Regarding reversed tax liability, the seasonal tax declaration has separate sections for both the seller and the buyer.
How does the seller declare the inverted VAT?
In section 319, the seller declares the total amount of the construction services sold under reverse tax liability (the buyer is liable for tax) for the month when payment for the invoice has been received or the invoice for the completed contract has been sent (payment-based or invoice-based procedure in accounting, depending on which procedure is used).
How does the buyer declare the inverted VAT?
The buyer declares in section 320 the total amount of construction services that are subject to reverse tax liability and calculates the tax to be paid on them according to the 25,5% tax rate, and declares it in section 318 for the month when the invoice has been paid or the invoice for the completed contract has been received.
If and when the purchases are deductible (in practice, they are mostly deductible), the buyer calculates the deductible tax according to the 25,5% tax rate and declares them as deductible taxes in section 307 for the month when the corresponding invoice is paid or the invoice for the completed work is received.
Trader and purchases made from foreigners
An entrepreneur who does not himself sell construction services must also declare in sections 320 and 318 and 307 (if the purchase is deductible) the purchases of construction services made from foreigners for real estate located in Finland, for which he, as the buyer, pays tax pursuant to Section 9 of the AVL.
useful links
- Tax administration: reversed VAT liability in the construction industry
- Tax administration: instructions on the application of reverse VAT
- Finlex: Value Added Tax Act