VAT rates in Finland explained: what every small business owner needs to know

VAT (Value Added Tax, arvonlisävero) is a tax related to consumption. VAT rates determine what percentages of value-added tax must be paid on various goods and services. The informative table below contains examples of which VAT rates are applied on different types of goods and services.

1. The general VAT rate 25.5%

This rate is applied on most goods and services.

Examples:

• alcohol and tobacco products

• building supplies

• clothes and footwear

• cosmetics

• household items

• new vehicles

• publications containing music or video, video games

• sports equipment

• tap water

• accounting services

• car and bicycle repair

• cleaning services

• coaching services

• construction services

• hairdressing services

• shoe repair.

2. Reduced VAT rate 14%

Examples:

• groceries

  • including food, beverages and food ingredients, spices, chemicals used to stop food from decaying

• animal feed including related substances

  • feed includes animal feed, feed mixtures and their ingredients and additives intended for making feed, industrial byproducts used as feed, and fish used as feed

• restaurant services (meals consumed at seller’s business premises)

• meal services (meals supplied to premises chosen by the buyer)
  

Note: The reduced VAT rate of 14% is not applicable to supply of alcohol, supply of tobacco products, serving of alcoholic drinks.

The following goods and services also have 14% VAT in 2025:

• books (printed and electronic)

• pharmaceuticals

• sanitary protection products, baby diapers

• supply of sports/fitness service incl. gym, golf and ice rink bookings, and sale of ski lift tickets

• admittance to cultural, entertainment or sports events, such as theatre, circus, fairs, amusement parks, concerts, museums, zoos, cinemas or exhibitions, and live streaming of such events

• passenger transport services (taxi, buses and coaches, trains, flights in Finland)

• accommodation (hotels, motels, hostels, farm stays, camping sites for tents, camper vans or trailers, and cottage rental)

• fees received by a performing artist, athlete or other public performer, if the recipient is registered for VAT for these activities.

3. Reduced VAT rate 10%

• newspapers and magazines (print and electronic publications)

• public broadcasting

Note: sales of electricity, 1 Dec 2022—30 Apr 2023. However, sales of electricity transmission and access services to the electric power grid were subject to the 24-percent VAT rate.

4. Zero rate 0%

Purchases made by business enterprises are VAT-deductible.

• sales, rental and chartering of vessels specified in the VAT Act, and work performed on such vessels

• tax-exempt sales of editions of membership bulletins to non-profit organisations

• tax-exempt sales relating to warehousing procedures (tax warehouse in VAT)

• exports outside the EU

• sales of goods within the EU to VAT-liable buyers (guidance on VAT in EU trade)

• other tax-exempt sales of goods and services relating to international trade, such as the transport of passengers or goods by direct flight outside the EU.

Note: passenger transport services provided in Finland, from 1 Jan 2023 to 30 Apr 2023 (including taxis, train, bus, air travel and maritime passenger transport).

Business operations exempt from VAT

The sales of certain goods and services are exempt from VAT (such as healthcare and medical services). Purchases made by business enterprises are not VAT-deductible.