Tax Administration may ask for the Power of Attorney if necessary.

See here for a model Power of Attorney (pdf)

The model Power of Attorney is formatted as being effective until further notice. However, a Power of Attorney drafted by applicant in free-text format is also accepted, if it contains the same information as the model.

5.5 Last date to apply for refund

Applications for a VAT refund should be submitted through the electronic portal maintained by the tax authority in applicant's Member State of establishment within 9 months of the end of the calendar year to which the refund period relates. In this way, refund applications that concern the 2016 calendar year should be made on 30 September 2017. The Finnish Tax Administration will regard an application as complete only when all lines and spaces have been duly filled out. Applications that arrive past deadline are not taken into consideration.

5.6 Mandatory enclosures

Businesses established in another Member State (Directive 2008/9/EC) are no longer, as of 1 January 2017, required to enclose invoices and import documents with refund applications submitted electronically.

However, the Finnish Tax Administration may ask the applicant to furnish the original invoices and import documents, or copies of them, if this is necessary. If an agent completes the application, a Power of Attorney should be attached as a scanned file, and it should specify the agent's powers.

6 Description of the administrative procedure

6.1 Tax authority of the Member State of establishment forwards the application to Finland

After submittal of the application in the electronic portal, the tax authority of applicant's Member State of establishment will send a notification of receipt to the applicant. The tax authority will also check that the applicant has been VAT liable during the refund period concerned. Then they forward the application, its enclosures and the registration information to Finland. The rules require that the tax authority of applicant's Member State of establishment forwards the application to Finland within 15 calendar days of the date of submittal.

The tax authority of applicant's Member State of establishment will not forward the application to Finland if:

• During the refund period, the applicant was not registered as a taxable person liable to pay VAT in the Member State of establishment;
• The applicant carries out only such supply of goods or services that are VAT exempt, and who therefore has no right to deduct the input VAT;
• The applicant is covered by the exemption for small enterprises;
• The applicant is covered by the common flat-rate scheme for farmers.
• In this case, the tax authority in the applicant's Member State of establishment will inform the applicant that it will not forward the application to Finland.

When the application for VAT refund has successfully been received in Finland, the Finnish Tax Administration will send an electronic notification of receipt to the tax authority of the applicant's Member State of establishment.

This notification will then be transmitted to the applicant via the tax authority of the Member State of establishment. They will officially notify the applicant, in the way they choose, that the application has been received by the Finnish Tax Administration. This notification may be displayed to the applicant at the website of the electronic portal or be sent by e-mail or by letter.

6.2 Time limits for the processing of an application

The processing time of an application is four months as of the date of arrival in Finland. However, if the Finnish Tax Administration should require additional information, the standard processing time is extended to six months. Similarly, if the Finnish Tax Administration has to ask for additional information more than once, the time limit is further extended to eight months.

6.3 Request for additional information

The Finnish Tax Administration may ask the applicant to furnish additional information when deciding on an application. The information is requested with secured e-mail. The e-mail is sent from the address vatrefunds@vero.fi. If the applicant has engaged the services of an agent, the information will be asked of the agent.

The rules require that the Finnish Tax Administration should send a request for additional information within four months of the date of arrival of the application. The applicant should respond within one month of the date when the applicant or agent receives the letter.

For example, the Finnish Tax Administration may contact the applicant to ask about the business activities the applicant is conducting in Finland. Alternatively, the Finnish Tax Administration may ask for the copies of any invoices or import documents specified in the application. If necessary, the Finnish Tax Administration can contact the tax authorities of applicant's Member State of establishment or the Finnish seller of goods or services in order to ask for additional information.

6.4 Description of the decision and payment of refund

Based on the facts and information received from the applicant both on the original application and on a reply received after a request for additional information was made, the Finnish Tax Administration will decide on the request. The official decision, which can be appealed against, will be sent to the applicant by mail. Additionally, a duplicate of the letter, not considered official, is transmitted electronically via the tax authority of applicant's Member State of establishment. The tax authority can have the letter displayed to the applicant on their electronic portal.

