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Changes to taxation in 2024

Table of contents:

Decrease to deduction for commuting expenses

The deduction for commuting between home and work will decrease in 2024 because its threshold is raised from €750 to €900 and the temporary increases to the deduction will no longer be in effect. The maximum amount of the deduction will be €7,000 (compared to €8,400 in 2023). 

If you have been unemployed or on family leave for a part of the year, the general threshold for commuting expenses is reduced by €80 for each full benefit month (€70 per month in 2023). However, the minimum threshold amount is always €160.

Further information: Commuting expenses

Increase to tax-exempt reimbursements of travel expenses

The amount of the full tax-exempt daily allowance for domestic travel will be €51 (€48 in 2023), the partial daily allowance will be €24 (€22 in 2023), and the meal allowance will be €12.75 (€12 in 2023).

The tax-exempt kilometre allowance will be 57 cents per kilometre (53 cents in 2023).

Further information:

Value of fringe benefits in 2024

The Tax Administration has issued the annual decision on the value of fringe benefits. The decision confirms the values of the most common fringe benefits, including employer-provided accommodation, company car, meals, and telephones. Fringe benefits received from the employer are treated as wages in the employee’s tax assessment. The taxable value of each type of benefit is determined in the Tax Administration decision on fringe benefits.

The decision states that the meal benefit can still be used to cover meal delivery costs, as well. The values of the car benefit have been changed due to the increase in interest rates and in the index of earnings as well as the decrease in the price of electricity. The decision has been clarified to confirm that the telephone benefit also covers the costs of telecommunications connections.

Further information:

Increases to tax credit for household expenses will remain in force, tax credit for electricity to be discontinued

You can continue to claim increased credit for household expenses for household work, nursing and care in 2024. For these types of work, the maximum deduction is €3,500. The credit amount is 60% of trade income and 30% of wages.

Starting in 2024, the scope of the credit for household expenses will be expanded to cover physical and occupational therapy. You can claim the credit for physical or occupation therapy you receive in your home. In 2024, you can also claim the increased credit for these services.

You can also claim increased credit for household expenses relating to the replacement of oil heating until 2027.

The increased credit for household expenses is not granted for other types of work, such as renovation. For other types of work, the maximum amount of credit is €2,250 and the credit is 40% of trade income and 15% of wages. 

The temporary tax credit for electricity can no longer be claimed in the tax assessment of 2024.

Further information:

Maximum deposit of equity savings account is increased to €100,000

As of 2024, deposits of up to €100,000 can made to equity savings accounts. Previously, the maximum amount of the deposit was €50,000.

Further information:

The maximum amounts of the credit for work income and the basic deduction are increased

The maximum amount of the credit for work income will be raised from €2,030 to €2,140. In addition, the income ceiling for the credit is raised. The credit is no longer granted if your net taxable earned income is approximately €168,400 or more.

Until now, the maximum amount of credit for work income has been higher for those over the age of 60. In 2024, this age-based increase to the maximum amount will be readjusted. For those who are 65 or older, the increase of the maximum amount is doubled from €600 to €1,200. However, the increase will no longer be granted to those aged 60–64.

The maximum amount of the basic deduction will be raised from €3,870 to €3,980. You can get the basic deduction in full if you receive €3,980 in daily allowance per year, approximately €8,000 in wage income per year, or approximately €13,600 in pension income per year.

Further information:

Transfer tax rates are lowered, first-time homebuyers no longer exempt from transfer tax

The transfer tax rate on real estate will be lowered from 4% to 3%, and the transfer tax rate on shares in housing companies will be lowered from 2% to 1.5%. The transfer tax on other types of securities will be lowered from 1.6% to 1.5%.

The legislation is applied retroactively to sales conducted on or after 12 October 2023. If you have conducted sales of apartments or shares in late 2023 and paid too much transfer tax, the Tax Administration will refund the excess amount to you. The refunds will be paid out in early 2024.

The government proposal also envisages withdrawal of the exemption accorded to first-time buyers of residential property from 1 January 2024. Any purchases by first-time homebuyers made in 2023 are still exempt from transfer tax.

The date on which the sales contract was signed determines which rate of transfer tax is applied and whether the purchase is exempt from transfer tax.

