Finland operates one of the most digitized tax systems in the world, managed by the Finnish Tax Administration (Vero). However, for international companies, doing business in Finland comes with a unique trap: the “Prepayment Register” (Ennakkoperintärekisteri).
Unlike most EU countries where a VAT number is enough to trade, in Finland, if your supplier is not in the Prepayment Register, you are legally required to withhold 13% (for limited companies) or more from your payment to them. This makes verifying the Y-tunnus (Business ID) and its registry status critical—not just for VAT compliance, but to avoid paying your supplier’s taxes out of your own pocket.
Introduction
The Finnish identifier system is efficient but strict. The core identifier is the Y-tunnus, which serves as the Business ID for everything from patents to tax.
For global enterprises, the challenge is twofold: verifying the 25.5% VAT compliance (a rate increased recently) and ensuring the partner is valid in the Prepayment Register to authorize full payment of invoices.
