Investco Texts - A Limited Company as an Investor's Tool

[Investco_Sampsa]

@excolo

I might join the discussion, but it’s interesting to know how this works. Many surely have some side business through a holding company, but how should its VAT be viewed?

If my company conducts small-scale business subject to VAT, let’s say consulting.

Since I have estimated this business to be around 15k per year, I haven’t felt it necessary to register for VAT. There are many reasons, but mainly because customers cannot deduct it. So, I bear the VAT.

In addition to the VAT-liable business, the company engages in occasional securities trading. Since these are not financial assets but inventory, this affects turnover.

I’m wondering if the company’s securities trading affects the VAT exemption for small-scale business or the turnover calculated for it?

As an example:

On 1.1.2025, I invoice for 4,999 € + 0% VAT.

On 1.2.2025, I buy shares for 10,000 € which I sell on 1.3.2025 for 15,000 €. The shares are recorded as inventory.

Is the turnover considered when calculating small-scale VAT-liable activity at this point 4,999 € or 19,999 €?

I agree with Jackkk that the answer is 4,999 €. This has been clarified; section 2.2 of the Tax Administration’s guidance lists sales included in turnover, and in my view, securities trading conducted on one’s own account is not considered sales of financial and insurance services. A written ruling was once sought from the Tax Administration regarding the VAT threshold relief. When securities are sold, it is not a sale of a service.

• sales of financial and insurance services (VAT Act sections 41 and 44)

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