Attention Shopify Merchants!
We wanted to inform you about an upcoming change in the Finnish VAT rates that might affect your business operations. As a VAT compliance company, we at EAS EU & UK Compliance are here to help you navigate these changes smoothly.
Key Dates and Changes
- Effective Date: The new VAT rates will come into effect on 1st of September 2024.
- Actual Changes:
- The standard VAT rate will change from 24% to 25.5%.
We hope the oddness of half a percentage won't cause any issues with your accounting services.
Impact on Your Shopify Store
We understand that managing VAT rates can be complex. Shopify is expected to update the VAT rates automatically before the effective date. However, we recommend keeping an eye on your settings to ensure everything is correctly updated. This proactive step will help you avoid any disruptions in your sales process.
EAS Customers
EAS automatically updates EU VAT reporting by incorporating the latest VAT rates, including the new Finnish VAT rate.
Adjusting Your Pricing
If you want to adjust your pricing for Finland in response to the VAT change, you can do so by increasing your "market-specific pricing." Here are the steps to follow:
- Log in to your Shopify Admin.
- Go to Settings > Markets.
- Select Finland from the list of markets.
- Click on Edit next to Pricing.
- Adjust your prices accordingly to reflect the new VAT rate.
Key Points on VAT Rate Application
- Goods Delivery Timing: The applicable VAT rate is determined by the delivery date of the goods. If goods are delivered to the buyer by August 31, 2024, the 24% rate applies, even if payment is made in September. For goods delivered on or after September 1, 2024, the 25.5% rate applies.
Example: If a customer orders a t-shirt in August 2024 and it is delivered in September 2024, the applicable VAT rate is 25.5%, regardless of when the order was placed or the contract was signed.
- Advance Payments: VAT on advance payments is based on the rate in effect when the payment is received. If the advance payment is received before September 1, 2024, the 24% rate applies.
Example: If a customer orders a toy in August 2024 and pays for it fully before September 1, 2024, the applicable VAT rate is 24%, even if the toy is delivered in September 2024.
- Instalment Sales: For goods sold on instalment plans, VAT liability arises when the goods are delivered.
Example: If a computer is sold on an instalment plan and delivered in August 2024, the entire sale is subject to the 24% rate, even if payments are made later.
- Service Provision Timing: VAT for services is applied based on when the service is performed. If a service is ongoing when the VAT rate changes, the rate at the completion time applies.
Example: If a online training is performed on August 30, 2024, but invoiced in September 2024, the applicable VAT rate is 24%.
Need Assistance?
If you have any questions or need further assistance with VAT compliance, please don't hesitate to reach out to us at support@easproject.com. Our team of experts is here to support you.
Stay compliant and keep your business running smoothly!
Best regards,
The EAS Team
