Reduction of car tax based on a fixed-term rental contract
If a vehicle is intended to be used in Finland for no longer than 5 years, and the use of the vehicle is based on a fixed-term rental contract, the taxpayer can claim a reduction of car tax. The amount of the reduction is the same as the amount of export refund. This way, the taxpayer will only need to pay the part of the tax that relates to the vehicle’s use in Finland. If the claim for reduction is accepted, no export refund will be granted for the vehicle.
You can claim the reduction of car tax based on a fixed-term rental contract on the car tax return. If you are a registered filer of car tax, you cannot claim this reduction.
If you are an individual taxpayer, make your claim in the Individual features section. In your claim, report the name and Business ID of the party from whom you rented the vehicle as well as the start and end date of the rental use in Finland.
You will receive the decision in MyTax. You will also receive the decision by post to your home address, unless you have activated Suomi.fi messages and chosen not to receive paper mail.
If you wish to claim the reduction on paper, use the form Car tax return (1200e).
Requirements for reduction of car tax
Your car tax can be reduced based on a fixed-term rental contract if the following requirements are met:
- an export refund can be granted for the vehicle on the date when its fixed-term rental contract ends and the vehicle is exported out of Finland.
- the vehicle is taken into use in Finland for the first time.
- the vehicle is intended to be used in Finland for no more than 5 years based on a fixed-term rental contract.
- the party that rents out the vehicle conducts regular vehicle rentals within the EEA.
Amount of reduction
The car tax is reduced by the amount that you would receive as export refund after the vehicle is exported. Read more about the export refund.
The reduction is not made if it is less than €500. The reduction is also not made if, after the vehicle use has ended, it becomes apparent that the reduction would be less than €500. In this case, the Tax Administration will adjust taxation to the taxpayer’s detriment.
Obligation to report changes made to the vehicle’s rental contract
If there are changes to the rental contract, notify the Tax Administration. If you do not report the changes, if you report them late or if your report has errors, you will have to pay a negligence penalty.
Report the changes to the rental contract as a free-form account on paper or contact the Tax Administration to agree on electronic filing. Send the report to P.O. Box 20, FI-00052 Vero.
When reporting changes to the Tax Administration, include the following information:
- Filer’s name, personal ID or Business ID and address in Finland
- Name and Business ID of party renting out the vehicle
- Vehicle’s VIN and tax decision’s decision number
- Date when vehicle use in Finland ends according to the new agreement.
Termination of fixed-term rental contract
Vehicle use in Finland must be stopped by the end date of the fixed-term rental contract.
- The vehicle must be taken out of traffic in Finland.
- The vehicle must be exported out of Finland for permanent use abroad within 30 days from the end of the rental agreement.
- The vehicle must be roadworthy on the export date.
Tax Administration will adjust taxation if necessary
If the amount of the reduction of car tax is different from the amount of export refund that would be granted for the vehicle after it has been exported out of Finland, the Tax Administration can adjust the tax assessment to the taxpayer’s benefit or detriment. In addition, the Tax Administration may adjust the taxation to the taxpayer’s detriment if the requirements relating to the reduction of car tax or to the termination of vehicle use are not met. However, the Tax Administration may choose to not adjust taxation to the taxpayer’s detriment if the vehicle has been scrapped or otherwise destroyed and it has been reported as such to the traffic register.
If the Tax Administration has granted a reduction of car tax based on a fixed-term rental agreement for the vehicle, the taxpayer does not need to report it when the vehicle is exported.
However, the taxpayer must provide information and documents that may be required in the processing of the tax adjustment, if the Tax Administration requests them.