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Change in the Finnish standard VAT rate on Sep 1, 2024

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What is happening?

The standard value-added tax rate in Finland will increase from 24 percent to 25.5 percent starting from 1.9.2024. The Parliament has approved the change, but the law has not been confirmed yet. More information: eduskunta.fi

 

What does the Tax Administration advise on the subject?

The value-added tax rate is determined based on whether the service is provided or the goods are delivered to the customer before or after September 1st. More information: vero.fi

 

Where can I get advice on financial management questions?

Guidelines from Taloushallintoliitto (Finnish finance association) have been gathered, among other sources, in this Tilisanomat article.

 

How to prepare for the change in Heeros programs?

Heeros has added support for the 25.5% VAT rate with decimals to applications and standard sales invoice layout. After that, customers will need to take some actions, such as adjusting settings and updating VAT codes/percentages in their Heeros programs. Needed actions can be found in the latest Service release.
Customers also need to check which integrations are used from Heeros to other programs and whether the VAT information there moves as a code or as a percentage.

 

Why is the technical support not ready? 

The change in VAT rate will take effect very quickly. The percentage with decimals has caused software companies to have to conduct investigations and updates during the summer holiday season for their own programs as well as integrations created with partners.

 

When can I start invoicing at 25.5 percent?

Support for VAT rate with decimals has been completed for standard sales invoice layouts, Heeros Sales Invoices, and Heeros Accounting. If a customized invoice layout is in use, the support may not yet be ready.
The customer needs to adjust the VAT codes/rates in use so that there are consistent VAT settings for data transfer between all sales invoice processing programs. After this, it is possible to invoice with the new VAT rate. We recommend first trying with one invoice to ensure everything works correctly before extensive mass invoicing.

 

Does the new VAT rate show correctly on the sales invoice image?

We have made a change to the standard sales invoice layout in collaboration with the operator. Some of our customers have a customized invoice layout, and we have been in contact with these customers separately. The update for these customized invoices will be completed by August 31st.

 

Are there still old VAT rates showing in account names after the change?

When the change is made only behind the VAT code, the old VAT percentage will remain visible in the account names for the time being. (However, the updated VAT percentage will be correctly applied to invoices and accounting entries.) The chart of accounts can be updated for names, for example, when changing to the next financial year.
If the account names need to be updated immediately, the chart of accounts can be updated using an Excel import.

 

How do I proceed if VAT codes are not used in Sales and Purchase Invoices?

If percentages are used instead of VAT codes, then:

  • Product register and chart of accounts for sales invoices
  • Chart of accounts for purchase invoices

need to be updated, for example, via Excel import. Please note! Currently, there is a rounding error in the excel import of the chart of accounts for purchase invoices, so its use is estimated to be possible around mid-August. However, information can already be updated on an account-by-account basis.

 

How are VAT rates separated on reports?

There will be no changes to the reports at this point. Some reports (e.g. sales invoice report) show different VAT rates for the same account, while others do not (e.g. purchase invoice report.

 

Does it matter what number/code is used to create new 24% VAT codes?

When both the old and new VAT rates are needed simultaneously in Sales Invoices and/or Purchase Invoices, a new VAT code must be created for the old 24% rate. The number/code for the new VAT code can be chosen freely, as long as you ensure that the same VAT code exists or is created in Heeros Accounting, and that this VAT code is not already in use for another purpose. Note! If common VAT codes are in use in Heeros Accounting, the new VAT code has to be created to the model company.

 

Why do we need to change the percentage behind the VAT code?

Heeros Accounting already had a feature that allows you to define a new percentage for a VAT code based on the date. Therefore, when the percentage is changed behind existing VAT codes in other applications as well, there is no need to separately update their charts of accounts or the product register in Sales Invoices.

 

Why do we have to create new VAT codes manually?

Since the applicable VAT rate is determined by the time of service or delivery, or other criteria as instructed by the tax authorities, we cannot decide on behalf of our customers which VAT rate should be used at any given time.

