VAT in Finland 2026: rates, registration and the rules for foreign entrepreneurs
By Nita Mäkinen, bookkeeper and owner of Tilitoimisto N.M, Nokia. Published 28 May 2026. Updated 7 October 2026. 11 min read.
Quick answer: Finland's standard VAT rate is 25.5 percent in 2026, and the reduced rates are 13.5 and 10 percent. A Finnish company must register for VAT once its turnover goes over 20,000 EUR in the current or the previous calendar year. A foreign company without a fixed establishment in Finland usually doesn't register for sales to Finnish VAT-registered businesses, because the buyer reports the VAT. It does register when its sales to private persons are taxable in Finland, for example goods located here, events or passenger transport, unless an EU special scheme covers the sales. Returns are due by the 12th day of the second month after the period.
I file VAT returns for Finnish companies whose owners don't speak Finnish. Most VAT questions I get from foreign founders come down to one thing: which set of rules applies to them. Start with the table below, then read the parts that apply to you.
Which VAT rules apply to you
| Your situation | Finnish VAT registration |
|---|---|
| You own a Finnish company (Oy or toiminimi) | Mandatory when turnover goes over 20,000 EUR in the current or the previous calendar year, voluntary below that |
| Your company is abroad, has no fixed establishment in Finland and sells to Finnish VAT-registered businesses | Usually not needed: the Finnish buyer reports the VAT (reverse charge) |
| Your company is abroad and its sales are taxable in Finland but the buyer can't take over the VAT: sales to private persons (for example goods located here), to foreign businesses not registered here, passenger transport, or admission to events held in Finland | Needed, unless an EU special scheme such as OSS covers the sales |
| Your company is in another EU country, Finnish turnover up to 20,000 EUR, EU turnover up to 100,000 EUR, registered in the EU small business scheme | Sales in Finland are VAT-free, no Finnish registration |
| Your company is abroad and has a fixed establishment in Finland that takes part in the sales | Needed |
Three details change the answer more often than people expect. The 20,000 EUR small business limit doesn't apply at all to a business based outside the EU (VAT Act, section 3). A business based in another EU country gets the limit only through the EU small business scheme, and only while its EU turnover stays at or under 100,000 EUR (section 3 a). And a company outside the EU and Norway that registers voluntarily needs a representative approved by the Tax Administration whose business is in Finland, and possibly a security (section 173 a; Tax Administration, starting a business in Finland, 6 May 2026).
VAT rates in Finland in 2026
The rates changed three times between September 2024 and January 2026, so older guides are often wrong. These apply in 2026:
| Rate | Applies to (examples) |
|---|---|
| 25.5 % (standard) | Most goods and services (VAT Act, section 84). In force since 1 September 2024, when it rose from 24 %. |
| 13.5 % (reduced) | Foodstuffs, restaurant and catering services, passenger transport, accommodation, medicines, books in print and electronic form, admission to sports and cultural events, and sports facilities and classes (section 85). In force since 1 January 2026; in 2025 the same rate was 14 %. |
| 10 % (reduced) | Newspapers and magazines, in print and electronic form (section 85 a). |
| 0 % | Exports outside the EU and supplies of goods to VAT-registered businesses in other EU countries are VAT-free, and the seller still deducts the VAT on its purchases. |
Important: the exact category of some products can be debated. Check the rate for your own products before your first invoice. A wrong rate found later means correcting every VAT return it went into.
Registering for VAT and how long it takes
A Finnish company registers in the start-up notification at ytj.fi, or later in MyTax (OmaVero). Registration becomes mandatory from the sale that takes the turnover over 20,000 EUR in the calendar year. Registering before that is voluntary.
A voluntary registration starts at the earliest on the day the application arrives. It can't be backdated (Tax Administration guide on VAT-free small business, section 2.4). If the 20,000 EUR limit is crossed in the middle of the year without a registration, VAT is due from the sale that crosses it.
The Tax Administration estimates registrations at three weeks on average, including PRH's part when the registration is filed at ytj.fi (processing times, updated 17 September 2026). In one of our 2026 cases the VAT decision came 23 days after the application. Invoicing before the registration is confirmed is what leads to re-invoicing, so plan the start date.
A foreign company registers with the Tax Administration's registration forms. When its sales are taxable in Finland, it's registered from the start of that business, or already from when it starts buying for it. Once it has registered voluntarily, its sales to Finnish businesses are no longer reverse-charged: it charges Finnish VAT itself.
How often you file and pay
| Turnover (calendar year) | VAT period you can have |
|---|---|
| Over 100,000 EUR | Monthly (the default for everyone) |
| Up to 100,000 EUR | Monthly or quarterly, on application |
| Up to 30,000 EUR | Monthly, quarterly or yearly, on application |
The return and the payment are due by the 12th day of the second month after the period, so January's VAT is due by 12 March. A yearly return is due by the end of February. For a new company the Tax Administration can keep the monthly period for up to a year from the start of the business (Act on the Tax Procedure for Self-Assessed Taxes, sections 11, 12, 15 and 17).
