What are VAT-deductible expenses?

In sole trader (toiminimi) bookkeeping, VAT-deductible expenses are those expenses related to your business for which you can deduct the VAT paid on the purchase from your VAT liability on sales. In practice, this means that VAT on purchases related to your business activities can be credited, as long as the receipts and vouchers are in order in the bookkeeping.

How does the VAT deduction work?

When a customer pays you the price of a product or service, the VAT included in it must be remitted to the Finnish Tax Administration. At the same time, you have the right to deduct the VAT paid on purchases, when the purchases relate directly to your business. Truster takes care of filing the VAT returns and reporting the deductions for you, once you submit vouchers that qualify for the bookkeeping.

What kind of receipt qualifies for a VAT deduction?

A receipt or voucher that entitles you to a VAT deduction must include the following information:

• VAT breakdown: Unit price, the amount of tax, and the tax rate used.
• Seller's details: The seller's name, address, and Y-tunnus. Of these, the Y-tunnus is mandatory.‍
• Business connection: The purchase must relate to your business activities. For example, work equipment and office supplies are deductible, but your own lunch is not.
• Identification: The purchase date and a description of the goods or services purchased.

A bank statement excerpt or a mere payment receipt alone is generally not sufficient as a VAT voucher, since these typically lack the seller's Y-tunnus and the tax rate used. All receipts and vouchers must be kept for the period required by law, in case the Tax Administration ever requests them.

You can find more information about VAT deductions and voucher requirements on the Finnish Tax Administration's website.

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