1.5% VAT rate rise to 25.5% on 1 September 2024; reduced rate increases Jan 2025
Finland has increased its standard Value Added Tax rate to 25.5% on 1 September 2024. The 10% and 14% reduced rates will remain the same, but there will be upward reclassifications of supplies on 1 January and 1 June 2025 (see below). The Insurance Premium Tax rate has also risen to 25.5% today.
The Finance Minister introduced the tax increase to ensure compliance with the Euro currency membership rule of government deficits not exceeding 3%. The VAT rise comes with other savings to raise €1 billion.
This puts Finland as the second highest VAT rate in the EU – Hungary is at 27%.
There will also be upward classifications of certain reduced VAT rate supplies in January and June 2025.
This VAT hike was part of the 2025 Budget which contains an April-announced increase. The government will confirm the budget in early September for parliamentary approval with as 23rd September Ministerial Finance Committee meeting and in a plenary session of the government.
Finlands VAT registration threshold rises to €20,000 on the same date.
1 January 2025 reduced rate rises
The 14% and 10% reduced VAT rates will remain unchanged, buyer there will be a reclassifications announced last year as follows:
From 10% to 14%
- Books (not journals or magazines)
- Hotel services
- Public transport
- Pharmaceuticals from 10%
- Entrance to cultural & sporting events
- Film screenings
- Royalties for television and public radio activities
From current 24% to 14%
- Tampons
- Nappies
1 June 2025 confectionary VAT rise
From 1 June 2025, the sale of confectionary and chocolate will be shifted from the reduced VAT rate of 14% to the new standard rate of 25.5%
Completing Finnish VAT return with increased 25.5% rate
When the VAT taxpayer’s tax period is the month, the VAT return in the Finnish MyTax will display the following space starting 1 September 2024: “VAT on domestic sales by tax rate: 25.5% VAT”.
When the tax period is the quarter or the tax period is the calendar year, the new VAT rate will enter into force part way through the tax period.
For those with the quarterly tax period, MyTax will display the year’s third tax period’s VAT return 3/2024 — July, August and September — as follows: “VAT on domestic sales by tax rate: 25.5% VAT”.
For those filing and paying VAT once a year, MyTax will display the 2024 calendar year’s VAT return as follows: “VAT on domestic sales by tax rate: 25.5% VAT”. When you report VAT on sales for the above tax periods, these spaces on the VAT return must be used although your actual VAT has in fact been 24%.
Filing VAT through other electronic services than MyTax and filing VAT on paper
Whenever the VAT rate is the general rate, you will need to fill in the spaces as explained above when using other e-services (www.ilmoitin.fi and the API interface) to send your VAT return. This means that although the VAT percentage rate is different, you fill in same space as before.
As for the paper VAT return, the Tax Administration will release an updated version as of 1 January 2025. Up to the end of 2024, the paper form available today will continue to be used. All sales with both the 24% and the 25.5% rates must be entered into the same space on the form (Domestic sales 24%).
Public debt relative to GDP has more than doubled since 2008. In 2024–2026, economic growth will remain sluggish for cyclical reasons, and even the longer-term outlook for growth will not provide relief for fiscal problems.
The neighbouring countries of Norway, Sweden and Denmark, with similar advanced economies, all have VAT rates of 25%. Read more in our Finland VAT guide.
Other tax rises in 2025 are likely to be on high-earners and pensioners.
Jan 2013 – VAT rise to 24% Euro crisis cripples government finances
Finland’s VAT rate last rose in 2013. It joined most of the rest of Europe with a rise in its standard VAT rate to help manage the long-term effects of the 2007/08 financial crisis and subsequent Euro-currency crisis.
The primary Value Added Tax rate increased from 23% to 24% on 1 January 2013. The rate last rose, from 22% to 23% in July 2010.
The reduced VAT rates of 9% and 13% also increased to 10% and 14%, respectively.
Other countries forced into austerity VAT rate changes include: UK, Romania, Poland, Ireland, Hungary, France, Spain, Greece, Czech Republic.
VAT Calc’s global VAT and GST rates checker provides live indirect tax rates from around the world.
