Credit notes in Finland: requirements and VAT corrections

Karma Accounts · Published 14 October 2026

A credit note (hyvityslasku) is an invoice that reduces or cancels an earlier invoice, for example after a complaint, a returned item or a cancelled order. When the original sale had to be invoiced, as sales to businesses generally do, the VAT Act (arvonlisäverolaki, AVL) requires the seller to issue one, and it must contain an unambiguous reference to the original invoice. The seller deducts the credit, without VAT, from its taxable sales, the VAT-registered buyer reduces its deduction by the VAT included in the credit, and the credit belongs to the VAT period in which it is booked.

When you must issue a credit note

For the sales that must be invoiced, which include taxable sales to a business or another legal person, the seller must also give an invoice for later corrections, unless they were already taken into account in an earlier invoice (AVL 209 b §). These corrections are listed in AVL 78 §:

discounts, rebates and other credits given to the buyer after the sale
refunds because a contract was annulled, cancelled or rescinded
compensation for returned packaging and transport equipment

An ordinary cash discount, such as 2 % if paid within 14 days, needs no credit note if the original invoice shows the discount or the amount payable on both due dates. For an annual discount the credit note can refer to the period instead of every invoice.

Ordinary domestic sales to consumers generally do not require a VAT invoice (there are exceptions, such as distance sales of goods to consumers in other EU countries), but a credit to a consumer still reduces your taxable sales, and you need a voucher for it in the books.

What a credit note must show

A credit note is an invoice in the VAT Act's sense: it has its own date and its own running number, says what is being credited, and shows the change in the taxable amount and the VAT by rate. It must contain an unambiguous reference to the invoice it changes (AVL 209 e §, subsection 1, point 18); the original invoice number is the simplest reference. Details already on the original invoice, such as addresses, need not be repeated: with that reference the two documents together form the invoice (AVL 209 e §, subsection 2). The full list of entries is in our article on invoice requirements.

Use the VAT rate of the original sale. The Tax Administration's instructions say that discounts and similar adjustments use the rate in force when the goods were delivered or the service performed, even if the credit is booked after a rate change.

When the original sale was a sale of goods to another EU country, a distance sale or a cross-border sale where the buyer pays the VAT, a reference is not enough: the Tax Administration says the new invoice must contain all the required entries again. Where a simplified invoice is allowed, for example when the total is at most 400 euros including VAT, a correcting invoice must still refer to the original and say what has changed.

Credit notes are kept like other invoices: for at least six years from the end of the calendar year of the VAT period the credit belongs to, or, if your financial year is not the calendar year and you file VAT monthly, from the end of the calendar year in which that financial year ends (AVL 209 n §). Our free invoice template makes an invoice with the required entries, together with the reference number and bank barcode.

An example

In the Tax Administration's own example, an upholsterer invoices 376.50 euros for re-covering a sofa: 300 euros plus 76.50 euros of VAT at 25.5 %. The customer complains about the seams and they agree on a credit of 100 euros.

	Original	After the credit
Taxable amount	300.00 €	220.32 €
VAT 25.5 %	76.50 €	56.18 €
Total	376.50 €	276.50 €

The 100 euros credited include 20.32 euros of VAT, so the credit note shows −79.68 euros plus VAT −20.32 euros. The amount deducted from the taxable sales never includes the VAT (AVL 78 § 3 mom.).

Which VAT period

A credit under AVL 78 § is allocated to the calendar month in which it is booked under good accounting practice (AVL 139 §). You do not reopen the month of the original sale; the credit reduces your sales in the period of the credit note, and the usual deadlines apply.

A credit note issued because the original invoice was wrong is a different matter. If the error, such as a wrong VAT rate, also went into a VAT return you have already filed, correct that return: the rule is a replacement return for the period (OVML 25 §). If the error changes the VAT for the period by at most 500 euros, the Tax Administration also lets you correct it in the next return due after you notice it, by adjusting the VAT amount. Errors must be corrected within three years, counted from the start of the year after the period concerned. How to do it step by step is in how to correct a VAT return, and a return that was never filed in late VAT return.

The buyer's VAT deduction

A VAT-registered buyer who receives a credit for a discount, a credit or returned packaging must correct the VAT it deducted accordingly (AVL 118 §): in the example, by the 20.32 euros of VAT in the credit, if it had deducted the original VAT in full. The same applies when a contract is annulled or cancelled after the deduction was made. If an invoice is wrong in its VAT details, the buyer has no right to deduct on it and must ask the seller for a corrected invoice that refers to the original. Small mistakes, such as a misspelt name or a wrong unit price when the total is right, do not remove the deduction.

A credit note is not a bad debt

When a customer goes bankrupt or collection fails and the customer cannot pay, the seller writes the receivable off as a bad debt (luottotappio) and deducts it from its taxable sales without issuing a credit note, and the buyer does not correct its deduction. A solvent customer who simply refuses to pay is not a bad debt. Voluntarily forgiving a receivable, outside court proceedings, is treated like a discount. If a written-off amount is later paid, it goes back into the taxable sales of the period in which it is received, at the VAT rate of the original sale.

What we do

We book your sales invoices and credit notes and file your VAT returns as part of the monthly fee: limited companies 199 euros a month up to 240 000 euros of turnover and 249 euros above, sole traders from 69 euros a month, plus VAT 25.5 %, with software and the year-end included and no limit on receipts. We are based in Helsinki and work online across Finland. See bookkeeping and accounting in Helsinki and our guide to how to invoice in Finland.

Sources

Please note: this is general information about Finnish rules, not advice for your own situation, and the rules change. Ask us before you act on it.

Need an invoice today?

Our free invoice template makes a Finnish invoice with the reference number and the bank barcode. When you would rather hand over the books too, a sole trader pays from 69 € a month and a limited company from 199 €, plus VAT.

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