Private service providers may sell their services to persons in need of social services without charging valued added tax (VAT). Nevertheless, it is required that the activities are controlled by social service authorities. Clients may be in need of services because of restrictions in their functional capacity, or other private reasons causing them problems in coping with their daily lives.
According to the Finnish tax administration, social welfare refers to activities such as private care of children and teenagers, early childhood education (e.g. day care centre activity or family day care), care of elderly people, care of disabled people, other services and support for the disabled, services for substance abusers and other similar activities.
The municipality maintains a register of the services provided. Support services for home care and private day care services are to be included in the municipal register.
All other services are registered by the AVI or Valvira, respectively. Also for these services, the municipality must make a statement of the services. The municipality will also supervise private services provided in its area.
Do the following
The service may be sold without VAT only when the private service provider has filed in a registration notice of the services in the municipality where the provider wishes to conduct its business.
To whom and on what terms
In order to be able to produce social services not subject to VAT, the service provider has to:
- File in a registration notice at the municipality (use the Regional State Administrative Agency (AVI) form with the needed attachments).
- Compile a self-monitoring plan, that is, a detailed prescription of the activities and their quality; use the Finnish National Supervisory Authority for Welfare and Health (Valvira) form and attach it to the registration notice. Please note that the form is available in Finnish and Swedish only.
- Compile a service plan with the client.
- Sign a contract of service with the client.