Article

Mandatory e-Invoicing in Finland: What it Means for Your Business

22 August 2023

Finland is taking a proactive approach to e-invoicing, mandating its use for B2G and B2B transactions.

If you're a business owner, individual, or a government supplier operating in Finland, it's important to understand what e-invoicing is, why it's mandatory, and how it can benefit you.

E-invoicing in Finland: A Quick Overview

It's important to understand what e-invoicing is, why it's mandatory, and how it can benefit you.
It's important to understand what e-invoicing is, why it's mandatory, and how it can benefit you.

E-Invoicing/CTC Model

  • B2G: Interoperability/Peppol
  • B2B: Post Audit

Mandatory Infrastructure

  • B2G: Tieke, Peppol or contracted service providers
  • B2B: Not Applicable

Mandatory e-Invoice Format

  • B2G: TEAPPSXML, Finvoice 3.0, EN compatible
  • B2B: Not Applicable

Issuing Mandate

  • B2G: Suppliers to all contracting authorities
  • B2B: No explicit requirements

Receiving Mandate

  • B2G: All contracting authorities
  • B2B: Buyer’s consent required

Digital Signature

Not Required

Archiving Abroad

Allowed under specific conditions

Archiving Period

  • 6 years
  • 13 years for invoices related to real estate investment

E-Invoicing in Finland: The Timeline

E-invoicing has been a significant part of the Finnish business landscape for several years, with a comprehensive development timeline.

  • The 1990s: The concept of e-invoicing first emerged in Finland during the 1990s when banks and other financial institutions began offering electronic payment services to their customers.
  • 2003: In 2003, the Finnish government introduced the first legal framework for e-invoicing, which provided the legal basis for electronic invoicing.
  • 2005: The Finnish State Treasury implemented the first e-invoicing solution for government agencies, enabling them to receive and process electronic invoices.
  • 2009: The Finnish Tax Administration launched a national e-invoicing network known as "Finvoice," which allowed businesses to send and receive e-invoices with each other.
  • 2010: The European Union (EU) introduced a directive on e-invoicing, which encouraged the adoption of e-invoicing across member states. Finland was already ahead of the curve, having a well-established e-invoicing infrastructure.
  • 2014: The Finnish government mandated that all public sector organizations receive electronic invoices by 2016. This requirement accelerated the adoption of e-invoicing in the country, as suppliers needed to send e-invoices to do business with the government.
  • 2016: The Finnish government's mandate deadline for public sector organizations to receive electronic invoices. The mandate was successful, as most organizations had already adopted e-invoicing before the deadline.
  • 2018: Finland implemented Peppol invoicing allowing Finnish businesses to send and receive e-invoices with other EU member states.

2019: The Finnish government announced plans to phase out paper invoicing by 2025. This aligns with the country's overall goal of becoming more digital and reducing its carbon footprint.

How E-Invoicing Works in Finland

Electronic invoicing in Finland is based on the international Peppol standard.

With e-invoicing, businesses can avoid the time-consuming and error-prone process of manually creating and processing paper invoices.

To use e-invoicing in Finland, businesses must sign up for an e-invoicing service provider.

When looking for the best e-invoicing service provider in Finland, you want one that doubles up as a Peppol access point provider.

Unimaze is a certified Peppol service provider in Finland offering a range of services, from e-invoicing to more advanced features such as automated invoice matching and payment processing.

Once signed up, businesses can send e-invoices to their customers, who can receive and process them using their e-invoicing service provider.

One of the advantages of working with Unimaze as your service provider in Finland is the ability to automate invoice processing. That way, you can process your invoices faster and with fewer errors than manual processing.

Additionally, e-invoicing can help Finish businesses reduce their environmental impact by reducing paper usage and transportation costs associated with physical invoices.

Finland e-Invoice Requirements

E-invoices in Finland must show the applicable VAT rate, the amount of VAT charged, and the VAT identification number of both the seller and buyer.

Electronic invoices must be issued in a structured format such as XML, EDI, or PDF and follow a specific layout with mandatory information printed in a certain order.

In addition, the invoice must be sent to the buyer's registered office or designated electronic invoicing platform.

Legal framework for e-invoicing in Finland

In Finland, e-invoicing is governed by the Value Added Tax Act and the Electronic Invoicing and Archiving Act.

According to these laws, an electronic invoice must meet specific requirements to be considered valid, including using a secure electronic format and specific information, such as:

  • The supplier and buyer's details
  • A unique invoice number
  • Date of issuance

Businesses are free to choose their e-invoicing service provider. However, the provider must comply with the requirements set out in the laws.