Further information: Government proposal HE 64/2023 (eduskunta.fi, available in Finnish and Swedish, link to Finnish)

Other changes to transfer taxation

  • Under certain conditions, real estate units and facilities that on 31 December 2022 were being rentedto wellbeing services counties and in use for municipal and joint municipal authorities' wellbeing services and rescue operations can be converted into a real estate holding company exempt from transfer tax. This change is applied retroactively on all transfers conducted on or after 9 October 2023.
  • In certain situations, transfer tax must be paid on loan receivables sold in connection with the transfer of a security.
  • In the case of a business transfer, a real estate unit or security can be transferred to an existing corporation that continues the operations so that the transfer is exempt from transfer tax. This change is applied retroactively on all transfers conducted on or after 9 October 2023.
  • There are some clarifications to the tax treatment of minority shares that are transferred as part of arbitration proceedings.
  • The government also proposes that, starting in 2025, a company that transfers shares or other securities as dividends or as other distribution of profit is liable for paying transfer tax on the transfer.

Further information: Government proposal HE 40/2023 (eduskunta.fi, available in Finnish and Swedish, link to Finnish)

Increase to real estate tax on land

The general real estate tax rates for buildings and for the land the building is located on will be separated. The lower limit for the general real estate tax rate on the land will be raised from 0.93% to 1.30%. This will raise taxes in municipalities where the minimum rate has been lower than 1.30%. The upper limit remains at 2.00%. The general real estate tax on buildings will remain at 0.93–2.00%.

The change does not apply to the Åland Islands.

Further information:

The payment period for inheritance tax is extended from 2 to 10 years

The time limit for paying inheritance tax will be extended from 2 years to 10 years. This change means that 10 years must have passed since the first due date for inheritance tax before the tax is recovered through enforcement, before the taxpayer is requested to be declared bankrupt based on the unpaid inheritance tax, or before information on unpaid inheritance tax is entered in the tax debt register.

The change applies to inheritance taxes with a first due date on 1 January 2024 or later.

However, late-payment interest must be paid on inheritance taxes paid after the due date. Starting 1 January 2024, the late-payment interest on inheritance tax will be lower than the late-payment interest on other taxes. In 2024, the rate of late-payment interest on inheritance tax is 7.5%. For other taxes, the rate is 11%.

The changes will come into effect on 1 January 2024.

Further information:

Increase to late-payment interests and credit interest

If you pay your taxes late in 2024, you will have to pay more late-payment interest than currently. The late-payment interest on inheritance tax will be raised to 7.5% and on other tax types to 11%. In 2023, the late-payment interest is 7%.

The late-payment interest with relief will also increase in 2024. Late-payment interest with relief is imposed on back taxes and additional prepayments up to the due date. The late-payment interest with relief increases from 2% to 6%.

Correspondingly, the rate of credit interest payable on tax refunds will be increased from 0.5% to 2%.

The interest calculator and instructions on vero.fi will be updated with the new interest rates before the end of 2023.

Research and development: extra additional deduction

An extra additional deduction can be claimed for research and development in tax year 2024. In addition, the general and the temporary additional deductions can be claimed for these activities, as well.

Further information: Extra additional deduction for research and development (available in Finnish and Swedish, link to Finnish)

File the temporary profit tax on electricity and fossil fuel sectors on their own return

Profit taxes on electricity and fossil fuel sectors are two independent, temporary taxes. The act on profit taxes (363/2023) entered into force on 24 March 2023 and the act is applied in the assessment of taxes for tax year 2023. If a company does not have an accounting period ending in calendar year 2023, the act will be applied in the assessment of taxes for tax year 2024.

The profit taxes on electricity and fossil fuel sectors are filed on their own return in 2024. Profit taxes are not filed on regular the income tax return.

Further information: Temporary profit tax on electricity and fossil fuel sectors

Payment service providers will have an obligation to provide information about cross-border payments

Starting 1 January 2024, banks, credit institutions, and other payment service providers located within the EU will have a new obligation to provide information about cross-border payments. The obligation to provide information is based on an amendment of the payment information directive (EU 2020/284). The objective of the amendment is to reduce VAT fraud in international e-commerce and to ensure fair competition between companies.

Payment service providers must retain information on cross-border payments and report it to the Tax Administration for each calendar quarter. The Tax Administration forwards the information to the Central Electronic System of Payment information (CESOP) maintained by the Commission. Information on payment transactions can be utilised for purposes of tax control.

Further information: Payment service providers have an obligation to provide information about cross-border payments as of 1 January 2024

Global minimum level of taxation on corporate entities (OECD Pillar Two)

The introduction of the minimum tax rate (OECD Pillar Two) will affect the taxation of multinational groups. This change involves a new supplementary tax for large corporate groups, which aims to ensure a certain minimum level of taxation around the world regardless of which countries the group companies are located in. The new tax raises the tax rate on all group companies to at least 15%. 

