Termination of VAT-liable activities
If you terminate your business entirely, submit a notification of termination on the Business Information System website (ytj.fi). You only need to submit a single notification to have your company removed from the VAT register, the prepayment register and the register of employers.
File the notification of termination for your company type (ytj.fi)
If your company will still conduct some business, but you terminate its VAT-liable activities, you can request removal from the VAT register in MyTax.
Submit the request in MyTax (On the Tax matters tab, select Registrations and authorisations and click Making changes to information in VAT register, prepayment register and register of employers)
In addition, if you are self-employed or an operator of agriculture or forestry, you can inform the Tax Administration of a complete termination of your activities in MyTax. However, if your company is on the Trade Register, you must submit the notification of termination to the Business Information System instead.
After your company is removed from the VAT register, the Tax Administration will send you a written decision, which indicates that the company is no longer registered for VAT. After this, you cannot add VAT to your invoices or claim VAT deductions.
When am I expected to submit the notification?
You can submit your termination notice as soon as you know that your activities subject to value-added taxes will be ending.
After your termination notice has arrived, we de-register your company and send you a message confirming that your company is no longer registered for VAT. Please note that you must submit a VAT return for the final month when the activities are wound up. You can indicate that the last day of a calendar month is the end date of activities.
Example: Your company’s tax period is the calendar month. If you no longer conduct a VAT-liable business in June, enter 31 May as the end date of activities. If you enter 1 June as the end date, you have to submit a VAT return for June.
Alternatively, you can wait until your company’s business assets are sold. After that, you will be able to submit a final VAT return. In this case, the authorities will consider that you kept conducting the VAT business during the period when you were selling the assets.
If your company had applied for VAT registration voluntarily, the Tax Administration will remove you from the register as of the date when the notice of termination is received, not earlier. In other words, companies that had submitted their application for VAT registration on a voluntary basis are not removed from the VAT register retroactively.
If your company’s VAT registration has been connected to your activities relating to transfer of use of real estate, the Tax Administration will not remove you from the VAT register until the circumstances that made you liable for VAT are no longer present in any of your rented-out units.
If your VAT registration has been for a VAT taxpayer group, the Tax Administration will remove it from the register as of the date when the Tax Administration receives a notice of termination submitted jointly by the members of the group.
Remember to submit the final VAT returns on time
Remember to file a VAT return also for the last tax period, i.e. the one within which the end date of VAT registration falls, even if there were no activities anymore. The tax period agreed for your company has an impact on the final VAT return’s deadline and on the due date of the final VAT payment.
If your company’s tax period is the calendar month or the calendar quarter, submit the VAT return and pay the VAT no later than on the 12th day of the second month following the last tax period.
Example: Your company’s tax period is the calendar month. The company terminates its operation of business in February. Submit your VAT return and pay the VAT by 12 April.
Example: Your company’s tax period is the quarter (January-March). The company terminates its operation of business in February. Submit your VAT return and pay the VAT by 12 May.
If your company’s tax period is the calendar year and you terminate business midway through the year, the tax period’s end date is the date of termination of business: submit the VAT return and pay the VAT no later than on the 12th day of the second month following the calendar month of the termination date.
Example: Your company’s business operation ends on 15 December:
submit your final VAT return and pay the VAT by 12 February.
Note: If VAT registration stays in force up to 31 December: submit the return and pay the VAT by end of February of the year that follows the tax period.
More information on terminating a business and on closing down a business temporarily
File VAT on final inventory
If some of your company’s inventory goods remain unsold to customers at the time of termination, calculate VAT for the final inventory in the same way as you would calculate VAT for own-use goods. Include the resulting amount of VAT in the VAT return that you file for your final month. When you calculate the value of your final inventory, include all the goods and services that remain when VAT liability ends.
If your company had invested in the construction of new buildings or improvements, adjustment to the values may be necessary in order to arrive at the amount of VAT to be deducted at termination.
Example: Your VAT liable operations ended on 31 March 2022. You keep a tractor for private use. The tractor’s purchase price was €50,000, including VAT. In your company’s accounting, the tractor’s remaining undepreciated value is €8,000. The tractor’s probable selling price, i.e. its fair market value, is €12,400 (which includes €2,400 of VAT).
In VAT assessment, the base of the VAT on a physical good is the purchase price or the good’s probable selling price, whichever is lower. In this case, the probable selling price is lower than the purchase price. For this reason, you must calculate the VAT on the probable selling price excluding VAT (€12,400 – €2,400 = €10,000). As a result, you must pay €2,400 of VAT for keeping the tractor. You must include this amount on the VAT return for your final VAT period (March 2022).
How bankruptcy affects VAT liability
If your company goes bankrupt, its assets and debts are transferred to the possession of a bankruptcy estate. After that, the estate can choose to either continue the VAT liability of the company until its assets have been sold or end the VAT liability as of the date when bankruptcy was declared. Alternatively, the estate can carry on with the company’s business and submit an application for VAT registration as an independent party that continues the activities of a bankrupt company.
You and the administrator of your company’s bankruptcy estate are responsible for fulfilling your bankrupt company’s reporting obligations. The reports to submit include the company’s VAT returns and, if your company had sold goods and services to other EU countries, the VAT recapitulative statements.
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