There are two types of taxes that private trader needs to pay: tax prepayment and VAT. These different types of taxes are described in more detail below.
A tax prepayment is a tax you pay in advance on your business’s profit estimate. You will need to provide the yearly profit estimate of your company to the Tax Administration. This ensures that you do not have to pay taxes at once, but you can pay taxes in installments throughout the year. A Tax Administration informs then you how much you need to pay taxes. You will get those prepayment tax invoices either to your home or the MyTax service.
You must therefore provide the yearly profit estimate of your company to the Tax Administration. You can do it in MyTax (OmaVero) or by calling the Tax Administration. Be sure to update your profit estimates if it changes significantly in one direction or another.
We also recommend adding an invoice for tax prepayments to our system as an expense. The receipt is either a tax prepayment invoice or, exceptionally, a receipt for a money transfer. According to the Tax Administration, it is not mandatory to record prepayment taxes in single-entry bookkeeping, but we recommend it as it will help you to see better the overall financial situation of your business.
Value-added tax (VAT)
UKKO Entrepreneur will file VAT returns for you if you are liable for VAT. We will send you an email after we have filed your VAT return. This will be done monthly, quarterly, or yearly depending on the length of your VAT period. We will also automatically calculate the possible VAT relief on your last VAT report for the financial year.
Once we have prepared your VAT return, we will send you an email telling you how much tax is due. This message also includes the due date for taxes and payment information, which you can also see from MyTax (OmaVero) if necessary.
Sometimes your deducted VAT on your expenses is higher than the VAT you should pay. In these cases, you do not need to pay VAT for that VAT period. This is also mentioned in the emails we send you after filing your VAT return. So read the message carefully to see the final amount to be paid. You can also see the amount from MyTax after the VAT return has been filed.