When you log in to MyTax on 1 June or thereafter, your tax-related letters will change from paper to electronic form automatically. Read more about the changes.
The liability for paying VAT and registration for VAT
If your company sells goods or services in the conduct of business, it is usually liable to pay VAT. The liability to pay VAT does not depend on the company form.
The company’s liability to pay VAT
The company is liable to pay VAT and it has to be entered in the VAT register if its turnover exceeds €20,000 in a calendar year.
In some circumstances, the company can register for VAT voluntarily, for example if it is engaged in small business where the turnover is no more than €20,000 in a calendar year.
Under the Value Added Tax Act, certain lines of business, such as financial and insurance services, are exempted from VAT. A company engaged in VAT-exempt business cannot be entered in the VAT register. Read more about VAT-exempt business.
In some circumstances, a company must register for VAT even through its business operations are not otherwise subject to VAT. For example, intra-Community acquisition of goods from another EU country may require registration.
Read more about business operations requiring registration
The turnover threshold for small business is €20,000
A company does not need to register for VAT if its turnover in both the current and the preceding calendar year is no more than €20,000. In other words, the turnover in either year may not exceed €20,000.
The turnover is calculated for a calendar year, even if the company in engaged in business only part of the year or if the accounting period is more than 12 months.
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Example: A company starts conducting business in the middle of the year, and its first accounting period is from 1 July to 31 December 2025. The company’s turnover is €16,000 in 2025, so the company does not need to register for VAT.
If the company’s accounting period is more than 12 months, only the part of turnover allocated to the calendar year is included in the calculation.
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If the company’s accounting period (12 months) is not a calendar year, the turnover for a calendar year is calculated by combining turnover figures of different accounting periods to reflect the turnover of the calendar year.
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Example: The company’s accounting period is from 1 July to 30 June. To calculate the turnover for 2025, only the part of turnover generated between 1 January and 31 Decmber 2025 in accounting periods
- 1 July 2024 to 30 June 2025 and
- 1 July 2025 to 30 June 2026
is included in the calculation.
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Turnover includes the following sales of goods and services:
- sales subject to VAT (excl. VAT)
- certain VAT-exempt sales, such as:
- intra-Community supply
- export sales
- financial and insurance services
- property rental.
The following sales are not included in the turnover:
- sale of the company’s fixed assets (e.g. an excavator used by an excavation company)
- some add-on sales relating to financial and insurance services
most VAT-exempt sales, such as- VAT-exempt performance fees
- health and medical services
- social services.
Read more: VAT exemption for small businesses (detailed guidance, chapter 2.2)
A company must actively monitor its turnover. If the turnover exceeds the threshold for small business, i.e. €20,000, during a calendar year, the company must register for VAT starting from the date when the turnover exceeds the threshold. The liability to pay VAT starts at the same time. In other words, the company should register for VAT in good time in order that it would be in the register when the turnover exceeds the threshold.
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Example: A company’s turnover was €13,000 in 2024. The company estimates that the turnover will be approximately the same in 2025. However, the turnover exceeds the threshold on 10 October 2025.
The company must register for VAT starting on that day, and both file and pay VAT. The company does not need to register for VAT retroactively, i.e. as of January 2025.
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The turnover for the calendar year is calculated based on the value of sales excluding VAT. The sales exceeding the turnover threshold are subject to VAT in full.
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Example: A company’s turnover totals €19,800 in November 2025. The company’s next sales transaction in November generates €210 (excl. VAT), i.e. the turnover exceeds the threshold. The sales exceeding the threshold (€210) is subject to VAT in full.
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When your turnover has exceeded the threshold but you are not registered for VAT
If you have not registered for VAT in good time and the turnover has exceeded the threshold, you must register for VAT retroactively starting from the day on which the threshold was exceeded.
This means that your first VAT returns and payments may already be late. You may want to consider this when you register and select a tax period for the company. Read more about selecting a tax period
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Example: A company starts conducting business on 1 January 2025. The turnover exceeds the threshold on 1 April 2025. The company does not notice this until later and registers for VAT on 15 July 2025. The company selects its tax period to be a quarter (three months).
- The Tax Administration registers the company for VAT as of 1 April.
- The company files and pays VAT for April–June by the due date of 12 August.
- No late-payment charges are imposed.
Had the company selected a tax period of one month, the VAT returns and payments for April and May would have been late. The company would have had to pay late-payment charges and late-payment interest on them.
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Can a company register for VAT even though its turnover does not exceed the threshold?
A company can register for VAT voluntarily even though the turnover does not exceed €20,000. A precondition is that the company’s operations meet the characteristics of business. “Business” refers to such independent and continuous sale of goods and services to customers that includes an entrepreneurial risk. Small-scale occasional sales and selling conducted as a hobby, for example, do not meet the characteristics of business.
If a company has registered for VAT voluntarily, it must pay VAT on all sales subject to VAT even if the turnover does not exceed the threshold.
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Example: A company has register for VAT for hairdressing activity. The company also starts to sell handmade jewellery. Even though the combined turnover of the hairdressing activity and the sale of jewellery does not exceed €20,000 during the calendar year, the company must pay VAT on both activities.
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How to register
To submit an application for VAT registration is possible when you are setting up the company — or later, when your company has already been issued its Business ID. At that stage, you can submit the application for VAT registration in MyTax.
It is advisable to not submit the application until you start buying goods or services connected to your business activities subject to VAT.
