Teemu Karuluoto
You have to register for VAT in Finland when your turnover exceeds €20,000 in a calendar year. The obligation starts on the day you cross the threshold, not retroactively from 1 January. The sale that takes you over €20,000 is taxable in full. The threshold is checked against both the current and the previous calendar year. This rule has applied since 1 January 2025, and many pages still describe the old one.
What is the VAT threshold in Finland?
The threshold is €20,000 of turnover in a calendar year. Below it, your business counts as small-scale business activity (vähäinen liiketoiminta), and you do not charge or pay VAT (arvonlisävero, ALV) on your sales. The threshold rose from €15,000 to €20,000 on 1 January 2025.
It is measured on turnover, not profit. A founder who invoices €24,000 and spends €10,000 is over the threshold.
How does the two-year rule work?
Your sales are exempt only if turnover stays at or below €20,000 in both the current and the previous calendar year. Both years have to stay under.
This bites when turnover drops. If your 2024 turnover was €22,000, you could not leave the VAT register during 2025, even if 2025 ended at €18,000. The earliest you could leave was 1 January 2026, and only if 2026 also stays under the threshold. Deregistration on the grounds of lower turnover is possible only when turnover is at most €20,000 in both the current and the previous calendar year, so you cannot leave in the same year your turnover drops. You also cannot be removed from the register retroactively: deregistration takes effect no earlier than the day your request arrives.
What happens when you cross €20,000 in the middle of the year?
VAT liability starts on the day you exceed the threshold. Your earlier sales in the same calendar year stay VAT-exempt.
The sale that crosses the threshold, however, is taxable in full. If your sales stand at €19,900 in early November and your next invoice is €210, the entire €210 is VAT-liable, and so is every sale after it.
Situation | Old rule (until 2024) | Current rule (from 2025) |
|---|---|---|
Threshold | €15,000 | €20,000 |
Crossing it mid-year | Whole year's sales taxable retroactively | Liable from the day the threshold is exceeded |
Earlier sales that year | Became taxable | Stay exempt |
Sale that crosses the line | Taxable | Taxable in full |
What if you already crossed the threshold without registering?
Registration is then mandatory, and you must register retroactively, starting from the day the threshold was exceeded. That means VAT is owed on sales from that date, whether or not you charged it on your invoices.
If you did not add VAT to those invoices, the VAT still has to be paid, out of your margin. That is the most expensive way to meet the threshold.
How do you register for VAT in Finland?
You register with the Finnish Tax Administration (Verohallinto). How you do it depends on whether your business is new or already running.
Your situation | How to register |
|---|---|
New toiminimi (sole trader) | In OmaVero (MyTax) when you request a Business ID (Y-tunnus), or with a start-up notification in the Business Information System (YTJ) |
New osakeyhtiö (Oy, limited company) | Start-up notification in YTJ. Later registrations in OmaVero or with a YTJ change notification |
Existing business | Application for VAT registration in OmaVero |
Register before you cross the threshold, so your prices and invoice templates include VAT from day one. Once registered, your Finnish VAT number is FI plus the eight digits of your Business ID, without the hyphen.
You also choose a tax period (verokausi) when you register, which decides how often you file. The options are in our article on Finnish VAT return deadlines and tax periods.
Should you register for VAT voluntarily?
A business under the threshold can register voluntarily, as long as the activity has the characteristics of a business. Whether it pays off depends on who pays your invoices.
Situation | Voluntary registration |
|---|---|
Your customers are companies | Usually worth it. They deduct the VAT, so your price effectively stays the same, and you can deduct VAT on your own purchases |
Your customers are consumers | Less often worth it. VAT raises your price or cuts your margin |
Large deductible purchases at the start | Can be worth it, because you recover the VAT as a deduction or refund |
Voluntary registration is binding: you file a return for every tax period, empty ones included, until you deregister.
What happened to the VAT relief for small businesses?
The VAT relief for small businesses (alarajahuojennus) was abolished from 1 January 2025, and 2024 was the last year it could be claimed for. A business that crosses €20,000 now pays VAT in full from the first euro after the threshold, so review your prices before you get close. Our article on how to calculate Finnish VAT in both directions shows what 25.5% does to a price.
Does the threshold apply per business or per activity?
Per business. The €20,000 threshold applies to your company's total turnover, not to a single client or service, even if you run more than one line of business.
Selling to other EU countries adds a second threshold: since 1 January 2025, the EU small business scheme has a €100,000 limit on combined EU turnover across the current and previous calendar year.
How do you know when you are about to cross the threshold?
The threshold is usually crossed without anyone noticing, because most founders check it once a year. If you invoice irregularly, you only see where you stand when your books are up to date.
NoCFO is the all-in-one AI-native finance platform for entrepreneurs and founders. Invoicing and bookkeeping run on the same platform, so your turnover for the year is always visible and never needs adding up by hand. Luca, AI CFO, explains what the numbers mean and what to do next. You or your accountant stay in control: NoCFO suggests, a person reviews and approves.
Crossing the threshold is not the problem. Finding out afterwards is. For rates, deductions and deadlines, see the complete guide to Finnish VAT, and for the sole-trader view, VAT for a toiminimi in practice.
Frequently asked questions
What is the VAT registration threshold in Finland in 2026?
€20,000 of turnover in a calendar year, checked against both the current and the previous year.
Does VAT liability start from the beginning of the year?
No. It starts on the day you exceed €20,000. Earlier sales in the same year stay exempt.
Is the invoice that crosses the threshold fully taxable?
Yes. The sale that takes you over €20,000 is VAT-liable in full.
Can I register for VAT in Finland voluntarily?
Yes, if the activity has the characteristics of a business. It usually pays off when you sell to companies.
When can I leave the Finnish VAT register?
When turnover is at most €20,000 in both the current and the previous calendar year. You cannot leave in the same year your turnover drops. Deregistration is never retroactive.
Keep your turnover in view all year
Keep this year's turnover visible, and the threshold will never come as a surprise. Start free at nocfo.io.
Sources (checked 28 September 2026)
Verohallinto: VAT exemption for small businesses (€20,000, current and previous year, liability from the day exceeded, sale exceeding it taxable, EU €100,000)
Verohallinto: The liability for paying VAT and registration for VAT (how to register by business type, voluntary and retroactive registration, deregistration after two years, no retroactive deregistration)
Verohallinto: Pienten yritysten alv-velvollisuus muuttuu (threshold from €15,000 to €20,000, relief abolished 1 January 2025, last claimable for 2024)
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Teemu Karuluoto