Finland Raises Standard VAT rate to 25.5%
Finland raises standard VAT rate from 24% to 25.5%. The new standard VAT rate will be effective by 1 September 2024.
New Standard VAT rate in Finland
In a bid to bolster its finances and navigate economic challenges, Finland approved the raise of its standard VAT rate to 25.5% from the current 24 percent.
This increase, outlined in the budget for 2025-2028 is already approved by the Finnish Parliament, and will come into effect by 1 September 2024. The decision to increase the standard VAT rate reflects the government's efforts to stabilize public finances.
Additionally, certain food items high in sugar, like chocolate, will see a significant VAT increase from 14 percent to 25.5 percent. Soft drinks, tobacco, and select alcoholic beverages will also face additional levies.
Nevertheless, the government has opted to maintain the 14 percent VAT rate for other food products and restaurant meals. Similarly, there will be no changes to the 10 percent rate applied to medicine, accommodation, books, and cultural events.
Have a look at our overview of current VAT rates in Finland.
New VAT Return Form in Finland
If you are filing Finish VAT returns in a paper form, you will need to continue using the current VAT return form, including all sales to 24% and 25.5% in the same box (Domestic sales 24%).
In case you are filing Finish VAT returns online, there will be available a new space to include domestic supplies at 25.5% starting 1 September 2024. For the Q3 2024 VAT return, period including sales at both standard VAT rates, the amounts should be entered in the corresponding boxes for 24% or 25.5%.
Finish tax administration released general guidelines about the VAT rate change and the reporting consequences.