A private trader can benefit from the VAT relief provided by the tax office when their net sales are low.
The relief is available to entrepreneurs and companies who are registered for VAT and whose net sales for the accounting period (12 months) are less than 30,000 euros.
If the net sales are up to 15,000 euros, the VAT relief can be obtained from the VAT payable for the entire financial year.
In the UKKO private trader -service, the VAT relief is automatically calculated for those users who are entitled to it. And therefore, the user does not have to worry about requesting it by themselves.
The VAT relief is the entrepreneur’s taxable income and is reported in the income statement for the year as it is requested for. This means that for example in the case of VAT relief for 2023, the VAT relief is requested for and paid in February 2024, and it is reported in the 2024 income statement.
When is VAT relief not granted?
Getting the VAT relief can be affected by a few things listed below:
- The VAT relief cannot be given if the financial year is negative, meaning that the amount of VAT included in the purchases is higher than the amount of VAT paid on sales.
- The VAT relief is not available when net sales consist of activities that are not qualified for the VAT relief. Such activities include, for example, the sale of services outside Finland and the sales of fixed assets.
- The VAT relief cannot be given when the company is regarded as a foreign resident with no permanent establishment in Finland.
How to request for the VAT relief?
The VAT relief can be requested either on the final VAT return for the calendar year or for the accounting period.
The following information needs to be included:
- net sales qualifying for the relief
- amount of VAT qualifying for the relief
The length of your business tax period determines when the VAT relief is requested for.
Tax period can be:
- Month – the relief is requested on the VAT return for the final month of the accounting period
- Quarterly – the relief is requested on the VAT return for the final quarter (October-December) of the calendar year
- Year – the relief is requested on the VAT return for the calendar year
You can find more information about this from the tax administration’s website: https://www.vero.fi/en/businesses-and-corporations/about-corporate-taxes/vat/vat-relief-scheme/