FINLAND: The Finnish Central Board (CBT) of Finland has declared the exchange rates as it has declared the exchanges were ‘providing services’. The commission rates were charged by exchanges therefore that were in accordance with EU VAT Directive, exempt from VAT.
EU Directives, such as the VAT Directive, specify certain goals to be achieved by member states. The member states are granted considerable discretion as to how they will achieve these goals (see Article 288 of the Treaty on the Functioning of the European Union). “EU Regulations,” in contrast, specify both the goals and the means by which States must achieve them.
The EU VAT Directive (Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax) applies to goods and services sold within the EU. Its aim is to harmonize VAT Law among EU Member States. It specifies that VAT rates must be within a certain range within all EU countries, but leaves it up to member states to decide where in the range their rates will fall. Article 135(1) of the VAT Directive grants an exemption for all “financial services”.
In their decision, the CBT concluded that exchanges are providing a financial service and are, therefore, exempt from VAT (per Article 135(1)). Finland’s position can be compared and contrasted with other EU countries.
