Change in VAT rates as of 1 July 2010

The VAT rates will rise by one percent on 1 July 2010. The standard rate rises to 23 %. The reduced rates are 13 % and 9 %. The VAT rate on restaurant and catering services will drop to 13 %.

The new rates are applied when the goods are delivered or service is performed on 1 July 2010 or later. An exception is advance payments. If the advance payment has accrued to the supplier by 30 June 2010, the former rate is applied.

The interest of the size of a base rate is used in the taxation in the following situations:

1. The interest of the size of a base rate must be collected

- from shareholder loan which has not been read according to the 53a § of the Income Tax Act as the income from capital of the natural person a shareholder.

- from employee loan (the Income Tax Act 67 §). As a taxable earned income a interest benefit is considered in so far as the annual interest that has been charged for the loan is lower than a base rate on the basis of the employment from the received loan.

2. That part of the interests which correspond to the rest of the negative own capital which has been created due to the private takings that have been raised from a private business, profession or source of livelihood combination told with the percentage of interest the size of which is a base rate added with one percentage point (a law from the taxing of the business income 18 § the 2 paragraph) is not considered caused by the business activity. 

Delay interests 

The size of the delay interest is 7% in 2010. Due to delays in self-initiated tax payments (e.g. VAT and employer's payments) the calculated additional tax is also 7% in 2010. 

The delay consequences must be paid to a self-initiated tax to be performed after the adjusted date of payment. The additional tax also is charged in connection with the correction of the taxation which is based on the neglect of the additional taxation and of the informing duty. The delay interest and additional tax are always at least three Euros. They are not deductible in the taxation. The ‘viivekorkolaskuri’ in tax.fi pages helps in the calculation of the amount of the delay interest and of the additional tax. (Note that the calculator is in Finnish.)  

Tax-free allowances for travel expenses and fringe benefits in 2010 

Tax administration has confirmed the rates for the year 2010. The mileage allowance in 2010 is 0.45 cents per km. Domestic full amount allowance in 2010 is 36.00 Euros and partial amount is 16.00 Euros. For more information on allowances, please contact our personnel. 

The value of an employer-provided phone is also €20.00 per month in 2010. The Employer-provided vehicles values have changed.

During 1 January 2010 to 30 June 2010, employer-provided meals are valued at 5.70 Euros per meal if the employer’s direct costs including VAT for providing this benefit are at least 5.70 Euros but not more than 9.50 Euros.  If direct costs including VAT are less than 5.70 Euros or more than 9.50 Euros, the valuation of this benefit will be based on actual costs including VAT.

During 1 July 2010 to 31 December 2010, employer-provided meals are valued at 5.30 Euros per meal if the employer’s direct costs including VAT for providing this benefit are at least 5.30 Euros but not more than 8.80 Euros.  If direct costs including VAT are less than 5.30 Euros or more than 8.80 Euros, the valuation of this benefit will be based on actual costs including VAT.