Furthermore, e-invoices must be stored and archived in an electronic format for at least six years from the end of the fiscal year to which they relate.

The Finnish Tax Administration oversees the implementation of e-invoicing regulations and provides guidelines to businesses to ensure compliance.

Failure to comply with e-invoicing regulations can result in penalties, including fines and criminal liability.

How Unimaze Can Help You Get Started With e-Invoicing in Finland

Unimaze is a trusted service provider and access point for e-invoicing in Finland.

Adopting electronic invoicing through Unimaze is a simple and efficient process.

Businesses can begin booking a free meeting with Unimaze to determine which solution works for them. Once we set up a customized framework, you can send and receive electronic invoices through Unimaze's secure platform.

One of the significant advantages of using Unimaze for e-invoicing is our modern and tailored e-invoicing solutions.

Unimaze has extensive experience in the industry, and our platform caters to the invoicing needs of businesses of all sizes. That way, companies can streamline their invoicing processes and reduce manual errors.

Unimaze's USPs include innovative tools such as the Unimaze Digitizer, an AI-powered tool that enables businesses to scan and digitize paper invoices, making them compatible with their e-invoicing systems.

The Unimaze digitizer's functionality facilitates a smooth transition from paper-based invoicing to e-invoicing without disrupting the existing invoicing processes.

Other solutions include Teams Integration, Unimaze Approval, and the Supplier Portal.

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E-invoicing in Finland - FAQs

Is E-Invoicing Mandatory in Finland?

Yes, e-invoicing is mandatory in Finland for B2B and B2G (business-to-government) transactions. The requirement came into effect on April 1, 2021, and it applies to all companies registered in Finland.

According to the Finnish Tax Administration, the mandatory e-invoicing requirement applies to invoices for goods and services, credit and debit notes, and advance payments.

The provision also applies to cross-border transactions between Finland and other EU member states.

In addition to being mandatory, e-invoicing is also highly encouraged in Finland, as it is a more efficient and environmentally friendly way of processing invoices.

Companies are encouraged to adopt e-invoicing voluntarily as soon as possible, even if they are not legally required.

Do I Need to Charge VAT to Finland?

The need to charge VAT (value-added tax) to Finland depends on various factors, such as the nature of the goods or services you provide, your business's location, and your customer's location.

If registered for VAT in Finland, you must charge VAT on your taxable supplies of goods and services to your Finnish customers unless an exemption applies. The standard VAT rate in Finland is currently 24%, but reduced rates of 14% and 10% may apply to certain goods and services.

If you are not registered for VAT in Finland, you only have to charge VAT on your sales to Finnish customers if required under the special rules for distance sales or the MOSS (Mini One Stop Shop) scheme for digital services.

It is recommended to consult with a tax professional or the Finnish Tax Administration to determine your specific VAT obligations in Finland.

Is Finland in the EU for VAT Purposes?

Yes, Finland is a European Union (EU) member, so it is subject to the EU VAT rules.

This means that businesses in Finland must charge VAT on their taxable supplies at the rates specified in the EU VAT Directive. They must also comply with other EU VAT requirements, such as registering for VAT, submitting VAT returns, and accounting for VAT on cross-border transactions within the EU.

Similarly, businesses from other EU member states must comply with the same VAT rules when trading with Finland.

How does VAT Work in Finland?

In Finland, businesses charge VAT on goods and services they sell and deduct the VAT they pay on purchases.

The standard VAT rate is 24%, with 14% and 10% reduced rates for certain goods and services. Finnish businesses must also comply with specific EU VAT rules for cross-border transactions within the EU.

Is Finland a Tax-Free Country?

No, Finland is not a tax-free country. Like most countries, Finland has a tax system to finance public services and infrastructure.

The main taxes in Finland include income tax, value-added tax (VAT), corporate tax, and various social security contributions.

The Finnish tax system is progressive, meaning those with higher incomes generally pay more tax than those with lower incomes.

While some tax exemptions or deductions may be available, there is no such thing as a tax-free country.

Who Pays VAT in Finland?

In Finland, VAT is paid by the final consumer of goods or services.

Businesses in Finland registered for VAT are required to charge VAT on their taxable supplies, but they can also deduct the VAT they paid on their purchases and expenses (input VAT) from the VAT they have collected on their sales (output VAT).

The tax authorities then pay the net VAT amount in their periodic VAT returns.

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