What is the prepayment register and how do I join it?

The prepayment register is a register maintained by the Finnish Tax Administration. Being included in the register means that you take care of your business taxes yourself. When your private trader business is included in the prepayment register, your customers can usually pay your invoices in full without withholding tax.
 

Why should I join the prepayment register?

When you are included in the prepayment register:

• your customer can pay your invoice in full
• your customer does not need to withhold tax from your invoice
• you take care of your business taxes and advance taxes yourself
• being included in the register can make it easier to get assignments.

Joining the prepayment register is not mandatory. However, it may be more difficult for customers to purchase your services if you are not included in the register.
 

How do I join the prepayment register through the UKKO Entrepreneur service?

If you set up a private trader business through the UKKO Entrepreneur service, we will register your business in the prepayment register on your behalf.

Wait for the Finnish Tax Administration to process the notification.

Depending on the Tax Administration’s processing times, the registration decision may take approximately 1–4 weeks.

You can follow the progress of your registration in the YTJ service.

Once your business has been entered in the register, the information will be visible in the YTJ service. You will also receive the decision in MyTax.

If you register with our service using an existing Business ID and your business is not included in the prepayment register, you can apply for registration in MyTax. See the instructions: How to get the registration for your company.
 

What happens if I am not included in the prepayment register?

If you are not included in the prepayment register, your customer usually has to withhold tax from the work or service compensation they pay you and remit the withheld tax to the Finnish Tax Administration.

If an invoice includes both work and goods, withholding tax applies to the portion covering the work. Withholding tax is usually not made on the sale of goods alone or on rent.
 

Also remember tax prepayments

Being included in the prepayment register does not mean that your taxes are taken care of automatically. You must apply for prepayment tax yourself and pay it during the year based on the result of your business activities.

Read more: How to request and pay tax prepayments for income taxation?

The prepayment register and the VAT register are two different registers:

• the prepayment register concerns income tax and withholding tax
• the VAT register concerns adding VAT to your sales price, VAT deductions and VAT returns.
   

How to prepare for tax prepayments

• Monitor your business income and expenses throughout the year.
• Set aside money in your business account for prepayment tax payments.
• If necessary, keep money related to VAT separate from your other business funds.
• Update the amount of your prepayment tax in MyTax if your income or expenses change from what you previously reported.
• Consider your upcoming business expenses and taxes before making private withdrawals.

A private trader does not pay themselves a salary. Money withdrawn from the business account for your personal use is a private withdrawal, not a business expense. A private withdrawal does not reduce the taxable result of your business activities.
 

Final taxation and back taxes

The final taxation of your business activities is based on your actual income, expenses and deductions. If the advance tax you paid during the year does not correspond to the final amount of tax, you may either receive a tax refund or have to pay back taxes.

Back taxes arise if you have paid too little advance tax. Updating your advance tax during the year helps reduce the risk of back taxes.
 

Frequently asked questions

Is joining the prepayment register mandatory?

No. However, joining the register is recommended because otherwise your customer may have to withhold tax from your invoice.
 

Do I have to join the prepayment register myself?

If you set up a private trader business through the UKKO Entrepreneur service, we will register you on your behalf. In other cases, you can apply for registration in MyTax.
 

Where can I check whether my private trader business is included in the prepayment register?

You can check your registration details in the YTJ service. The registration decision is also available in MyTax.
 

Do I need to record tax prepayments in my bookkeeping?

We recommend recording advance tax payments in your bookkeeping. You can attach the advance tax decision or advance tax invoice from MyTax to the transaction. In exceptional cases, a payment receipt may also be accepted.

According to the Finnish Tax Administration, recording advance tax payments is not mandatory in single-entry bookkeeping. However, we recommend doing so because it helps you keep track of your business’s overall financial situation. Recording advance tax payments allows you to see the result after taxes on your income statement.

You can easily add an advance tax payment as an expense in your UKKO customer account. Select Taxes as the transaction type and Advance tax as the specification.
 

Do I pay tax on all the money paid into my business account?

No. Taxation is based on the taxable result of your business activities, not directly on the amount of money paid into your business account. Your taxable result is affected by your business income, deductible expenses and other information relevant to taxation.
 

Can I withdraw money from my business account for my personal use?

Yes, you can make private withdrawals. However, first take your upcoming expenses and taxes into account. A private withdrawal is not a business expense and does not reduce the taxable result of your business activities.
 

What should I do if my tax prepayment is too high or too low?

Update the amount of your advance tax in MyTax. First reassess your business income and expenses for the entire year so that the updated prepayment tax better reflects your actual situation.
 

If you need help

If your prepayment registration is not visible in the YTJ service within approximately 3–4 weeks, contact the Finnish Tax Administration’s customer service to find out the status of your registration.