The standard VAT rate in Finland was raised from 24% to 25.5%, effective as of September 2024. The standard VAT rate applies to all goods and services for which no exemption or reduced VAT rate is provided. As of 1 January 2025, certain changes were made to the list of products and services subject to the reduced VAT rates.

Key changes relating to the reduced VAT rates include:

• Certain goods and services, such as books, medicines, sports and fitness services, entrance fees to certain events, passenger transport services, and accommodation services, which were previously subject to a reduced VAT rate of 10% are now subject to a reduced VAT rate of 14%.
• Certain sanitary products and children’s diapers, previously subject to a 25.5% VAT, are now subject to a reduced VAT of 14%.
• The above changes will not impact the VAT rate for newspapers and public broadcasting services, which will remain at 10%.
• Certain food items high in sugar, such as candy and chocolate, will see a significant VAT rate increase from 14% to 25.5%. This change is scheduled to enter into force on 1 June 2025.

In addition, several changes to the VAT for small businesses entered into force on 1 January 2025, including the following:

• The threshold for VAT liability, i.e. the threshold for minor business activity, rose from a turnover of EUR 15,000 to EUR 20,000.
• The Finnish VAT relief for small businesses (or “the lower limit relief”, which was available for companies whose turnover did not exceed EUR 30,000) will no longer be granted from the beginning of 2025. Companies whose turnover for 2024 does not exceed EUR 30,000 can still request the relief for 2024.
• A new VAT scheme for small businesses was introduced in the EU. Small businesses can now benefit from the VAT exemption for minor activities in another EU member state, provided that the company’s annual turnover does not exceed EUR 100,000 in the EU-area and that the sales do not exceed the national threshold for minor business activity in the EU member states concerned. 

For more information regarding the VAT changes or any other tax-related matters, please do not hesitate to contact Henry Alexander: