Fixed establishment for VAT in Finland: when a foreign company has one

Karma Accounts · Published 28 October 2026

A foreign company has a fixed establishment in Finland for VAT when it has a place of business here, other than its head office, with "a sufficient degree of permanence and a suitable structure in terms of human and technical resources". The test comes from EU Regulation 282/2011. Business services bought for the establishment are generally taxed in Finland. On your sales, what matters is whether it takes part. If not, a Finnish business customer still reports the VAT under the reverse charge in section 9 of the VAT Act (AVL). If it does, that reverse charge stops: you normally register and account for the VAT yourself, unless the sale is exempt or zero-rated or another rule, such as the construction reverse charge, applies.

The definition, as the Regulation states it

The Finnish VAT Act does not define the term; Finland applies the Regulation.

Article 11(1), for services you buy: the establishment must be able "to receive and use the services supplied to it for its own needs".
Article 11(2), for services you sell: it must be able "to provide the services which it supplies".
Article 53(1), for the reverse charge: it must be able "to make the supply of goods or services in which it intervenes". The Tax Administration confirms that a company selling only goods can also have one.
Article 11(3): having a VAT number "shall not in itself be sufficient". Nor does registering for VAT create one.

What the Tax Administration looks at

People. One person taking part in the business here can be enough; not every task has to be done in Finland. Leased workers count if under your company's control.
Technical resources. Premises, IT, software, servers, machines. They alone are not a fixed establishment. A highly automated set-up can still be one if staff in Finland maintain or supervise it.
Permanence. A particular location, not necessarily fixed to the ground: selling transport services in Finland on a set schedule and route is enough. The activity must be regular, not necessarily continuous.

Clear-cut examples from the Tax Administration's guidance:

A salesperson in Finland. A French company with one salesperson covering the Uusimaa region has a fixed establishment.
Staff at a customer's premises. A Swedish IT company with four employees giving on-site support under a four-year contract has one.
Your own warehouse with staff. An Estonian company whose two employees receive, check and sell goods at its Finnish warehouse and wholesale shop has one.
Construction or installation work lasting more than nine months, as one project or several in a row, in tax practice. The establishment exists from the start, not only once nine months have passed. Nine months is not a safe harbour: a shorter project can also create one.

These do not create one by themselves:

third-party warehouse or logistics storage, or consignment stock at a reseller, with no staff of your own here
an office used only for preparatory or auxiliary work, such as recruiting people to work abroad
renting out property or equipment, or licensing intellectual property
a VAT number on its own.

A branch entered in the Trade Register is assessed by the same tests; the entry alone creates no duty to register. Moving your own goods from another EU country into stock in Finland is an intra-Community acquisition and usually needs a registration anyway, call-off stock excepted.

When the establishment takes part in a sale

Under Article 53(2), an establishment takes part only if its people and technical resources are used "for transactions inherent in the fulfilment" of a supply made in Finland, before or during that supply.

Selling counts: making the offer, negotiating, signing. General marketing not clearly linked to actual or failed sales in Finland does not.
Doing the work counts, even if only part of it is done in Finland.
Administrative support does not: accounting, invoicing, debt collection, recruitment.
Your Finnish VAT number on the invoice creates a presumption that the establishment took part, "unless there is proof to the contrary".
In an intra-Community supply, the establishment does not take part. That is the case when the buyer's VAT number is used and the goods travel from another EU country straight to the buyer in Finland.

What changes once you have one

Services you buy. A business service supplied to your Finnish establishment is taxed in Finland (AVL 65 §). The supplier looks at the nature and use of the service, then the contract, order form, VAT number given and who pays. From a foreign supplier, your company usually reports the VAT under the reverse charge.
Your sales to Finnish businesses. Sales your establishment does not take part in stay under the reverse charge (AVL 9 § paragraph 4). For sales it takes part in, you account for any VAT due, though the construction reverse charge (AVL 8 c §) still applies where its conditions are met.
Sales where you are liable anyway. Under section 9 the seller is always liable for sales to private individuals, passenger transport, event admission in Finland, and (construction excepted) sales to foreign businesses with no Finnish establishment or VAT registration. A voluntary registration also ends the reverse charge.
Registration. If the establishment takes part in taxable sales in Finland, you must register. See VAT registration in Finland for a foreign company. An EU company using the EU SME scheme need not register while its turnover stays within the scheme's limits.
Invoices and returns. Once registered, you file Finnish VAT returns and deduct input VAT there. A reverse-charge invoice says "käännetty verovelvollisuus" (reverse charge) and shows no VAT amount or rate.
Refunds. The separate refund procedure (AVL 122 §) is only for businesses with no Finnish establishment carrying out transactions and no Finnish sales other than reverse-charged ones or certain exempt transport. See Finnish VAT refund for a foreign business.

