VAT invoice for a small business: how to do it right
8 July 2026 · 5 min read
Value added tax is the part of an invoice where many small business owners hesitate. The basic idea is clear, though: the invoice shows the price without tax, the tax rate and the amount of tax separately, and the total includes the tax. Here is a practical guide.
Tax rates in brief
Finland's standard value added tax rate is 25.5 percent. Some goods and services have reduced rates, for example food and certain services. Use the correct rate for each line.
How VAT is calculated
If the price without tax is 100 euros and the tax rate is 25.5 percent, the tax is 25.50 euros and the price with tax is 125.50 euros. If instead you know the price with tax and want to separate the tax, divide the price with tax by 1.255 to get the price without tax.
- Price without tax: the price excluding VAT
- Tax rate: the VAT percentage, for example 25.5 %
- Amount of tax: the price without tax times the tax rate
- Total: the price without tax plus the tax
When VAT is not added
If you are not liable for value added tax or the sale is tax-free, no VAT is added to the invoice, but it is good to state the reason. Reverse charge, for example in the construction sector, also changes who accounts for the tax. Check your own situation if you are unsure.
Avoid these mistakes
- The wrong tax rate on a line
- Tax calculated from the price with tax instead of the price without tax
- The amount of tax missing from the invoice entirely
- Rounding errors when there are many lines
The easiest way to avoid VAT mistakes is to let the software calculate the tax. In Haimoo Invoice you enter the price without tax and the tax rate, and the total and the amount of tax are calculated automatically and correctly for every line.