A sole trader tax return is different from an employee's
For employees, the Finnish tax return is mostly a formality. The Tax Administration pre-fills it based on employer payroll data. Many people don't need to do anything at all.
For sole traders, it's different. You need to calculate your business result yourself, itemise deductions, add YEL contribution details, and complete supplementary forms. It's manageable — but it requires preparation.
When is the deadline?
The deadline for a sole trader's tax return is generally 28 February of the year following the tax year in question.
For example, the return covering the 2025 financial year is due by 28 February 2026. The Tax Administration sends a pre-filled return in early January, and you have until the deadline to review and complete it.
If you need more time, you can request an extension through OmaVero before the deadline. Extensions of a few extra weeks are generally granted.
Late filing results in a late-filing penalty. Mark the date in your calendar well in advance.
What information do you need?
Before opening OmaVero, gather the following:
Business income. All payments received from clients during the financial year. If your bookkeeping is current, these figures come straight from your accounting software.
Deductible business expenses. All business-related costs with receipts — equipment, software, home office, travel, marketing, accounting services, and anything else incurred to generate income.
YEL pension insurance contributions. YEL contributions are fully deductible as a business expense. Request an annual summary from your YEL insurance provider.
Advance tax payments made. How much advance tax you paid during the year. This is visible in OmaVero.
Depreciation. If the business owns fixed assets — computers, equipment, furniture — any depreciation taken must be reported.
How is the sole trader's profit calculated?
The calculation is straightforward:
Business income minus deductible expenses = taxable profit
The profit is what you pay tax on. Private withdrawals (yksityisotot) don't affect the result — they're not expenses and not deductions. Tax is based on what the business earned during the year, regardless of how much you transferred to your personal account.
The taxable profit is then split into two parts:
Capital income portion. 20% of the business's net assets. Taxed at around 30%. For most sole traders with few assets, this portion is small.
Earned income portion. The remainder. Taxed progressively as earned income, alongside any other income you have. This is typically the larger part of the total tax bill.
Which forms are required?
Main tax return form. The Tax Administration sends this pre-filled. You add your business income details.
Supplementary form 5 (elinkeinotoiminnan tulolaskelma). This is the most important attachment. It breaks down business income, deductible expenses, and the result. Required for anyone operating a business.
Supplementary form 6A. Required in certain situations, such as reporting depreciation.
All forms are available digitally in OmaVero.
How does VAT interact with the tax return?
VAT is handled separately from the income tax return. VAT returns are filed independently — monthly, quarterly, or annually depending on your turnover.
In the income tax return, business income is reported excluding VAT. If you're VAT-registered, the VAT your clients pay is not part of your business income for income tax purposes.
Advance taxes and the settlement
If you paid advance taxes during the year, the Tax Administration compares them to your final tax liability once the return is processed.
If your advance taxes were too low, you receive a residual tax bill (jäännösvero). If they were too high, you get a refund.
Residual tax is due within two months of the assessment notice. Coming as a surprise, it can feel large. Reviewing your advance tax level throughout the year — especially if revenue grows significantly — avoids the shock.
NoCFO tracks your business result continuously in the background, so you can check at any point whether your advance tax level is roughly on track.
How do private withdrawals appear in the tax return?
Private withdrawals do not appear in the income tax return as expenses. They are simply money moved from the business to the owner's personal account — they don't reduce taxable profit.
In bookkeeping, withdrawals are recorded in their own account, but for tax purposes they have no effect. Tax is calculated on the full business result.
How does good bookkeeping make this easier?
Filing the return is straightforward when bookkeeping has been kept current throughout the year. All the necessary figures — income, expenses, depreciation — are already in the system. Supplementary form 5 fills in almost by itself.
If bookkeeping has piled up, it needs to be cleared before the return can be filed. That's time-consuming and unpleasant.
In NoCFO, bookkeeping stays current automatically throughout the year: your bank account syncs, transactions are categorised with AI suggestions, and receipts are scanned from your phone as they come in. When tax season arrives, the numbers are already ready.
Frequently asked questions
When is the sole trader tax return deadline in Finland?The deadline is generally 28 February of the year following the tax year. The Tax Administration sends a pre-filled return in early January.
What can a sole trader deduct on their tax return in Finland?All business-related expenses are deductible: equipment, software, home office costs, travel, marketing, accounting services, and YEL pension contributions. Each expense needs a receipt and a clear connection to business activity.
Does a sole trader pay VAT through the income tax return?No. VAT is reported separately to the Tax Administration via VAT returns. In the income tax return, business income is reported excluding VAT.
How do private withdrawals affect a sole trader's taxation?They don't. Taxable profit is calculated from business income minus deductible expenses, regardless of how much has been withdrawn as private transfers.
Are YEL contributions deductible?Yes, fully. YEL contributions are deductible as a business expense and reduce taxable profit directly.
Which supplementary form does a sole trader need?Supplementary form 5 (elinkeinotoiminnan tulolaskelma) is the main one. It breaks down income, expenses, and the result. Completed digitally in OmaVero.
Can a sole trader get an extension on the tax return deadline?Yes. An extension can be requested through OmaVero before the original deadline. A few additional weeks are generally granted.
What is residual tax (jäännösvero) for a sole trader?It's the difference between your final assessed tax liability and the advance taxes you paid during the year. If advance taxes were too low, the Tax Administration bills the shortfall. If too high, you receive a refund.
What is the difference between a sole trader's tax return and an employee's in Finland?An employee's return is largely pre-filled and requires little action from most people. A sole trader must calculate their business result using supplementary form 5, itemise deductible expenses, include YEL details, and declare any advance taxes paid. The process is more involved but fully manageable with good bookkeeping throughout the year.
The short version
The sole trader tax return is due by 28 February each year. It requires calculating business profit using supplementary form 5, splitting the result into capital and earned income portions, and deducting YEL contributions in full. Advance taxes paid during the year are reconciled against the final liability. Keeping bookkeeping current throughout the year makes the process straightforward.
NoCFO keeps your bookkeeping current automatically throughout the year, so tax season doesn't catch you off guard. Get started free →