Further information: Global minimum level of taxation on corporate entities (OECD Pillar Two) (available in Finnish and Swedish, link to Finnish)

Employer: Changes to social insurance contributions

See the following instructions for further information about changes in 2024: Social insurance contributions

Increase to maximum amount of balancing reserve in agriculture

The maximum amount of the balancing reserve deductible from agricultural income will be increased from the current €13,500 to €25,000. The change is applied starting with tax year 2024.

Further information:

Excise duty on alcohol: increase for wines and spirits, decrease for beer

The Finnish Parliament has adopted the Government proposal HE 37/2023 on amendments to the annex to the act on excise duty on alcohol. 

  • The excise duty on wines and other fermented beverages containing more than 5.5% alcohol by volume will be raised by approximately 8.3%. 
  • The excise duty increase for intermediate products (e.g. fortified wines) will be approximately 12.7%.
  • The excise duty increase for spirits, other strong drinks, long drinks and other mixed drinks based on ethyl alcohol will be approximately 8.8%.
  • The excise duty on beer will decrese by approximately 4.9%.
  • The excise duty on other alcoholic beverages will not be changed.

On average, excise duties on alcoholic beverages will increase by around 2%. As a result of the changes, the prices of alcoholic beverages are expected to increase by appoximately 1% on average.

The legislation will enter into force on 1 January 2024.

Further information:

Excise duties: Nicotine pouches become subject to excise duty on tobacco

The Finnish Parliament has adopted the Government proposal HE 38/2023 on amendments to the act on excise duty on tobacco.

New product groups for smokeless nicotine products are added to the act on the excise duty on tobacco: products in non-liquid form (such as nicotine pouches) and products in liquid form. After this change, excise duty on tobacco must be paid on nicotine pouches as well as on any corresponding products that may be introduced to the market later. 

Non-liquid products are subject to excise duty on value and excise duty per unit. The excise duty on value is 10% of the product’s retail price, and the excise duty per unit is 10 cents per gram.The excise duty is always at least 14 cents per gram. 

Smokeless nicotine products in liquid form are only subject to excise duty per unit, which is 30 cents per millilitre.  

For example, the amount of excise duty on tobacco for a 12-gram container of nicotine pouches is €2. This means that the price is increased by approximately €2.50 per container.

The legislation will enter into force on 1 January 2024.  All products that have been imported or manufactured in Finland after the legislation has come into force are subject to excise duties. In certain situations, duties must also be paid on products that have been released for consumption between 9 October and 31 December 2023, i.e. after the government proposal was made but before the legislation entered into force. These products are subject to excise duty if the products are still on sale 1 July 2024. In these cases, the seller who possesses the products on 1 July 2024 is liable for paying the duty.

Further information:

Decrease to excise duty on certain fuels

The Finnish Parliament has adopted the Government proposal HE 36/2023 on amendments to the annex to the act on excise duty on liquid fuels.

The value of a tonne of carbon dioxide will be decreased from €77 to €62. The carbon dioxide tonne is the basis for calculating the carbon dioxide tax on certain fuels. In 2024–2027, this will mean an average tax reduction of 3.9 cents per litre for gasoline and its replacement products, and 3.8 cents per litre for diesel oil and its replacement products.

The reduction in excise duty on fuels compensates for the increase in pump prices caused by the increased fuel distribution obligation.

The legislation will enter into force on 1 January 2024.

Further information:

Changes to taxation concerning the Åland Islands in 2024

Changes to municipal taxation

The deduction for commuting between home and work will decrease in 2024 because the threshold of this deduction is raised from €600 to €750. The maximum amount of the deduction for travel expenses will remain at €6,000.

If you have been unemployed for a part of the year, the general threshold for commuting expenses is reduced by €80 for each full benefit month (€70 per month in 2023). Starting in 2024, the threshold is also reduced if you have been on parental leave. However, the threshold is always at least €160.

The maximum amount of the basic deduction is increased from €3,500 to €3,600.

Further information:   

Tax exemption for nature reserves

Nature reserves in the Åland Islands that are protected under the Åland Islands nature conservation legislation (lanskapslagen) are exempted from real estate tax. The tax exemption does not apply to buildings or structures or building sites locates on nature reserve areas.

Further information: Legislative proposal 4/2023-2024 (lagtinget.ax, available only in Swedish)

Page last updated 2/12/2024