A registered business files a return for every period, also when there were no sales.
What a late return or payment costs
- Late-filing penalty: 3 EUR for each day after the due date, up to 135 EUR. If the return is more than 45 days late, 2 percent of the tax reported late is added (section 36).
- Late payment interest: 9.5 percent in 2026 (Tax Administration).
- Missing return: if it's still missing after a reminder, the Tax Administration estimates the tax and can add a tax increase (sections 37 and 43).
Reverse charge: when the buyer reports the VAT
Normally the seller charges VAT. Under reverse charge (käännetty arvonlisäverovelvollisuus) the buyer reports it instead. Two cases matter to small businesses in Finland:
- Construction services (section 8 c). The buyer accounts for the VAT on construction services, and on staff hired out for construction work, when it sells such services itself or develops property for sale, other than occasionally. It doesn't have to be a construction company: a property maintenance company that regularly bills repair work qualifies too. Reverse charge doesn't apply to sales to private customers or, for example, to a shop having its own premises renovated.
- Purchases from foreign businesses (section 9). If you buy software, advertising or other services from companies like AWS, Google, Adobe or Meta, you usually report the VAT yourself, even though no Finnish VAT appears on the invoice.
A construction invoice under reverse charge shows no VAT. It carries the buyer's business ID (Y-tunnus) and the note "käännetty verovelvollisuus", in English "Reverse charge". More in the Finnish guide on reverse charge in construction.
Selling to consumers in other EU countries: OSS
When a business's sales of goods and digital services to consumers in other EU countries go over 10,000 EUR in the current or the previous calendar year, VAT is due at each customer's country's rate (section 69 m).
Instead of registering in every country, you can report these sales through the One Stop Shop (OSS) with one quarterly return in your own registration country. OSS isn't automatic: you register for it separately.
Deducting VAT on purchases
- You need an invoice with the seller's details and the VAT amount. A receipt without VAT details isn't enough.
- No deduction for representation and entertainment, or for a passenger car unless it's used only for the VAT-able business (section 114).
- No deduction for your own home, including a home office inside it. Equipment you use for the business, such as a computer or phone, is deductible for the business share.
Common VAT mistakes we see with foreign founders
1. Assuming a foreign company never needs Finnish VAT. Sales to private persons that are taxable in Finland, such as goods located here, events held here and passenger transport, need a registration or a special scheme.
2. Registering after the first costs. A voluntary registration can't be backdated, so VAT on early purchases can be deducted only in limited cases.
3. Missing reverse charge on foreign software. The AWS or Adobe invoice shows no VAT, it gets booked as a plain expense, and the VAT return is wrong for months.
4. Using last year's rate. 14 percent became 13.5 percent on 1 January 2026. A restaurant still on the old rate builds an error every day.
5. Invoicing before the registration is confirmed. With about three weeks of processing, plan the date.
6. Skipping zero returns. No sales doesn't mean no return, and the late-filing penalty runs anyway.
7. Spending the collected VAT. It belongs to the state. Keep it separate so the 12th doesn't come as a surprise.
Handling Finnish VAT with us
For our bookkeeping clients the Finnish VAT returns are part of the monthly price: 99, 149, 199, 299 or 349 EUR a month depending on vouchers, VAT 0, and months with no vouchers aren't invoiced. OSS returns and trade across several countries are priced separately before we start. For a foreign company that only needs Finnish VAT handled, without Finnish bookkeeping, we do the VAT registration, the returns and the contact with the Tax Administration for a fixed 1,200 EUR a year. You pay what the price list says. Nothing else goes on the invoice unless we've agreed it with you first.
Not sure how VAT applies to your business?
I handle VAT registration, returns and reverse charge for small businesses and foreign-owned companies across Finland, in English. If you're not sure whether to register or which rate applies, book a free 30-minute call and I'll give you a straight answer.
Phone: +358 41 312 7714
Email: samu@tilitoimistonm.fi
Sources
- VAT Act 1501/1993 (arvonlisäverolaki), sections 3, 3 a, 8 c, 9, 69 m, 84, 85, 85 a, 114 and 173 a, consolidated text in Finlex, checked 7 October 2026: finlex.fi
- Act on the Tax Procedure for Self-Assessed Taxes 768/2016, sections 11, 12, 15, 17, 36, 37 and 43 (VAT periods, due dates and penalties), checked in Finlex on 7 October 2026: finlex.fi
- Tax Administration, Toiminnan aloittaminen Suomessa (starting a business in Finland), VH/2360/00.01.00/2026, 6 May 2026, section 3 on registering a foreign business for VAT: vero.fi
- Tax Administration, Arvonlisäveroton vähäinen toiminta (VAT-free small business), VH/1581/00.01.00/2024, section 2.4 on voluntary registration: vero.fi
- Tax Administration, processing times for returns and applications, registrations three weeks on average, page updated 17 September 2026: vero.fi
- Tax Administration, interest on late payments, 9.5 percent for 2026, read on 7 October 2026: vero.fi
- Our own case: VAT and prepayment register application and decision dates of one client company, 2026.