The approved refund amount will be paid to the bank account in a Member State, as specified on the electronic application. The refunded amount can be smaller that shown on the decision, if the applicant's or agent's bank charges its own costs which reduces the amount.

If the Finnish Tax Administration has not asked the applicant for additional information, an approved refund is payable four months plus ten working days after the receipt of the application in Finland at the latest.

If the Finnish Tax Administration asked for additional information and the applicant responded on time, the following rules apply:

• One request for additional information: payment in six months plus ten working days.
• Several requests for additional information: payment in eight months plus ten working days.

If the processing time of an application is longer, and if actual date of payment is later than what is required under the above rules, the Finnish Tax Administration pays interest on the refund, as laid down in the provisions of the Act on Tax Collection (Veronkantolaki 13.9.2016/796). In this case, the same interest rate is applied as when VAT is being refunded to Finnish registered businesses.

7 Decisions may be appealed against

As of 1 January 2017 a written claim for adjustment is submitted to the Board of Adjustment in order to appeal against VAT refund decision or a debiting decision. The claims should only concern the VAT on purchases that had been included in the original VAT refund application.

The claim for adjustment should be addressed to the Board of Adjustment but it should be sent to the Finnish Tax Administration. If the appeal concerns a decision which is dated in 2016 or earlier, the appeal process follows the previous rules, that is, the complaint is addressed to Helsinki Administrative Court but should be sent to the Finnish Tax Administration.

Claims for adjustments cannot be delivered electronically. They should be written either in Finnish or in Swedish.

Mandatory contents of the claim for adjustment:

• Appellant's name
• Which decision is being appealed against
• Which section of the decision the claim concerns, and the suggested change to the decision, and
• On what grounds the changes the appellant seeks the changes.

If a representative lodges the claim for adjustment on behalf of the appellant, a Power of Attorney should be enclosed, and its text should expressly authorise the representative to lodge a claim.

The claim for adjustment should be made within three years of the calendar year of the period the refund decision concerns. However, a claim for adjustment can always be made within 60 days from receiving the notification of the decision. Decision documents are treated as having arrived to their recipients and therefore notified to them on the seventh day after the Finnish Tax Administration has sent them via postal services.

Example:
'A' wants to file in a claim for adjustment concerning a VAT refund decision, dated 9 October 2017, issued by the Finnish Tax Administration. The decision concerns the period from 1 January 2016 to 31 December 2016. 'A' should have the claim for adjustment delivered by 31 December 2019, and it should be written out as per the 'Instructions for Appeal' text enclosed with the VAT refund that 'A' received. Although the claim for adjustment is addressed to the Board of Adjustment, 'A' should deliver it to the Finnish Tax Administration.

8 Codes used in VAT refund applications to Finland

Applicants should use the codes listed in the text of the Commission implementing Regulation (EU) No 79/2012, Annex III, to describe the nature of goods and services purchased in Finland. The code is expressed by using both the main and the sub code (in format: x.y or x.y.z). Several codes may be used per invoice or import document if necessary. If the application were to contain codes that are not valid for Finland, or if it only displays a main code without the appropriate sub code, this part of the application may be rejected.

Fuel
1.3 Fuel for means of transport for paying passengers
1.4 Fuel used specifically for test vehicles
1.5 Petroleum products used for lubrication of means of transport or engines
1.6 Fuel purchased for resale
1.7 Fuel for means of goods transport
1.8.1 Fuel for passenger and multipurpose cars
Used exclusively for business purposes
1.8.2 Fuel for passenger and multipurpose cars
Used partly for commercial passenger transport, driving instruction or rental purposes
1.8.3 Fuel for passenger and multipurpose cars
Used partly for other than 1.8.2 purposes
1.9.1 Fuel for motorcycles, caravans and vessels for recreational or sports purposes, and aircraft with a mass less than 1 550 kg
Used for commercial passenger transport, driving instruction or rental purposes
1.9.2 Fuel for motorcycles, caravans and vessels for recreational or sports purposes, and aircraft with a mass less than 1 550 kg
Used for business purposes
1.10 Fuel for machines and agriculture tractors
1.12 Fuel for means of passenger transport other than 1.8 and 1.9.