Select the instructions according to your company form:
- If you start a business activity, you can use MyTax to ask for a Business ID to be issued to your new company and to request registration with the Tax Administration’s registers. Direction and guidance: How to request a Business ID and sign up for the Tax Administration’s registers in MyTax
- If you start a business activity and submit a registration application to the Trade Register, you will need to file a start-up notification in the YTJ/BIS e-service. Read more about when to contact the Trade Register (PRH)
- If you have a Business ID, you can submit requests for registrations with the Tax Administration’s registers either through the YTJ/BIS e-service or in MyTax. Direction and guidance: How to sign up for the Tax Administration’s registers in MyTax
- If you cannot use electronically provided services, you can send your start-up notification on paper – Form Y3 – and complete the appropriate fields on it to request registration with the Tax Administration’s registers as needed. You can download the “Y” forms in the YTJ/BIS e-service
If you are an individual taxpayer and you start up as a farmer or forestry farmer, you can use MyTax to apply for a Business ID and request registration with the Tax Administration’s registers.
What kind of operations will make it mandatory for you to apply for VAT registration?
To submit the start-up notification of a limited-liability company, a general or a limited partnership, use the YTJ/BIS e-service. Your new entity will be issued a Business ID, and you can also request registration for it with the Tax Administration’s registers as needed
Submit a start-up notification in the YTJ/BIS e-service
When your company has its Business ID, you can also request registrations with the registers afterwards. This is done in MyTax. Alternatively, you can submit a Notification on changes, to request various registrations for the company in the YTJ/BIS e-service.
How to sign up for the Tax Administration’s registers in MyTax
You can submit an application for registration with the Register of Associations in the e-service of this official register – or on Form Y1a on paper.
If you submit Form Y1a on paper, you can also submit, according to your needs, any requests for registrations with the registers maintained by the Tax Administration by completing and enclosing Form 6212 as well.
If the association is already on the Register of Associations and you plan to submit applications for registrations with the Tax Administration’s registers later, the form to complete is the Change notification 6214. Later, you can use the Change notification again to inform the Tax Administration of any subsequent changes.
The start-up notification form for a foundation is Form Y1.
The forms are available for downloading in the YTJ/BIS e-service
Tax partnerships include agricultural partnerships, forestry partnerships, real estate partnerships and VAT partnerships.
You can submit an application for registration of a tax partnership on Form Y2 on paper. You can also request registrations, according to your needs, with the registers maintained by the Tax Administration at the same time. It is possible for a tax partnership to have a VAT registration for primary production, for business activities, or for transfer of rights of use over real estate property.
If the partnership already has a Business ID, you can also request registrations with the registers afterwards. Alternatively, you can submit Form Y5 on paper, i.e. the Notification on changes form.
The forms are available for downloading in the YTJ/BIS e-service
Read more about what gives rise to a tax partnership (available in Finnish and Swedish, link to Finnish)
Obligations of a company registered for VAT
When a company is in the VAT register
- Add VAT to the prices of the products and services you sell. In other words, invoice the VAT payable on the products and services from the customer.
- Provide the buyer with a receipt or an invoice where the VAT is indicated. Read more about invoicing requirements (detailed guidance)
- Deduct the VAT included in the goods and services you have bought for your VAT-liable business on the VAT return. Read more about the right to deduct VAT.
- File and pay VAT. File a return for every tax period, even if you have not started conducting business yet or if you have not sold anything during the period.
In corporate income taxation, you can only deduct the cost of purchases without VAT. Because you can deduct the VAT on the VAT return, you cannot deduct it again on the income tax return.
When a company is not in the VAT register
- You do not add VAT to the prices of the products and services you sell.
- You do not indicate VAT on the invoices.
- You do not file VAT returns or pay VAT.
- You cannot deduct the VAT included in the goods and services you have bought on the VAT return.
In corporate income taxation, the prices of the purchases you have made for business purposes are deductible in full, i.e. including VAT.
Checking the company’s VAT liability
You can check the company’s liability to pay VAT in the Business Information System (ytj.fi). The service shows, for example, when the company’s registration started and what registers the company has been entered in.
Go to the Business Information System
Note: If you have just started conducting business, the information will be shown in the Business Information System after the Tax Administration completes processing your registration request.
Leaving the VAT register
If you terminate all your business operations, submit a notification of termination to the Business Information System (ytj.fi). You only need to submit one notification to remove your company from the VAT register, the prepayment register and the register of employers.
If the company does not terminate all its business operations but only the activity subject to VAT, you can also request de-registration in MyTax.
Your company can de-register because of lower turnover only at a stage when the turnover has been below €20,000 in two consecutive calendar years. In other words, you will need to watch the turnover for the current and the previous calendar years. No deregistration from VAT is allowed immediately during the year when turnover falls below the threshold for small businesses.
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Example: In 2024, the threshold for businesses registered for VAT was €22,000. A decline in a company’s sales during 2025 causes its annual turnover to decrease to €18,000 for that year. To leave the VAT register, the turnover for two calendar years one after another would have to be below threshold.
If the company prepares an estimate indicating that its 2026 turnover will also be below €20,000, it could leave the register as of 31 December 2025 at the earliest. This would mean that the company would no longer have a VAT registration from 1 January 2026 onwards.
Note: Companies having a VAT registration can be removed from the register no earlier than on the day the request arrives. No company can be removed from it retroactively.
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If you have registered for VAT voluntarily although your company’s turnover does not exceed €20,000 in a calendar year, the company can be removed from the register no earlier than on the day the request arrives. The company cannot be removed from the register retroactively.
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