What is VAT?
VAT is a consumption tax: you add it to your sales prices, charge it to the customer and remit it to the state. You can deduct the VAT included in your purchases, so in practice you pay only the difference between sales VAT and purchase VAT.
VAT rates 2026
- 25.5% — standard rate (most goods and services).
- 13.5% — e.g. groceries, restaurant and catering services, books, medicines, passenger transport, accommodation, sports and culture (lowered from 14% on 1 Jan 2026).
- 10% — newspapers and magazines.
- 0% — e.g. exports outside the EU.
When is VAT registration mandatory?
You must register for VAT when your turnover exceeds €20,000 in a calendar year (the threshold rose from €15,000 on 1 Jan 2026). The limit is assessed for both the current and the previous calendar year. If you stay below it, you can still register voluntarily.
The small-business relief (alarajahuojennus) was removed on 1 Jan 2025. Use the figures as a guide and confirm your situation with an accountant.
Is voluntary registration worth it?
If your clients are businesses or you make large purchases early on, voluntary registration is often worthwhile: you can deduct the VAT on your purchases. If you sell directly to consumers, VAT raises your prices — weigh the benefits case by case.
How is VAT reported?
VAT is reported and paid in OmaVero. The reporting period depends on turnover: monthly (default), quarterly if turnover is at most €100,000, or annually if at most €30,000. A return must be filed even when there is no VAT to pay.
The most common mistakes
- The wrong rate (e.g. a restaurant or book at 25.5% instead of 13.5%).
- Forgetting deductions on purchases.
- Late returns and payments (late fee and interest).
- Mishandling EU and foreign trade (reverse charge, OSS).
Help with VAT
We handle your VAT returns and advise on the correct rates and registration — in your language. That way you avoid mistakes and late-payment fees.
Frequently asked questions
- Do I have to register for VAT?
- Yes, if your turnover exceeds €20,000 in a calendar year (2026). Below the threshold, registration is voluntary.
- Which VAT rate applies to me?
- Most services and goods are 25.5%. Reduced rates apply e.g. to groceries, restaurants, books and accommodation (13.5%) and to the press (10%).
- How often is VAT reported?
- Monthly by default. Quarterly if turnover is at most €100,000, and annually if at most €30,000.
- Can I deduct VAT on purchases?
- Yes, when you are in the VAT register and the purchases relate to taxable business. Keep your receipts and invoices.
Need help?
We help with setting up your business, taxes and bookkeeping — in five languages.