Accounting, VAT and Tax in Finland 2026: Complete Practical Guide for an Oy

1. Turnover, profit and taxable income are different

Turnover is the company's sales revenue. Profit arises when the costs of running the business are deducted from that revenue. Taxable income is not necessarily identical to accounting profit: under tax law some costs may be wholly or partly non-deductible, and certain adjustments may apply.

This distinction matters in entrepreneur permits, banking and acquisitions. Saying a company has EUR 100,000 turnover does not mean it earned EUR 100,000 profit.

2. Why business expenses need documentation

Paying an expense from the company account does not automatically make it tax-deductible. The business purpose, amount, supplier and VAT details should be documented.

Missing receipts, bank transfers with no explanation, personal purchases and travel costs whose business purpose is unclear all create accounting and tax risk. When the flow of documents is organised monthly, the need to explain things retrospectively at year end shrinks.

3. How does VAT work?

VAT is not tax on company profit. A VAT-registered business charges output VAT on taxable sales, deducts eligible input VAT on business purchases and reports the difference to Vero for the relevant period.

Not every sale carries the same VAT rate, and not every input VAT amount is deductible. International sales, reverse charge, intra-EU transactions, exports, real estate and particular sectors can each have their own rules. So rather than issuing an invoice on a guessed rate, the type of transaction has to be confirmed.

4. Why prepayment tax should be updated during the year

Prepayment tax is paid during the year based on estimated taxable profit. If actual performance differs materially from the estimate, leaving the old estimate unchanged can create a large balancing tax or unnecessary overpayment.

So when turnover and the cost structure change materially, the estimated profit has to be recalculated and the prepayment tax updated through MyTax. The amount of prepayment tax is not the company's performance in itself; it is only a tax payment based on the current estimate.

5. Paying wages involves more than net salary

When a company pays wages, gross salary, income tax withholding, employer contributions, pension and insurance obligations, holiday accruals and other employment costs all have to be calculated together. Net pay is only one part of the total cost that falls on the employer.

Wages must be reported to the Incomes Register on time. Regular employers also submit the employer's separate report monthly. A bank transfer alone is not a complete payroll process.

6. Money movements between shareholder and company

When money moves between shareholder and company, its legal/accounting nature should be clear: capital, loan, expense reimbursement, salary, dividend or another category. The same transfer should not be described inconsistently.

Shareholders making personal purchases on the company card, or withdrawing money from the company without explanation, raises tax and accounting risk in particular. Shareholder current accounts should be followed with regular reconciliations.

7. How to prepare for year-end closing

Year-end is not only an accountant's technical exercise. Confirm receivables, payables, inventory, fixed assets, loans/leases, holiday liabilities, bank/cash, shareholder balances and tax positions.

Missing documents should be completed before the close, and it should be clear between the company and the accountant which set of records is finished. That preparation directly affects the accuracy of the financial statements and the tax return.

8. Common accounting and tax mistakes

Many expensive mistakes come from basic process failures rather than sophisticated tax issues: missing receipts, mixing personal/company funds, wrong VAT treatment, paying wages outside payroll, failing to update prepayment tax and missing PRH/financial-statement deadlines.

A strong accounting system is simple: receive the document, classify it correctly, record it in the proper period, track the deadline and correct deviations quickly.

9. The key 2026 rates and deadlines for an Oy

The corporate income tax rate in 2026 is 20% of taxable profit. In government bill HE 151/2026 the government has proposed lowering it to 18% from tax year 2027; as of October 2026 that is a proposal, not law in force. The corporate tax return (form 6B) is filed within four months of the end of the last month of the financial period, even if the company had no activity.

For VAT, the general rate has been 25.5% since 1 September 2024. On 1 January 2026 the reduced rate fell from 14% to 13.5%; it covers food, restaurant and catering services, books, medicines, domestic passenger transport, accommodation and admission to sports and cultural events, but not alcohol or tobacco. Newspapers and magazines are taxed at 10%. A business whose turnover exceeds EUR 20,000 in a calendar year must register for VAT; the old graduated small-business relief (alarajahuojennus) was abolished on 1 January 2025.

The statutory contributions an employer pays on top of wages in 2026 are these: the TyEL pension contribution averages 24.40% of gross pay, of which the employee's share of 7.30% is withheld from the salary; the employer's health insurance contribution is 1.91%; and the unemployment insurance contribution is 0.31% for the employer on a payroll of up to EUR 2,509,500 and 0.89% for the employee. Accident and group life insurance premiums depend on the insurer. Wages are reported to the Incomes Register within five calendar days of the payment date.

Two fixed points anchor the annual calendar: the financial statements reach PRH within eight months of the end of the financial period, or a late fee of EUR 150, 300 or 600 follows, and the tax return runs on its four-month deadline. Prepayment tax and VAT payments continue period by period regardless of those two dates.

10. Monthly accounting checklist

Completing the following review every month prevents many year-end problems.