Finland Raises Standard VAT rate to 25.5%

Finland raises standard VAT rate from 24% to 25.5%, according to budget plans.

In a bid to bolster its finances and navigate economic challenges, Finland is set to raise its standard Value Added Tax (VAT) rate to 25.5% from the current 24 percent.

This increase, outlined in the budget for 2025-2028, is expected to 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.

Concerning the status of the proposal, the draft law is under a comments period. It is expected that the amendment to the Budget proposal is submitted to the parlament by end of May 2024.

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