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In addition, a new method will be implemented for threshold appraisals: company turnover will always be indicated for the entire calendar year instead of the accounting year. Threshold appraisal will not only look into the current calendar year’s turnover, but also take account of the preceding calendar year’s turnover.
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The scale of your business operation is determined by the size of its annual turnover. If the business is small in scale, there is no need to apply for VAT registration.
The threshold of small-scale business stands at €20,000 of annual turnover, however, referring to 2 calendar years one after the other: the current year and last year. This way, your business’s possible exceedance of the threshold is based on its turnover during two calendar years. Annual turnover figures for two years should not be added together. Instead, max. €20,000 of turnover is the threshold for both of the two years one after one.
For businesses with a non-calendar accounting year (12 months), the turnover is calculated by combining different accounting periods in such a way that the combined turnover will reflect that of a full calendar year.
Example: The company’s accounting year begins on 1 July, ending 30 June. The 2025 turnover is calculated by combining the turnover parts earned during the 2025 calendar year within the 1 July 2024 – 30 June 2025 accounting year and the 1 July 2025 – 30 June 2026 accounting year. As a result, only the turnover relevant for 1 January 2025 – 31 December 2025 must be included.
Companies that have no VAT registration are required to watch the growth of their turnover and if the threshold is exceeded, they must apply for VAT registration, which will become valid immediately at the date when turnover passed the threshold. This point in time will also be the start date for the company’s liability for paying VAT. This means that it is actually required of a company that exceeds the VAT registration threshold to become VAT-registered immediately starting on the date of exceedance.
Example: For the 2024 calendar year, your company reached a turnover of €13,000. For the current 2025 calendar year, according to estimates prepared, the company’s turnover seemed to remain the same. The company has no VAT registration. On 10 October 2025, your turnover exceeds the €20,000 threshold. Registration is mandatory starting 10 October 2025. However, there is no need for your company to ask for a backward (retroactive) VAT registration that would concern the beginning of the 2025 calendar year.
To calculate the annual turnover for one calendar year, you need to look into your net sales, not including VAT, and add all of the sales together. The amount of selling that exceeds the turnover threshold is VAT-taxable in full.
Example: The company has no VAT registration because it has been a small business. However, by November 2025, its turnover for the calendar year reaches €19,800. The company makes one single sale for €210 (excl. VAT) before end of November. This makes it go over the €20,000 threshold. The selling that causes threshold exceedance must be treated as VAT-taxable in full (the €210 sale).
Small companies continue to have the option to register for VAT voluntarily although their turnover does not reach the threshold. However, VAT registration can only be granted on the condition that the company’s sales of goods and services take place in the conduct of business. Read more about entering the VAT register
The responsibility for monitoring the company’s annual turnover for 2 years falls upon the small business itself, and not only the turnover for the current year but also for the previous calendar year must be monitored. As a result, no cancellation of a VAT registration is permissible immediately during the calendar year when company turnover stays below the threshold.
Example: For the 2024 calendar year, your company gets €22,000 of turnover. The company is on the VAT register. Although during the 2025 calendar year, turnover goes down to €18,000, the earliest time for de-registration due to low turnover would be the 31 December 2025.
Read more: Termination of VAT-liable activities
In general, the VAT period is one month. In other words, business enterprises must file and pay VAT on a calendar-monthly basis. However, small companies may apply for a longer tax period for their VAT reporting – either once every quarter, or once a year. Read more about VAT periods.
The new EU VAT scheme for small businesses (SME), based on optional signup by a small business, has been introduced starting 1 January 2025 in the European Union. Subject to certain restrictions, the scheme makes VAT-exempted selling possible to customers in other EU countries. Read more about the VAT scheme for EU sales by small businesses (SME).
Foreign companies established in a non-EU country cannot be given the benefits accorded within the EU SME scheme to small business operations. The VAT exemption is not available even if the foreign company has a fixed establishment in Finland.
Until the end of 2024, the turnover threshold for small businesses stood at €15,000. The calculation rule for reaching the threshold was based on company turnover for the accounting period (12 months).
Companies were required to estimate in advance whether their sales for the accounting period would exceed the threshold of €15,000. If the company had no VAT registration and its turnover went up higher than allowed for a small-scale business, it had to pay the VAT afterwards, for the entire accounting period. Read more: “The limit for a VAT-exempt small-scale business is €15,000” — Arvonlisäverottoman vähäisen toiminnan raja 15 000 euroa - vero.fi (in Finnish and Swedish, link to Finnish)
When a company is in the VAT register
When a company is not in the VAT register
Any company that sells goods or services for more than €20,000 during one calendar year must be entered in the VAT register (until 31 Dec 2024, the threshold was 15,000 euros during one accounting period (consisting of 12 months).
If the company’s turnover is €20,000 or less per calendar year, the company has the option to apply for VAT registration voluntarily. However, registration can only be granted on the condition that the company is selling goods and services in the conduct of its business.
There are also some exceptions to VAT liability: read more about how to register for VAT.
When you examine annual turnover from the perspective of the VAT registration threshold, include the following items:
Do not include the following:
The threshold for small-scale activity is fixed at €20,000 although a company might begin its business part way through the year.
Example: A business started in the middle of the calendar year and its first accounting period in accordance with the Accounting Act is 1 July 2025 — 31 December 2025. During the 2025 calendar year, this business will only reach €16,000 in turnover. This means that there is no need to submit an application for VAT registration.
Some companies start up with a first accounting period longer than 12 months. In this case, the question of whether the company will go over the threshold is still answered based on the turnover earned during one calendar year.
When your business has been registered for VAT, do the following:
Your company must submit an application for VAT registration, starting the date when the threshold was exceeded. The date of exceedance will also mark the start date of your liability to pay VAT.
If you notice that the turnover exceeds the €20,000 threshold, here is what to do:
The responsibility of keeping an eye on sales growth falls upon the company, and the company needs to take the initiative to apply for VAT registration in time. If your company delays its VAT registration, the Tax Administration will take measures to enter it in the VAT register retroactively, starting on the date of threshold exceedance. Note that if this should happen, the first few VAT returns and VAT payments for the year may already be late. You can take that into account when you determine the length of your VAT reporting period (the tax period) on your application for VAT registration: if possible, select a longer tax period.
Example: The company started its business activities on 1 January 2025. Its turnover exceeds €20,000 on 1 April. However, the owner of the company was not aware of this until later. Taking account of the delay, the company selects the quarter-year tax period when it submits its application for VAT registration on 15 July. The Tax Administration enters the company into the register with the retroactive start date of 1 April 2025. For a company reporting VAT every quarter, the due date for VAT returns and VAT payments for April—June is 12 August. The company files its VAT return for the April—May quarter and pays the VAT by the due date. It does not have to pay any late-payment charges.
If the company had selected a tax period of one month, the returns and payments for April and May would already have been late. The company would have had to pay late-payment charges for them.
You can check the company’s liability for VAT in the Business Information System (BIS). Go to the Business Information System.
The service shows you when the company’s registration became effective and what registers the company has been entered in.
Note: If you have started business operations, you will see your company’s details in the service after the Tax Administration has processed your registration request.
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