How to register for VAT

Register your business or organisation in the VAT Register if your turnover for the tax period (12 months) exceeds EUR 10,000. In certain cases, voluntary registration in the VAT Register is possible even if the business or organisation is not liable to pay VAT. However, voluntary registration is conditional on the operations being defined as conduct of business.

Register for VAT by using a business type-specific Y form, or by using the BIS (Business Information System) online service at ytj.fi.

  • Register if your business or organisation is, by law, liable to pay VAT.
  • Apply for registration if your business or organisation voluntarily seeks to be entered into the VAT Register.

 Fill in a start-up notification or notification of change

Use the start-up notification (ytj.fi) to register a new business or organisation as liable to pay VAT.

  • A limited liability company can be founded and registered in the VAT Register either online or by using a paper form.
  • If you are a private trader who seeks entry to the Trade Register, submit the start-up notification to the Finnish Patent and Registration Office online. After receiving a business ID, apply for entry into the Tax Administration’s registers (e.g. the VAT Register) by using the online notification of change.
  • If you are a private trader, an agricultural producer or a forest owner, and you are only applying for entry into the Tax Administration's registers, the start-up notification can only be submitted by using the paper form.
  • To set up another type of business, corporation or organisation, the start-up notification must be submitted by using the paper form.

If you or your company already have a business ID, use the notification of change (in Finnish only).

For more detailed instructions, go to ytj.fi.

 

Choose the appropriate tax period upon registration

The registration process includes choosing a tax period. The tax period for taxpayers is usually one calendar month. Businesses with small-scale operations and turnover can also request an extended tax period. Having an extended tax period means that the VAT return can be filed and the VAT paid on a quarterly or yearly basis.

For primary producers and visual artists not engaged in other operations for which they are liable to pay VAT, the tax period is usually one calendar year.

You can request a shorter or an extended tax period

  • by using the start-up notification or notification of change when you register for VAT
  • later by using the form 4071 (Request for change of tax period of self-assessed taxes).

The tax period must remain unchanged for at least one year. VAT returns must be filed monthly until the Tax Administration approves the request for an extended tax period.

Read more (in Finnish): Requesting a shorter/extended tax period 

When is registration for VAT mandatory?

A business or an organisation is liable to pay VAT if their tax period turnover is more than EUR 10,000. Once this limit is exceeded, the business or organisation must register for VAT. The liability to pay VAT begins on the first day of the tax period or on the date of commencement of business operations. However, the registration obligation does not apply if the business or organisation is engaged in operations for which VAT is not payable (Value Added Tax Act, Chapter 4).

A non-profit organisation or foundation shall register in the VAT Register if it is engaged in operations specified as taxable business operations under the income tax law, and the tax period turnover is more than EUR 10,000.

If the turnover exceeds EUR 10,000 during the tax period, but was originally estimated to be lower, a VAT return must be filed and VAT paid for the total turnover subject to VAT for the whole duration of the tax period.

In such a case, the business or organisation must take the initiative and register for VAT as follows:

  • Mark the first day of the tax period during which the turnover exceeded EUR 10,000, or the date of commencement of business operations during the tax period, as the date of commencement of the liability to pay VAT.
  • Pay the VAT, including interest for late payment, and file the VAT returns for each tax period.
  • If the VAT return is filed after the due date, a penalty for late payment will be charged.

The amount of sales for the tax period must be estimated well in advance as precisely and accurately as possible for the purpose of calculating whether the turnover will be less or more than EUR 10,000.

If the tax period of a business or an organisation is shorter or longer than 12 months, the actual turnover is converted to correspond to the turnover for 12 months. The tax period turnover is the amount calculated by multiplying the tax period turnover by 12 and dividing the result with the number of full months in the tax period.

             

Here is how to calculate annualised turnover for the tax period:     turnover x 12 / full months in the tax period

Example of calculating annualised turnover for the tax period:

The company’s first tax period is 20 September 2016 − 31 December 2016. The company’s turnover for that period is estimated to be approximately EUR 2,600. Since the first tax period is shorter than 12 months, the estimated turnover is converted to the corresponding turnover for 12 months as follows:

EUR 2,600 x 12 months / 3 months = EUR 10,400

Turnover: EUR 2,600

Full months in the tax period 3 (October, November and December) – Note! September is not a full month.

Annualised turnover: EUR 10,400

The estimated annualised turnover of the company is more than EUR 10,000. The company must be registered in the VAT Register, starting from the date of commencement of business operations (20 September 2016).

What sales are included in the turnover?

The EUR 10,000 limit for the turnover includes the sales of goods and services with VAT, and certain sales without tax.

Read more (in Finnish): Arvonlisäverottoman vähäisen toiminnan raja: Liikevaihtoon luettavat myynnit 

 

Who can voluntarily register for VAT?

Under certain conditions, a business or an organisation can voluntarily register for VAT even if it is not obliged to do so by law. Having a turnover of less than EUR 10,000 for the tax period does not prevent entry into the VAT Register.

Once the business or organisation has been entered into the VAT Register, goods and services are sold with tax, i.e. VAT is added to the prices of goods and services. The taxes on purchases recorded as taxable sales are deductible.

Applying for entry into the VAT Register is justified if VAT is included in the expenses arising from business operations. VAT-exempt conduct of business is only beneficial if the company sells its product(s) directly to the consumer.

Read more (in Finnish): Arvonlisäverottoman vähäisen toiminnan raja: Verovelvolliseksi hakeutuminen 

As a rule, leasing immovable property is exempt from VAT. However, in certain cases, a lessor may apply for registration for VAT for the purpose of the supply of immovable property.

Read more (in Finnish): Kiinteistön käyttöoikeuden luovuttamisesta arvonlisäverovelvolliseksi hakeutuminen

A non-profit organisation or foundation may apply for entry into the VAT Register even if it is not engaged in taxable business operations. However, the operations must be of the type of conduct of business specified in the Value Added Tax Act.

Read more (in Finnish): Verotusohje yleishyödyllisille yhteisöilleYleishyödyllinen yhteisö voi hakeutua arvonlisäverovelvollisten rekisteriin, vaikka se ei harjoita veronalaista elinkeinotoimintaa. Sen harjoittaman toiminnan tulee kuitenkin olla arvonlisäverolaissa tarkoitettua liiketoimintaa. Yleishyödyllinen yhteisö voi hakeutua arvonlisäverovelvollisten rekisteriin, vaikka se ei harjoita veronalaista elinkeinotoimintaa. Sen harjoittaman toiminnan tulee kuitenkin olla arvonlisäverolaissa tarkoitettua liiketoimintaa. Yleishyödyllinen yhteisö voi hakeutua arvonlisäverovelvollisten rekisteriin, vaikka se ei harjoita veronalaista elinkeinotoimintaa. Sen harjoittaman toiminnan tulee kuitenkin olla arvonlisäverolaissa tarkoitettua liiketoimintaa.

When does the liability to pay VAT begin?

Register in the VAT Register before the commencement of taxable business operations. Mark the actual date of commencement in the start-up notification or notification of change.

If the tax period turnover exceeds EUR 10,000, the business or organisation is entered into the VAT Register starting from the first day of the tax period or the date of commencement of operations. Upon application, entry into the VAT Register is possible starting from the first day of purchasing goods or services for the purpose of taxable business operations.

Based on a voluntary application for entry into the VAT Register, the liability to pay VAT begins, at the earliest, on the date of receipt of a start-up notification or notification of change.

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