Key takeaways
- Standard VAT rate in Finland will rise from 24% to 25.5% effective September 1, 2024, pending parliamentary approval.
- Insurance Premium Tax will also increase to align with the new 25.5% rate.
- Sweets and chocolate will move from the 14% reduced rate to the standard 25.5% rate.
- The VAT hike is part of a €3 billion fiscal consolidation plan to keep the deficit below 3% of GDP.
- From January 1, 2025, certain goods and services currently taxed at 10% will increase to 14% (e.g., books, hotels, public transport, cultural events).
- Nappies and tampons will see a VAT reduction from 24% to 14%.
- The VAT registration threshold will rise from €15,000 to €20,000 per year starting January 2025.
- The new threshold applies only to resident businesses; non-residents must register immediately if they engage in taxable sales.
In short: The Finnish government confirmed a rise in the standard VAT rate from 24% to 25.5% from September 1, 2024, subject to approval by Parliament. From January 1, 2025, some items move from the 10% rate to 14%. Finland's VAT registration threshold also rises from €15,000 to €20,000 a year.
Update (October 2026): The 25.5% rate has applied since September 1, 2024, and the €20,000 threshold since January 1, 2025. The 14% reduced rate fell to 13.5% on January 1, 2026. Newspapers and magazines remain at 10%.
When does Finland's 25.5% VAT rate take effect?
The Finnish VAT rate will rise from 24% to 25.5% from September 1, 2024, the Finnish government has confirmed. This is a significant increase. It depends on approval by Parliament. The change will also apply to the Insurance Premium Tax rate, so it matches the new VAT rate. Related reading: New Government of Estonia Plans to Raise VAT to 24%.
Notably, the VAT rate for sweets and chocolate will rise from the current reduced rate of 14% to the new standard rate of 25.5%. Read more in our guide: Estonia Makes Emergency VAT Hike Permanent From July 2025.
The Finnish government first announced the VAT hike on April 16. The Finance Minister pushed for a quick start. The goal was to stop Finland from breaching a Euro membership rule. Under this rule, the government deficit must not exceed 3% of GDP.
The VAT increase is part of a wider plan to generate €3 billion in savings. The plan aims to stabilize Finland's public finances.
Which reduced VAT rates are changing in Finland?
Finland's 14% and 10% reduced VAT rates will stay the same. However, some goods and services will move to a different rate from January 1, 2025.
Items taxed at 10% will move up to 14%. These include books (but not journals or magazines), pharmaceuticals, public transport and hotel services. They also include entrance fees to cultural and sporting events, film screenings, and royalties for television and public radio activities.
VAT on nappies and tampons will fall from 24% to 14%.
More tax increases are expected in 2025. They will target high earners and pensioners to further support the government's fiscal plan.
What is Finland's new VAT registration threshold?
Finland's VAT registration threshold will rise from €15,000 to €20,000 per year from January 1, 2025. The Finnish government has said it plans to raise this annual sales threshold for compulsory VAT registration. For a closer look, see Bulgaria to Lower VAT Registration Threshold from April 2025.
The new threshold applies to businesses whose turnover exceeds €20,000 in the current and previous years.
The Finnish VAT registration threshold only applies to resident businesses. Non-resident businesses with taxable activities, such as domestic sales of goods, must register for VAT right away. Businesses with sales below the new threshold can choose to register for Finnish VAT voluntarily.
How often do you file VAT returns in Finland?
Most businesses file monthly. The VAT return and payment are due on the 12th day of the second month after the period. For example, the February return and payment are due by 12 April.
Smaller businesses can choose a longer tax period:
- Quarterly: if annual turnover is no more than €100,000.
- Quarterly or yearly: if annual turnover is no more than €30,000.
- Yearly: primary producers and visual artists with no other VAT-liable activity, whatever their turnover.
A quarterly return for January to March is due by 12 May. See the Finnish Tax Administration’s tax period rules.
What does this mean for businesses?
According to the Finnish Tax Administration, Finland's VAT rates in 2026 are:
- 25.5%: the general rate, for most goods and services.
- 13.5%: groceries, restaurant and meal services, books, pharmaceuticals, sanitary products, baby nappies, passenger transport, accommodation, and entry to cultural and sports events.
- 10%: newspapers and magazines.
Check that your invoicing and checkout systems use these rates. Take extra care with goods that moved between rates in 2025 and 2026.
Foreign businesses without a permanent establishment in Finland cannot use the €20,000 threshold. They must register as soon as they make taxable sales in Finland. For more detail, see our Finland VAT manual.
How Taxually handles this
Taxually’s CrossTax handles VAT registration, VAT, OSS and IOSS returns and fiscal representation in the countries you sell into, and checks your sales data against 250+ validation rules before each filing. OneTax then pays every tax authority with one bulk payment in your chosen currency.
Related guides
Frequently asked questions
1. When will Finland’s new VAT rate take effect?
The 25.5% VAT rate will apply from September 1, 2024, subject to parliamentary approval.
2. Which taxes are affected by this increase?
Both the standard VAT rate and the Insurance Premium Tax will rise to 25.5%.
3. Are there changes to reduced VAT rates?
Yes. From January 1, 2025, the 10% rate will increase to 14% for items like books, hotels, and public transport.
4. Will any goods see a VAT reduction?
Yes, nappies and tampons will have their VAT reduced from 24% to 14% in 2025.
5. What is the new VAT registration threshold?
The threshold will increase from €15,000 to €20,000 per year starting January 1, 2025.
6. Who must register for VAT in Finland?
- Resident businesses exceeding €20,000 in annual turnover must register.
- Non-resident businesses must register immediately if they conduct taxable sales in Finland.
7. Why is Finland raising VAT?
To stabilize public finances, reduce the budget deficit, and comply with EU fiscal rules limiting the deficit to 3% of GDP.
What are Finland's VAT rates in 2026?
The general rate is 25.5%. Reduced rates are 13.5% (for example groceries, books and passenger transport) and 10% for newspapers and magazines.
When is the Finnish VAT return due?
The return and payment are due on the 12th day of the second month after the tax period. For example, the February return is due by 12 April.
