VAT on LIR sponsorship

FreeTransit LIR sponsorship is invoiced by openfactory nordic oy, a company registered in Finland (VAT number FI32292984). This page covers paid sponsorship of ASN, PI and legacy resources and the transfer fee. Our free IP transit is not invoiced.

This is our current position, based on our own reading of the Finnish VAT Act and the guidance of the Finnish Tax Administration. We have asked our accountant to confirm it. We consider the reasoning sound, but if our accountant or the Tax Administration takes a different view, we will adjust it and tell you.

What sponsorship is for VAT purposes

Sponsorship is administrative work done by people. We review your request and documents, hold the contract with you, file requests and changes with the RIPE NCC, keep the registry records correct, and handle transfers and the RIPE NCC's audits. Audits and change requests come often enough that sponsorship is an ongoing customer service, and none of it can be automated. Anyone who has waited for one of our registration requests has seen that it is handled by hand.

For VAT we therefore treat sponsorship as a professional service supplied by people, similar to a patent or trademark attorney who maintains registrations for clients. It is not an electronically supplied service or a telecommunications service. The portal is only how you reach us.

Which VAT applies

Customers in Finland, private or business, pay Finnish VAT at 25.5%.

Businesses in another EU country with a VAT ID that is valid in the EU's VIES system are invoiced without Finnish VAT under the reverse-charge procedure and account for VAT in their own country. Without a valid VAT ID we have to add Finnish VAT.

Private customers in another EU country pay Finnish VAT at 25.5%. For services to consumers, VAT is due in the country where the seller is established (section 66 of the Finnish VAT Act). The rate of your own country, for example 22% in Italy, applies only to telecommunications, broadcasting and electronic services, and only once a seller's sales of those services to consumers in other EU countries exceed EUR 10,000 a year. Sponsorship is none of these, so the EU One Stop Shop (OSS) does not apply to it.

Customers outside the EU, for example in Switzerland, pay no Finnish VAT. For businesses the place of supply is their own country (section 65). For private customers, consultancy, legal and similar services supplied to someone living outside the EU are not supplied in Finland (section 69 h), and we count sponsorship among them. We may ask businesses for a company registration or tax number. Any VAT due in your own country is your own matter.

The Finnish Tax Administration explains these rules in its guidance on VAT on cross-border services, sections 7.1, 7.11 and 7.12.

When we invoice

We invoice yearly fees in the fourth quarter, in advance for the following calendar year. The 2027 invoices cover sponsorship from 1 January to 31 December 2027. Please keep your billing details and VAT ID up to date in the portal.