Significant VAT changes will occur in Finland as of September 2024, impacting various industries. Understanding and preparing for these changes is crucial for maintaining your business's financial stability and competitiveness.
The upcoming changes impact different sectors in one way or another, and your company must prepare itself to meet the new requirements.
“The upcoming VAT changes in Finland require careful preparation and efficient management from businesses. The changes affect various sectors differently, but the key is understanding their impact and planning accordingly", says Jaana Palomäki, CEO of Ecovis Finland, providing tax, accounting, and corporate secretarial services in Finland.
Palomäki continues: "Effective management and proactive preparation will help your business adapt to the new VAT rates and maintain its competitiveness in the market.”
Upcoming key VAT changes
Increase in standard VAT rate: Starting September 1, 2024, the standard VAT rate will increase from 24 percent to 25.5 percent. This affects all goods and services not covered by reduced VAT rates.
Changes in reduced VAT rates: The reduced VAT rate of 10 percent will increase to 14 percent, except for newspapers and periodicals. This change affects books, passenger transport, accommodation services, pharmaceutical products, and admission fees to cultural and entertainment events.
How to prepare for the changes?
1. Efficient Management: Businesses must update their accounting and invoicing systems to reflect the new VAT rates. This may require software updates and staff training on new procedures.
2. Pricing Strategy: It's essential to assess the impact of price increases and communicate to customers why prices are rising. Reviewing your pricing strategy helps minimise the risk of reduced demand.
3. Financial Planning: Companies should update their financial forecasts and budgets to align with the new VAT rates. This helps maintain cash flow management and anticipate potential economic impacts.
4. Consultation and Support: It is advisable to consult a tax expert to understand the changes' implications and ensure your business complies with the new regulations.
For more information and consultation, contact out team at Ecovis Finland.