The tax authorities in Finland and Estonia, Verohallinto, and the Estonian Tax and Customs Board have now started to exchange real-time VAT transaction data. In particular, this will increase pressure on cross-border traders to review their VAT data and, if necessary, add real-time determination.

The two countries already have a common platform, the X-Road platform, through which income tax information is already exchanged. Future real-time VAT transaction data will also be exchanged through this platform. Above all, this measure is intended to support traders who work between the two states. It is also intended to help tax authorities detect VAT fraud, as it is usually faster than most tracking procedures.

Some EU member states are also consulting on the development of a common transaction reporting system, which could also act as a standard e-invoicing system. In addition, other EU member states have also developed a transaction network analysis tool to help identify fraud. This involves creating links between member states’ tax platforms to share transaction data and reports in real-time. Discrepancies in purchases and sales and other discrepancies between tax return information can be easily detected.

E-invoicing in Finland is not a new topic, as the Finns have been using e-invoicing since the 1990s. In 2010 B2G (Business-to-Government) e-invoicing became mandatory in Finland.

Public administration institutions must be able to receive electronic invoices and companies must send the so-called e-invoices via national standards. The Finns use their own e-Invoicing standards, such as TEAPPSXML and Finvoice, which are both based on the XML standard, which is required by the European Directive 2015/55/EU. Invoices can also be sent to the administration via the PEPPOL network.

Since April 2020, according to Law 241/2019, private companies in Finland can now also insist on the right to receive invoices in electronic form from their suppliers.

The following specifications were made:

• B2B invoices must comply with EN 16931 and Finnish standards
• Recipients can reject all e-invoices that are in PDF format or do not comply with the XML standard
• Older versions of TEAPPSXML and Finvoice are still accepted because of the Corona Pandemic

This means that from 1 April 2020 the Act will allow public administrations and private companies to require electronic invoices from Finnish suppliers. This means that the Finnish invoice recipient can reject electronic invoices that do not comply with the European standard.

As it looks like PEPPOL will not be part of the E-Inviocing standards in the public sector in Finland, but this cannot be excluded yet. In Finland the registrations of private companies in PEPPOL BIS Billing 3.0 are growing, so this could be an indicator for the future introduction of PEPPOL in the public sector.