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VAT relief for small businesses
Attention begins.
The VAT relief for small businesses no longer available as of 1 January 2025
However, a company can request a VAT relief retroactively for accounting periods that ended before 1 January 2025.
Attention ends
You can request a VAT relief retroactively for 3 years from the end of the accounting period that qualified for the relief. For example,
- accounting period 1 January 2023–31 December 2023: request the VAT relief by 31 December 2026
- accounting period 1 January 2024–31 December 2024: request the VAT relief by 31 December 2027.
If your company’s accounting period is not a calendar year and if the tax period is a calendar month, the 3-year period starts at the beginning of the year following the accounting period that qualified for the relief.
Submit the information relevant to the relief on the VAT return you file for the accounting period’s last tax period. If a company’s tax period is a month and the accounting period is other than a calendar year, the company is entitled to request a VAT relief for the accounting period that preceded the entry into force of the law.
Example: A company’s accounting period was 1 January–31 December 2024, i.e. a calendar year, and its turnover for the accounting period was €13,000. The company has registered for VAT voluntarily.
The company can request a VAT relief retroactively until 31 December 2027 by filing a replacement VAT return for 2024.
The company cannot request a VAT relief for the accounting period of 1 January–31 December 2025, not even if its turnover remained under €30,000 and it was still registered for VAT.
Example: A company’s accounting period was 1 July 2024–30 June 2025, i.e. other than a calendar year. The company’s tax period is a month. The company can request a VAT relief retroactively for the calendar months included in the part of the accounting period that preceded the legislative amendment, i.e. for the period of 1 July–31 December 2024.
The company calculates its turnover qualifying for the relief for the period of 1 July–31 December 2024 and converts it to correspond to a turnover for 12 months by multiplying the company’s turnover for the relevant part of the tax period by 12 and dividing it by the actual number of months, i.e. 6.
If the proportionate turnover is less than €30,000, the company is entitled to a VAT relief.
The company can request the VAT relief retroactively on 31 December 2027 at the latest by filing a replacement VAT return for December 2024.
Example: A company’s accounting period was 1 July 2024–30 June 2025, i.e. other than a calendar year. The company’s tax period is a quarter (3 months).
Because the company’s tax period is a quarter, the VAT relief is calculated as if the company’s accounting period were a calendar year, i.e. each month is included in the calculation of the calendar year it belongs to.
The company can request a VAT relief retroactively for accounting period 2024, i.e. the months included in calendar year 2024. The company calculates the company’s VAT and turnover qualifying for the VAT relief in the period of 1 January–31 December 2024.
The company can request the VAT relief retroactively on 31 December 2027 at the latest by filing a replacement VAT return for the last quarter (October–December) of 2024.
If the accounting period is other than a calendar year, the company allocates its sales to the calendar year or to the relevant calendar months of 2024 in the same way as in the company’s accounting. The company can allocate the sales using the accrual basis, invoice basis or cash basis.
How does the relief affect the amount of VAT?
When you submit VAT and relief details in MyTax, the e-service automatically deducts the relief from the amount of VAT payable for the tax period.
If you request the VAT relief retroactively, you receive the relief as a VAT refund.
Frequently asked questions
The VAT relief was available until 31 December 2024. It is not available for accounting periods starting on 1 January 2025 or later.
The VAT relief for small businesses is a tax relief for entrepreneurs and companies that are registered for VAT and have a turnover of less than €30,000 in the accounting period (12 months).
If the company’s turnover is
- €15,000 or less, the company will be refunded the entire amount of VAT qualifying for the relief.
- over €15,000 but less than €30,000, the company will be refunded part of the VAT as a VAT relief.
When you request a VAT relief retroactively, make sure the VAT return includes
- the turnover qualifying for the relief
- the amount of VAT qualifying for the relief.
The turnover and VAT qualifying for the relief are not automatically the same as the company’s turnover and amount of VAT because all sales and taxes are not taken into account when the relief is calculated.
When the turnover qualifying for the VAT relief is €15,000–€30,000, the relief is calculated using the following formula:
VAT – (turnover – €15,000) × VAT
€15,000
In the above formula, turnover and VAT mean the turnover and VAT that qualify for the relief.
If the turnover qualifying for the relief is €15,000 or less, the above formula is not used. In that case, the VAT relief is the same as the amount of VAT qualifying for the relief.
Examples of VAT relief calculations
Example: The sales that qualify for VAT relief: physiotherapy, including VAT-exempt and VAT-liable sales
The physiotherapist’s annual net sales consist of VAT-exempt physiotherapy (€20,000) and VAT-liable zone therapy (€15,000 without VAT). The tax-exempt sales related to physiotherapy are not included in the turnover qualifying for VAT relief. The net sales qualifying for the relief is therefore €15,000.
