When do light entrepreneurships give rise to VAT?

If you receive trade income from your invoicing service company for more than €20,000 during the 2025 calendar year, you become liable to pay VAT, value-added tax. You must submit an application for VAT registration in MyTax or through our other service contact channels for taxpayers. Previously, up to 31 December 2024, VAT registration was required at €15,000. 

• When the Tax Administration processes your application, a Business ID is issued to you unless you already have one.
• If you already have a Business ID, your application for VAT registration is more straightforward: you simply have to make some changes to your business registration in MyTax.

How to apply for VAT registration

When you begin working under an arrangement where an invoicing service company pays you, you must keep an eye on how much money you are getting and if the VAT registration threshold of €20,000 is reached, you must apply for registration.  The date when the threshold is reached is the start date of your obligation to pay VAT.

Are you receiving trade income or wages?

If the money you get from your invoicing service company is classified as wages, you have no VAT liability. Accordingly, the need for VAT registration and VAT payments is linked to trade income only.

We recommend that you re-read the contract you signed with the invoicing service to check whether the amounts paid to you are classified as wages, or whether they are classified as trade income (työkorvaus) instead.

File and pay the VAT

• After you have become registered for VAT, you must begin to file and pay VAT for every tax period. You are expected to submit VAT returns in order to inform the tax office of the amount of VAT on all your sales of goods and services in Finland.
• By virtue of your VAT registration, you are entitled to deduct the VAT that has been included in the price of the work-related goods and services you buy. You must send a VAT return for each tax period — even if you had been inactive, i.e. with no VAT activities during the period.

This is how you need to report and pay VAT

The threshold of €20,000 also concerns entrepreneurs who begin during an ongoing calendar year 

Even if you begin your work mid-year, with an invoicing company paying you for your services performed for customers, the VAT registration threshold is still €20,000. 

Example: You begin your work 1 July 2025. You have an invoicing service company that manages your billing. During 1 July — 31 December 2025, you receive €16,000 of trade income. There is no need for a VAT registration in 2025, because you stay below the threshold for small-scale business activity. In 2026, you will need to keep an eye on the growth of your sales. You would need to take the initiative to apply for VAT registration in time, before the 20,000-euro threshold is exceeded. 

Read more about VAT for small business (in Finnish and Swedish)

Remember to file an income-tax return for business operators and self-employed persons

After you have reached the threshold for VAT registration and become a self-employed person operating a trade/business, you must comply with several new obligations. You must keep books. When the year is over, you must submit a “business tax return”. The deadline for the return is during the spring season following the tax year. If you get your registration mid-year, you must enter any amounts paid to you as trade income as business income on your tax return, if you received amounts of money before your registration. 

See our guide for starting up business and handling its taxes

Frequently asked questions