tulotilit

Tulotilit are a specialized banking arrangement used in Finland to manage income and tax prepayments for self-employed individuals and small businesses. A tulotili is a dedicated account into which business income is deposited and from which mandatory prepayments of taxes and social security contributions can be made. The system is designed to separate private funds from business funds and to provide a clearer, more predictable way to meet tax obligations.

How it works in practice: Entrepreneurs open a tulotili through a participating bank as part of the tax process. The bank and the Finnish Tax Administration coordinate to handle monthly or periodic prepayments, which may cover estimated income tax, value-added tax (VAT), and social security charges. Money stays in the tulotili until it is used for these tax payments, helping with cash flow planning and reducing the risk of missed deadlines or arrears.

Benefits and purposes: By earmarking funds for taxes, tulotilit aim to simplify bookkeeping, improve financial discipline, and create an auditable trail for tax authorities. They can also provide a clearer separation between business and personal funds, which supports compliance and financial management.

Limitations and scope: The tulotili concept is not universally offered by all banks, and terms or fees can vary. Availability may depend on the business structure and eligibility criteria set by banks and the tax authority. It is an optional tool rather than a mandatory requirement for all entrepreneurs.

See also: Finnish Tax Administration (Verohallinto), VAT, tax prepayments, bookkeeping.