In guidance published on 15 January 2025, the Verohallinto informed entrepreneurs and accounting professionals of significant changes to Finland’s reduced VAT rates, effective 1 January 2025. Under the reform, most goods and services previously taxed at the 10% VAT rate were transferred to the 14% reduced VAT rate.
As a result, the 14% rate now applies to a broader range of supplies, including:
accommodation services,
sports and exercise services,
admission fees to cultural, entertainment and sporting events,
passenger transport, and
medicines and books.
The change represents a substantial restructuring of Finland’s reduced VAT rate system and affects a wide range of consumer-facing sectors. The Tax Administration clarified that the reform does not apply to newspapers, magazines or broadcasting services, which remain subject to the 10% VAT rate. These supplies therefore continue to benefit from the lower reduced rate despite the broader increase.
The guidance emphasises that businesses must ensure their pricing, invoicing and accounting systems reflect the updated VAT rates from the beginning of 2025. The Tax Administration recommends reviewing VAT classifications carefully, particularly for businesses supplying multiple categories of goods or services previously taxed at different reduced rates.