Example: Some of the deductible VAT relates to forestry
In the accounting period 1 January– 31 December 2023, the turnover qualifying for VAT relief is €16,900 and the VAT to be paid (24%) is €4,056. The VAT deductible for business is €4,190 in total. This amount includes €1,500 of VAT deductible for forestry. The forestry operation does not entail any VAT to be paid.
The VAT for the accounting period is €134 negative. The VAT qualifying for relief is €1,366: the VAT payable €4,056 minus the VAT deductible (excluding the VAT deductible for forestry) €2,690.
VAT relief calculation:
€1,366 – (€16,900 – €15,000) x €1,366 = €1,192.97
€15,000
The amount of the relief is €1,192.97.
Example: A company must pay VAT based on the reverse charge mechanism.
Your tax period is the calendar month. During the accounting period 1 January–31 December 2023, the company’s domestic net sales subject to VAT amount to €16,000 (without VAT). The VAT (24%) on these sales is €3,840. Additionally, the company must pay €250 of VAT based on the reverse charge mechanism. In other words, the deductible VAT for the accounting period is €400 in total: the VAT on domestic purchases €150, and the reverse-charged €250.
The turnover that qualify for VAT relief is €16,000.
The amount of VAT that qualifies for relief is the difference between the tax payable on the domestic sales (€3,840) and the tax deductible for the accounting period (€400), i.e. €3,440.
VAT relief calculation:
€3,440 – (€16,000 – €15,000) x €3,440 = €3,210.67
€15,000
The amount of the relief is €3,210.67.
Read more about the calculation in the detailed guidance on the VAT relief for small businesses (available in Finnish and Swedish, link to Finnish).
The company's operations started in the middle of the calendar year and its first accounting period in accordance with the Accounting Act is 1 September 2023–31 December 2024. Because the company’s tax period is a quarter, when the VAT relief is calculated, the accounting period is considered to be a calendar year, i.e. the number of months stands for the entire calendar year.
Report the information for VAT relief for the period 1 September 2023–31 December 2023 on the VAT return for the last quarter of calendar year 2023 (October–December 2023).
In the VAT relief calculator, enter 4 to indicate the length of the accounting period in months. The calculator adjusts the turnover of the accounting period to correspond to the turnover of a 12-month accounting period.
Report the information for VAT relief for the period 1 January 2024–31 December 2024 on the VAT return for the last quarter of calendar year 2024 (October–December 2024). In the VAT relief calculator, enter 12 to indicate the number of months in the calendar year.
If the company ends its operations in the middle of the calendar year, report the information for VAT relief on the VAT return submitted for the last tax period when the company operated. Read more: Termination of VAT liable activities
The company's accounting period in accordance with the Accounting Act is 1 February 2023–31 January 2024. The company's VAT period was previously a calendar year, but starting 1 October 2023, it is a month.
Because the VAT period determines which period’s VAT return the information must be reported in, file a VAT return for 1 January–30 September 2023 and report the VAT relief information for this period. Enter the length of the accounting period in months (9 months) and information regarding the company’s turnover and VAT for 1 January–30 September in the VAT relief calculator. The calculator adjusts the turnover of the accounting period to correspond to the turnover of a 12-month accounting period.
Starting October, the company will file its VAT returns on a monthly basis. Report the information for VAT relief for 1 October 2023–31 January 2024 on the VAT return for the last month of the accounting period, i.e. January 2024. Enter the length of the accounting period in months (4 months) and information regarding the company’s turnover and VAT for 1 October 2023–31 January 2024 in the VAT relief calculator. The calculator adjusts the turnover of the accounting period to correspond to the turnover of a 12-month accounting period.
Use the VAT relief calculator to calculate the relief.The calculator takes into account the sales and taxes that do not qualify for the relief.
For example, you are not entitled to the relief, if
- the VAT for the accounting period is negative, i.e. the amount of VAT included in purchases is greater than the amount of VAT paid on sales.
- the company’s entire net sales consist of activities that do not qualify for the VAT relief, such as sales of services outside Finland or sales of fixed assets.
- the company is regarded as a foreign resident with no permanent establishment in Finland.
In addition, income from forestry (e.g. income from timber sales), for example, does not qualify for the VAT relief. Read more about exceptions to VAT relief of agricultural and forestry operators (in Finnish or Swedish).
The VAT relief for small businesses is subject to income tax. The relief is recognised as income for the accounting period during which the company qualified for the relief.
An exception is companies where income is recognised on a cash basis. For such companies, the relief is taxable income for the year when the Tax Administration pays the relief to the company. If a company recognising income on a cash basis deducts the amount of relief from the amount of VAT payable for the tax period, the relief is income for the tax year during which the VAT filed on the VAT return in question would have fallen due.
Report the relief in the section “Financial aid and subsidies received” on the tax return.
The VAT relief is income from the source of income for which the relief was granted. A VAT relief for business activities is thus income from a business source of income, and a VAT relief for agriculture is income from an agricultural source of income.
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