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Toiminimi or Oy: what changes in bookkeeping and tax

Published 18 September 2026

This is the question we are asked most often, usually with a number attached: at what point should a toiminimi become an Oy? The honest answer needs your figures, but the parts that decide it are the same for everyone. Here is what actually changes in the bookkeeping, in the filings and in the tax.

One difference explains most of the others

A toiminimi is you. The business income is your income, its money is your money, and you answer for its debts with what you own.

An Oy is a separate legal person. Its money belongs to the company, not to you, and you are a shareholder who takes salary or dividends out of it. A shareholder is not personally liable for the company's debts, although a lender or a landlord may still ask you to guarantee them personally, which puts part of that protection back on your shoulders.

Almost everything below follows from that one difference.

Bookkeeping: single entry exists, but only for a toiminimi

A toiminimi may keep single-entry bookkeeping. Double-entry becomes compulsory when two of these three are true:

• the balance-sheet total is over 100 000 euros
• turnover is over 200 000 euros
• the business employed more than three people on average

Two more rules are worth knowing. With single-entry bookkeeping the financial year is always the calendar year, and if you want a financial year that is not the calendar year, double-entry becomes compulsory whatever your company form.

An Oy always keeps double-entry bookkeeping on an accrual basis, and its financial year may be something other than the calendar year, with the first one running up to 18 months.

In our own work most sole traders end up on double-entry anyway. Single entry is a floor the law allows, not a target: it tells you what moved through the bank, while double entry tells you what the business actually earned and owes.

What you have to file

An Oy files its financial statements with the Trade Register within eight months of the end of the financial period. Filing online at ytj.fi is free. Filing late is not: 150 euros when you are up to two months late, 300 euros at two to four months, and 600 euros beyond that or if the statements never arrive.

A toiminimi files nothing with the Trade Register. The business figures go into your own tax return.

How the profit is taxed

Toiminimi. The profit is your income, whether or not you take the money out. First the Tax Administration makes the 5 % entrepreneur's deduction. What is left is split in two: an amount matching a 20 % annual return on the business's net worth from the previous year is capital income, and the rest is earned income, taxed at your own progressive rate.

Oy. The company pays 20 % income tax on its profit. What you take out is then taxed on you:

• Salary is earned income for you and a cost for the company, with the payroll reporting that goes with it.
• Dividends follow the rules for unlisted companies. Up to 8 % of the mathematical value of your shares, a dividend is capital income; of that part, up to 150 000 euros in a year 25 % is taxable and 75 % is tax free, and above 150 000 euros 85 % is taxable capital income. The 150 000 euro limit is per person, counting all the unlisted dividends you receive that year. The part of a dividend above the 8 % line is earned income, of which 75 % is taxable.

The difference that matters in practice: a toiminimi's whole profit is taxed on you this year even if it stays in the business account, while an Oy's profit is taxed at 20 % in the company and taxed again only when it is distributed.

Taking money out

From a toiminimi you take private withdrawals. They are not salary, they are not a cost, and they change nothing in your tax, because the profit was taxed anyway.

From an Oy you take salary, dividends, or both. Salary means payroll: a payslip and the reports that follow it. Dividends are decided at a shareholders' meeting once the financial statements are done, and only out of distributable funds.

What usually decides it

• Profit you do not need to live on. In an Oy it can stay in the company at 20 % instead of your marginal rate.
• Risk. Large contracts, stock, premises, employees: a separate legal person keeps that away from your own assets.
• Partners and a future sale. Shares can be shared or sold. A toiminimi cannot.
• Cost and admin. Registering an Oy costs 300 euros online or 400 on paper, a toiminimi 75 euros, from 1 January 2026. Then add double-entry bookkeeping, financial statements and their filing, every year.
• Pension. YEL insurance applies to both, and its cost usually surprises people more than the tax does.

We do not answer this with a rule of thumb, because the answer moves with your profit, what you take out and what you own. It takes ten minutes with real numbers.

Changing your mind later

Starting as a toiminimi and moving to an Oy later is common and perfectly possible. The change has its own tax rules, and done in the wrong order it can cost you, so ask before you file anything.

What we do

We do the bookkeeping, the VAT and the payroll for both forms, and we say plainly which one your numbers point to. If you are weighing it up, book an introduction and bring last year's figures. If you are already running an Oy and the filings feel heavy, that is exactly the part we take over. See what we do.

Sources

• Tax Administration: accounting, financial year and tax period
• Tax Administration: taxation of self-employed individuals
• Tax Administration: the deduction for entrepreneurs
• Tax Administration: income tax of limited liability companies
• Tax Administration: dividend from an unlisted company
• Finnish Patent and Registration Office: financial statements
• Finnish Patent and Registration Office: start-up notification fees

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.

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