 

Our sales invoices are sent from another program directly to OpenText. Does our invoicing work with the new VAT rate?

If you send your sales invoice data to OpenText from somewhere other than Heeros directly via Webtransfer / SFTP / WebService / AS2 and the invoice message format used is other than Finvoice or TEAPPSXML, it is recommended to create a new invoice message sample based on the 25,5% VAT rate and request message testing from Heeros application support. The testing will be charged from you, but it is recommended as it ensures that your sales invoicing works flawlessly even after the change.

 

Basic instructions/Sales Invoices

  • The old VAT code of 24% will be used for the note date in August
  • For invoices dated 1 September or later, the old VAT code will be replaced by the new percentage 25.5
  • When the new percentage is changed behind the old code, a new VAT code 24% is created for VAT at 24%.
  • If an invoice is to be issued for the note date in August with a new percentage, the old code with the percentage changed to 25,5 will be used. In this case, the VAT must be corrected in the accounting, because the VAT code for the note date will be replaced by 24%.

Invoice import to Sales Invoices

Changes to the VAT codes must be made to both the sales invoices and the system in which the data is generated, so that the VAT settings are the same in both. It may also be necessary to update the Sales Invoice Product Register.

  • If the import file contains only the product code, the VAT percentage is retrieved from the invoice behind the product code. In this case, the product register must be updated with the VAT percentages required on the invoices.
  • If the import data also includes the VAT information, this is transferred to the invoice as such, in which case no update of the product register is required.

 

Basic instructions/Purchase Invoices

  • Use the old VAT code of 24%  for the invoices with note date in August
  • For invoices dated 1 September or later, change the percentage in the old VAT code to 25.5
  • When the new percentage is changed behind the old code, create a new VAT code 24%  for VAT at 24%.
  • If you receive an invoice with the new percentage on the actual date in August, it is advisable to move the actual date of the invoice to September. If this is not possible, the old code with the percentage changed to 25.5 will be used. The VAT must then be corrected on the accounting side, as the VAT code will be replaced by the actual date with a percentage of 24.
  • If there are two VAT rates on the same invoice in September, the 25.5% purchases will be recorded with the old general VAT position code and the 24% purchases with the new code. The invoice will be correctly entered in the accounts if the VAT codes are the same in both applications and the date is after 1 September.

 

What to do when there is still 24% on the invoice row even though there is 25,5 behind the VAT code?

If the new percentage has been updated behind the VAT code, but when editing the invoice, the old percentage is still displayed behind the product on the invoice line, you should update the product register. If the product has the desired VAT code behind it, it is sufficient to export the product register to excel and import it again as it is into Sales Invoices, so that the VAT code behind the product remains the same but the VAT percentage is updated to the new one.

 

Why does VAT calculation say "check the transactions in the account for the selected period, the VAT code used in the account is different from the one defined in the chart of accounts"?

 

As invoices can now have a new or old VAT rate, transactions will use the corresponding VAT code, i.e. not necessarily the VAT code that is defined by default behind the account. In this case the program will point this out, so that you can still check that the transactions in the accounts mentioned are recorded with the desired VAT code. Despite the warning, the VAT declaration can be continued as normal by pressing the Continue button.

 

Why is an entry not shown on VAT report when a new VAT code has been used?

If you have created a new VAT code with the date added in the Start date field, the VAT code will not work. The Start date field is only used if a new % is also added to the VAT code.

Why hasn't the percent of the vat code for margin tax been updated?

The vat percent has not been updated, because the vat codes for margin tax don't have the New% field. The vat percent has to be updated manually.

 

Will the new VAT percentages be updated in the names of the accounts in the charts of accounts?

Yes, the next Accounting version update will change the percentages in account names to 24% --> 25.5%.

 

When will the new VAT percentage be updated on the VAT calculation?

The new VAT percentage will be updated on the VAT calculation in the next Accounting version update. Please follow the release notes.

 

 

 

 



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