Bookkeeping for a Finnish association (ry): what the law requires (2026)

Who is responsible for the books?

Under the Accounting Act (kirjanpitolaki), an association is obliged to keep books, and under the Associations Act (yhdistyslaki) its financial statements are prepared in accordance with the Accounting Act. The board must ensure that the bookkeeping complies with the law and that the finances are managed reliably. The law does not require an accounting firm: the association’s own treasurer (rahastonhoitaja) may keep the books. The board, however, is always responsible.

Small association: simplified accounts

If the association’s grants and other income totalled at most €30,000 in both the financial year just ended and the one before it, and the association carries on no business, it may keep simplified accounts (kevennetty tilinpito) and does not have to prepare financial statements under the Accounting Act. Simplified accounts are provided for in the rules, or the general meeting may decide on them without amending the rules, with the same majority and notice of meeting that a rule amendment requires. An association registered less than two years ago is deemed to be under the limit unless it is evident that the limit will be exceeded.

• Income, expenses, assets and liabilities are kept separate, and transactions are recorded on a cash basis, in chronological order and without undue delay.
• An up-to-date list of assets and liabilities is kept at all times, and the accounts must provide the information needed to meet any tax obligations.
• Invoices, receipts and other material are kept for six years after the end of the calendar year they concern.
• On request, a member may inspect the accounts once for each ended calendar month. If the rules restrict this right, an annual statement (vuosilaskelma) is prepared and presented to the members within six months of the end of the financial year.

Financial statements within four months

Other associations prepare financial statements under the Accounting Act (tilinpäätös) for each financial year (tilikausi): a balance sheet (tase), an income statement (tuloslaskelma) and notes (liitetiedot). They must be prepared within four months of the end of the financial year.

The general meeting adopts the financial statements or the annual statement and decides on discharging the board from liability (vastuuvapaus). The financial statements do not have to be filed with the Finnish Patent and Registration Office (PRH) unless the association is larger than a small company (pienyritys).

Operations auditor or auditor?

An auditor (tilintarkastaja) need not be elected if, in both the financial year just ended and the one before it, no more than one of the following conditions was met: a balance sheet total over €100,000, turnover or equivalent income over €200,000, more than three employees on average. The rules may still require an audit. If the association has no auditor, it must have an operations auditor (toiminnantarkastaja).

• The operations auditor must be a natural person with sufficient knowledge of financial and legal matters in view of the association’s activities.
• The operations auditor must be independent when carrying out the review.
• If only one operations auditor is elected, a deputy (varatoiminnantarkastaja) must also be elected.
• The operations auditor reviews the association’s finances and administration to the extent its activities require and gives a written report (toiminnantarkastuskertomus) to the meeting that decides on the financial statements.

Income tax of a non-profit association

A non-profit association (yleishyödyllinen yhdistys) pays income tax only on business income and on income from real estate if the property has been used for purposes other than general or public benefit. An association that does not qualify as non-profit is taxed on all its income. The tax rate on business income is 20%.

Tax-exempt income includes membership fees, donations and grants received for non-profit activities. Income from the association’s own events – such as raffles, bazaars and sports competitions – is in principle also tax-exempt if it is raised to fund non-profit activities and the activity does not have the characteristics of a business. If the association, for example, regularly provides catering at other organisers’ events, that is usually business.

The key point for bookkeeping: income and expenses from non-profit activities, fundraising (varainhankinta), business and real estate must be kept separate both in the books and in the tax return. When this is done document by document throughout the year, the financial statements and the tax return are ready without after-the-fact detective work.

When must an association file a tax return?

The tax return (form 6C) is filed in MyTax (OmaVero) no later than 4 months after the end of the financial year if the association:

• received taxable income during the tax year
• sold or bought real estate during the financial year
• received a positive decision on tax relief (veronhuojennus)
• is non-profit and its activities or fundraising have changed substantially compared with the previous tax year.

A tax return must also always be filed if the Tax Administration (Vero) asks for one. A report of activities (toimintakertomus) or another free-form description of the association’s activities must always be attached to the tax return.

VAT in an association

A non-profit association is liable for VAT only on sales made as a business. Small-scale activity stays outside VAT: if the turnover of the business activity is at most €20,000 in both the current and the preceding calendar year, the association does not need to register for VAT because of its sales. Only sales treated as business in income taxation count towards the threshold. If the threshold is exceeded during the year, VAT is payable from the moment it is exceeded. For goods and services bought from abroad, however, the association may have to pay VAT in Finland as the buyer.

When the association pays wages, fees or compensation

Wages, fees and compensation paid by the association – for example meeting fees and fees to board members – are reported to the Incomes Register (Tulorekisteri) with an earnings payment report under the association’s Business ID (Y-tunnus), as a rule within 5 days of the payment date. One-off payments of up to €200 are reported monthly, by the 5th day of the following calendar month. If the association has paid wages, it also files an employer’s separate report for that month. Compensation for work (työkorvaus) is reported only if the recipient is not in the prepayment register (ennakkoperintärekisteri). For taxable payments, the association fulfils the payer’s obligations, such as tax withholding (ennakonpidätys).

A volunteer who acts on the instructions of a non-profit association and receives no wages or fees for the work can receive, tax-free:

• a daily allowance for at most 20 days per calendar year
• accommodation compensation
• public transport costs against receipts, with no euro limit
• kilometre allowances of up to €3,000 per calendar year.

A travel expense claim (matkalasku) must always be made, and otherwise the conditions for tax exemption are the same as for employees. Daily allowances and kilometre allowances are reported to the Incomes Register by the 5th day of the month following the payment month, even though they are tax-exempt; reimbursements based on a carrier’s receipt, such as a train ticket, are not reported. If a member buys something on behalf of the association and is reimbursed against the receipt, the reimbursement is not taxable and is not reported to the Incomes Register.

Help with association bookkeeping

We keep associations’ books or simplified accounts so that the different activities stay separated throughout the year. We prepare the financial statements or the annual statement for the meeting and, when needed, the tax return and the Incomes Register reports. Our accountants serve you in Finnish or Russian.

Official sources

• Finlex: Associations Act – yhdistyslaki (in Finnish)
• Finlex: Accounting Act – kirjanpitolaki (in Finnish)
• Finlex: Auditing Act – tilintarkastuslaki (in Finnish)
• Vero: income taxation of non-profit organisations
• Vero: tax return of an association (in Finnish)
• Vero: VAT of non-profit organisations (in Finnish)
• Vero: payments and reimbursements to volunteers (in Finnish)
• Incomes Register: associations
• Incomes Register: deadlines for reporting