The VAT register and prepayment register - What are they?

The VAT register

As the name suggests, the VAT register is the register of all businesses and other legal entities that are liable to pay value added tax (VAT). You can check the VAT registration status, and other the public information of any business in Finland in the YTJ-service (The Business Information System) by searching their business ID or registered business name. 

When a company is liable for VAT, it adds value-added tax to the total amount of the invoice, and the light entrepreneurship service withholds and remits the VAT to the tax authorities. When a business is in the VAT register, they can deduct the amount of VAT of their business expenses. If you are using UKKO Light Entrepreneur with Business ID service and are in the VAT register, declaring VAT is done by us as a part of the service. 

From 1.1.2025 onwards we do not send an application for the VAT register automatically if you create your business ID via UKKO Light Entrepreneur with Business ID -service. This is no longer required, as the VAT relief for small businesses is no longer available and the threshold for VAT liability rose from 15 000€ to 20 000€.

We will notify you about joining the VAT register in MyTax when your annual turnover is closing in the 20 000€ threshold. When the registration is done in time, you do not have to pay VAT retroactively. 

Businesses that are not registered in the VAT register use the VAT rate of 0% for small-scale businesses on their invoices. They do not need to declare VAT reports or pay VAT to the Tax Office. Businesses that are not registered in the VAT register cannot apply for VAT deductions of their business expenses. 

The Prepayment Register

The prepayment register is kept by the Tax Office and shows that a business is taking care of their taxes. If a business is not in the prepayment register the client paying for the service must take care of paying taxes. Prepayment taxes are paid from the businesses profit. Please note that using the UKKO Light Entrepreneur service with a Business ID requires that you are registered in the prepayment register. You can read more about the prepayment register and taxes at the Tax Office's website here!

All businesses created via UKKO Light Entrepreneur with Business ID service are automatically applied for and registered to the prepayment register. So if you create your business ID while registering to our service, you do not need to worry about the prepayment registration. Please take in mind that the registration process with the Tax Office may take around 2 to 3 weeks. You can follow the process yourself on MyTax and YTJ-service, if you want to.