Finland will reduce its reduced value added tax (VAT) rate from 14% to 13.5% as of 1 January 2026. The change applies to goods and services currently subject to the 14% reduced VAT rate. Goods and services covered by the reduced rate change The reduced VAT rate of 13.5% will apply, among others, to:
• Foodstuffs
• Restaurant and catering services
• Animal feed
• Sports and cultural activities, including sports services, event admission tickets, and use of sports facilities
• Books (printed and electronic publications)
• Medicines
• Passenger transport services
• Accommodation services
In addition, broadcasting services of the national public broadcaster will be subject to the 13.5% VAT rate, instead of the previously applied 10% rate. VAT rate determined by supply date or service performance
The applicable VAT rate depends on when the goods are delivered or the services are performed:
• For goods, the VAT rate is generally determined by the delivery date, i.e. when the goods are transferred to the customer’s possession
• For services, the decisive factor is usually the time when the service is performed, meaning when the service is available to the customer
Advance payments
An advance payment is a payment received by the seller before the goods are delivered or the service is performed. In cases where the VAT rate changes, the applicable rate for advance payments depends on when the payment is at the seller’s disposal. If the advance payment is received before 1 January 2026, the VAT rate in force at the time of receipt applies, even if the goods or services are supplied after the rate change.
Legislative background
The VAT rate change is based on Government Proposal HE 93/2025, which amends the Finnish VAT Act.