Value-added tax
Value added tax (VAT) is a consumption tax that the seller of goods or services must add to the price. Sellers collect VAT from their customers and pay it on to the State. Liability to pay VAT concerns anyone who sells goods, services, rents out goods, or is engaged in similar operations in the conduct of business. Similarly, the primary production activity of farmers and forest owners is VAT liable. VAT must be collected from the buyer each time a good or service is sold. Sellers add the VAT to the price they charge for goods or services. Then they pay the VAT they receive to the Tax Administration. The VAT included in the price of goods and services is deductible for a VAT taxpayer who buys it for the purpose of taxable business. This requires that both the buyer and the seller are VAT taxpayers. Ultimately, the consumers pay the VAT; and the final price that they pay only contains a single debiting of VAT. VAT rates on goods and servicesAn entepreneour does not need to pay it from his/her own account but VAT is added to the selling price. The entepreneour just transmits the tax from a customer to the government. In Finland, the price label already includes VAT but in some countries prices in labels are without VAT, for example in USA, and it is calculated when paid.Finnish Tax Administration (2017)
24% the general rate: most goods and services 14% a reduced rate: food, animal feed, restaurant and catering services 10% a reduced rate: books, pharmaceutical products, physical exercise services, film showings, entrance to cultural and entertainment events, passenger transport services, accommodation services, operations relating to TV and public broadcasting against a fee