Hiring of means of transport
2.4 Hiring of means of goods transport
2.5 Hiring of passenger and multipurpose cars
2.6 Hiring of motorcycles, caravans and vessels for recreational or sports purposes, and aircraft with a mass less than 1 550 kg
2.12 Hiring or means of transport other than 2.5 and 2.6.

Expenditure relating to means of transport (other than goods and services referred to under codes 1 and 2)
3.3.1 Purchase of a means of transport for paying passengers
3.3.2 Maintenance of a means of transport for paying passengers
3.3.3 Purchase and installation of accessories for a means of transport for paying passengers
3.3.4 Garaging or parking of a means of transport for paying passengers
3.3.5 Other expenditure relating to a means of transport for paying passengers
3.4.1 Purchase of a means of goods transport
3.4.2 Maintenance of means of goods transport
3.4.3 Garaging or parking of means of goods transport
3.4.4 Expenditure relating to means of goods transport other than 3.4.1, 3.4.2 and 3.4.3.
3.5 Maintenance of passenger and multipurpose cars
3.6 Maintenance of motorcycles, caravans and vessels for recreational and sports purposes, and aircrafts with a mass greater than 1 550 kg
3.7 Expenditure, other than maintenance, garaging and parking relating to passenger and multipurpose cars
3.8 Expenditure, other than maintenance, garaging and parking, relating to motorcycles, caravans and vessels, for recreational and sports purposes, and aircrafts with a mass greater than 1 550 kg
3.15 Maintenance of means of passenger transport other than passenger and multipurpose cars, motorcycles, caravans and vessels for recreational and sports purposes, and aircraft with a mass greater than 1 550 kg
3.16 Garaging or parking of means of passenger transport
3.17 Expenditure, other than maintenance, garaging or parking relating to means of transport other than passenger and multipurpose cars, motorcycles, caravans and vessels for recreational and sports purposes, and aircraft with a mass greater than 1 550 kg.

Travel expenses, such as taxi fares, public transport fares
5.1 For the taxable person or an employee of the taxable person
5.2 For someone other than the taxable person, or an employee of the taxable person

Accommodation
6.1 Expenditure on lodging and accommodation for the taxable person, or an employee of the taxable person
6.2 Expenditure on lodging and accommodation for someone other than the taxable person or an employee of the taxable person
6.6 Expenditure on lodging and accommodation for onward supply

Food, drink and restaurant services
7.1 Food and drink provided by hotels, bars, restaurants and boarding houses, including breakfast
7.2 Food and drink provided in the context of a conference, fair, exhibition or congress
7.4 Restaurant services purchased for onward supply

Admission to fairs and exhibitions
8.1 For the taxable person or an employee of the taxable person
8.2 For someone other than the taxable person or an employee of the taxable person

Expenditure on luxuries, amusements and entertainment
9.1 Purchase of alcohol
9.2 Purchase of manufactured tobacco
9.3 Expenditure on receptions and entertainment

Other
10.1 Tools
10.2 Repairs within a warranty period
10.3 Services connected with education
10.4.1 Work on immovable property
10.4.2 Work on immovable property used as a dwelling
10.4.3 Work on movable property other than code 3
10.5.1 Purchase or hiring of immovable property
10.5.2 Purchase or hiring of immovable property used as a dwelling, or for recreational or leisure use
10.5.3 Purchase or hiring of movable property connected with or used in immovable property used as dwelling, or for recreational or leisure use
10.5.4 Purchase or hiring of movable property other than code 2
10.6 Provision of water, gas or electricity through a distribution network
10.7 Gifts of a small value
10.8 Office expenses
10.9 Participation in fairs and seminars, education or training
10.11 Expenditure on postage of mail to countries outside the EU
10.12 Expenditure on fax and phone in connection with accommodation
10.13 Goods and services acquired by a travel organiser for the direct benefit of the traveller
10.14 Goods purchased for resale other than 1.6
10.15 Services purchased for resale other than 6.6 ja 7.4
10.16 Work on property
10.17.1 Expenditure on immovable property used as a dwelling, or for recreational or leisure use
10.17.2 Expenditure on immovable property other than what is referred to by code 10.17.1.