FAQ: The VAT rate increase to 25,5% on September 1st 2024

What is taking place? 

On the 1st of September, Finland will implement an increase in its Value Added Tax (VAT) rates. The standard VAT rate will rise from 24% to 25,5%.
The reduced VAT rates will remain unchanged at 14% & 10% .

Will the 24% rate be removed after September 1st?
No, the 24% rate will remain available.


How will this be managed in Briox?

This will be managed automatically in Briox.
The invoice date will decide if the VAT rate is 24% or 25,5%.
Both rates will be posted to the same account and reported in box 301 of the VAT report for customer invoices (sales).
For supplier invoices (purchases), the new rate och 25,5% will also be reported on the same accounts alongside the old VAT rate, and reported in Boxes 304, 305, 306, 307 and 318 of the VAT report.

We will inform users when the functionality is released; the preliminary release date is August 20th.


What do I need to do?

The only thing you, as a user, will need to do after September 1st , is change the name of the account you use if you do not want it to have 24% in its name any longer.
Please note that the name of the account does not affect the VAT rate as both rates will be posted to the same account during the transition period.
Read how to change the name of your account here, in the section called Account settings.
After we have released the functionality for managing the VAT increase, all accounts created using any Briox standard Chart of Accounts will automatically have accounts with 25,5% in their account name.

What happens on September 1st?

When you create an invoice or post a journal with a date on or after September 1st, you will automatically get the new VAT rate of 25,5% when selecting the standard VAT.

I am using both a posting date and an invoice date, how does this work?

It is always the invoice date that will be taken into account when the VAT rate is to be determined.

Read more about enabling an extra date field. 

SUPPLIER INVOICES 

I have set VAT rates on my suppliers in the registry. What happens to them?

As in the rest of the program, if you have set a VAT rate of 24% on your supplier in the registry, the VAT rate will be automatically updated to reflect the change taking place on September 1st.

How can I have an invoicing date in September and have a 24% VAT Rate on my supplier invoice?

How can I have an invoicing date in September and both 24% and 25,5% VAT on one invoice?

In both cases you must select the option Multiple VAT rates in the VAT drop down menu in the invoice header.
This will allow you to freely code in the accounting grid.
Use a template to automatically calculate your 24% VAT in the supplier invoice. These are easily created by copying existing ones.

CUSTOMER INVOICES

How can I have an invoicing date in September and have a 24% VAT Rate on my customer invoice?

How can I have an invoicing date in September and both 24% and 25,5% VAT on one invoice?

In both cases, you need to set up a specific account for your 24% VAT rate.

1. Create a sales account in your chart of accounts.This is easily done by copying your standard sales account.
   
   
2. Choose the VAT code and Save.
   • MP_STANDARD_TEMP for domestic sales VAT 24%

• MPT_STANDARD_TEMP for Tax border sales VAT 24%
  For the tax border report to work please mark the account with Goods. See below.
  
  

3. The VAT will automatically default to your standard VAT accounts.
   If you wish to post your VAT to other accounts, please select which in the default accounts. Go to Registry - Chart of Accounts - Default accounts and update the accounts marked in red below. The Tax Border account is only visible if the functionality is active.
   
   
4. When you create your customer invoice you will need to choose your new account on the item row of the invoice.
   
   
   
   Note: You can only choose a different VAT account for the item in the desktop platform.

What Happens if the invoice is posted in August but paid in September for the Cash Method of Accounting?

It is the invoice date that sets the posting date unless the extra date field is activated.
When the invoice is posted, the VAT gets sent to holding accounts so that the invoice can be locked and the due date set.
When the invoice is paid, the VAT is moved back to the VAT accounts so that it can be picked up by the VAT report.
For Example, an invoice posted and sent to a domestic customer in August and paid in September will have 24% VAT reported in September in Box 301 of the VAT report.
Read more about the cash method of accounting in Briox.

Read more about the change on Tax Administration page: https://vero.fi/en/businesses-and-corporations/taxes-and-charges/vat/rates-of-vat/new-vat-rate-from-1-september-2024--instructions-for-vat-reporting/