Worked example: one company, two sales

A German GmbH, registered for VAT in Finland, has a Helsinki office with two employees who find and serve Finnish clients. Both clients below are Finnish companies buying an ordinary business service for their business in Finland.

Sale	Who took part	VAT treatment
A: 40 000 euro consulting project, negotiated and delivered by the Helsinki team	Finnish establishment	GmbH charges 25.5 % VAT: 10 200 euros, invoice total 50 200 euros
B: 10 000 euro support contract for a company in Oulu, agreed and delivered from Germany, invoiced under the German VAT number	head office only	reverse charge: the client reports 2 550 euros and deducts it if it is entitled to

The GmbH pays the VAT on Sale A through its Finnish VAT return. Sale B is just as taxable in Finland, but the client accounts for the VAT. Had the Helsinki staff negotiated Sale B, or had the invoice carried the Finnish VAT number (absent proof to the contrary), the GmbH would have charged the VAT itself.

VAT fixed establishment vs income-tax permanent establishment

The Tax Administration says the two are assessed separately; one does not directly create the other.

Question	VAT fixed establishment	Income-tax permanent establishment
Where the rule is	Regulation 282/2011, Articles 11 and 53	Income Tax Act 13 a § and tax treaties
Core test	permanence plus suitable staff and technical resources	fixed place of business, or a dependent agent who regularly concludes contracts
Construction	over 9 months in tax practice; shorter can also count	over the treaty limit, 12 months in the OECD Model
Consequence	registration and VAT on taxable sales it takes part in	Finnish tax on profit attributable to it

A company can have one without the other.

Borderline cases

Many real cases are less clear than the examples: a single remote employee, a contractor working under your direction, a Finnish group company whose staff work for the foreign company, a project close to nine months. They turn on the facts, and the guidance does not settle them all. For a case that matters, you can apply for a binding advance ruling (AVL 190 §).

How Karma helps

We help foreign companies work out their Finnish VAT position, then handle the registration and file the returns. When the fixed-establishment question is genuinely borderline, we say so: a tax adviser's opinion or an advance ruling may be the next step. See Finnish VAT services for foreign companies, or our partner service if you are a VAT firm with clients in Finland. Work is quoted case by case: request a quote.

Frequently asked questions

What is a fixed establishment for VAT in Finland?

A place of business other than your head office with sufficient permanence and suitable human and technical resources (Regulation 282/2011, Articles 11 and 53). One employee can be enough; a VAT number alone is not.

Does a foreign company with a fixed establishment charge Finnish VAT on all its sales in Finland?

Not necessarily. On sales to Finnish businesses, the establishment's part decides who accounts for the VAT: you if it takes part, otherwise the customer, unless you registered voluntarily. You are liable anyway for consumer sales, passenger transport and event admission. Exempt sales and the construction reverse charge follow their own rules. A Finnish VAT number on your invoice creates a presumption that the establishment took part.

Does a warehouse in Finland create a fixed establishment?

Not automatically. Third-party storage does not create one by itself. In the Tax Administration's example, a company's own warehouse and shop, with staff who receive, check and sell the goods, does.

Is a fixed establishment the same as a permanent establishment?

No. The permanent establishment is an income-tax concept with its own tests in the Income Tax Act and tax treaties.

Sources

Please note: this is general information about Finnish rules, not advice for your own situation, and the rules change. Ask us before you act on it.

Finnish VAT for a foreign company?

We register foreign companies for VAT in Finland and file their VAT returns and EC Sales Lists, quoted per scope. See Finnish VAT services for foreign companies. For VAT firms and accounting firms: working with us as a Finnish VAT partner.

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