VAT registration in Finland: the 20 000 euro limit, and when you can leave
A business in Finland must register for VAT once its turnover passes 20 000 euros in a calendar year. Liability starts with the sale that takes you over the limit, not at the start of the year. You can stay outside the register only while turnover is 20 000 euros or less in both the current and the previous calendar year, which is why you cannot leave in the same year your sales fall.
When you pass the limit
The limit has been 20 000 euros since the start of 2025; before that it was 15 000 euros per accounting period, and the tapered relief for small businesses (alarajahuojennus) was abolished at the same time. Turnover is now always counted per calendar year, even if the business runs for only part of the year or its accounting period is not the calendar year.
The sale that crosses the limit is taxable in full. In the Tax Administration's example, turnover reaches 19 800 euros by November and the next sale, 210 euros, takes it over. VAT is due on the whole 210 euros, not only on 10 of them.
In practice, register in good time when you are close to the limit, so that you are already in the register on the day you pass it.
What counts as turnover
| Counts | Does not count |
|---|---|
| taxable sales, excluding VAT | sales of fixed assets, such as a used machine |
| exports of goods and sales of goods to other EU countries | sales not taxable in Finland, such as many services to foreign businesses |
| financial and insurance services, renting out property | most VAT-exempt sales, such as health care |
A consultant who sells to foreign businesses, for example, counts only the sales taxable in Finland. In the Tax Administration's example, a business sells 18 000 euros in Finland and 12 000 euros to foreign businesses; its turnover in Finland is 18 000 euros, as in the year before, so it does not have to register.
If you notice too late
You then register backdated to the day you passed the limit, and your first VAT returns may already be late. Your choice of tax period can often avoid the penalties.
In the Tax Administration's example, the limit is passed on 1 April, but the business only notices and registers on 15 July. It chooses a quarterly tax period, so the April–June return and payment are due on 12 August and nothing is late. With a monthly period, the April and May returns would have been late. What lateness costs is in our article on late VAT returns.
Registering voluntarily
A business can register for VAT even below the limit. You can then deduct the VAT on your purchases, but you pay VAT on all your taxable sales, including a side business you start later. Registration starts on the day of the application at the earliest and cannot be backdated, and the same applies when you leave. Activities that are exempt from VAT, such as financial or insurance services, cannot be registered.
When you can leave the register
You can leave because of low turnover only when turnover stays at 20 000 euros or less in two consecutive calendar years: the previous year was under the limit, and the current year is expected to be too. In the Tax Administration's example, turnover was 22 000 euros in 2024 and 18 000 euros in 2025. If the business expects 2026 to stay under the limit as well, the business can leave the register on 31 December 2025 at the earliest, so it is out of the register from 1 January 2026. Removal takes effect from the day the application arrives at the earliest, never backdated.
How to register
A new business registers with the start-up notification in the YTJ service, or as a toiminimi in MyTax; a business that already has a business ID registers in MyTax or with a change notification in YTJ. A toiminimi can also register on paper, with form Y3. You can check a registration at ytj.fi.
Once registered, you add VAT to your prices, file a VAT return for every tax period, even one with no sales, and deduct the VAT on your purchases. VAT return deadlines and watching your turnover are part of our services.
Sources
- Tax Administration: how to register for VAT
- Tax Administration: VAT-exempt small-scale business, chapters 2.1–2.4, detailed guidance (in Finnish)
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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