Rates of VAT
Changes to VAT rates as of 1 January 2025
- Most goods and services currently subject to reduced VAT of 10% will be subject to reduced VAT of 14%.
- The following will still have the 10-percent VAT rate: supply of newspapers, supply of magazines, supply of public broadcasting.
- However, sanitary protection products and children's diapers, currently subject to 25.5% VAT, will be subject to the reduced VAT rate of 14%.
VAT rates determine what percentages of value-added tax must be paid on various goods and services. The table below contains examples of which VAT rates are applied on different types of goods and services. You can also use the VAT calculator to determine the correct VAT rate.
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.
Read more: The general VAT rate is 25.5% starting 1 September 2024
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 will 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). What business operations are exempted from VAT?
Examples of VAT rates
Taxi enterprise. Matti drives a taxi for a living. In addition to transporting customers, he also offers food delivery services. Passenger transport services are subject to the reduced VAT rate of 14%. However, food delivery services are subject to the general VAT rate (25.5%).
Massage service. Pekka is a sports massage therapist and therefore a health care professional. In addition to massage, he offers different kinds of relaxation treatments to his customers. Massage performed by a health care professional is exempt from VAT (0%). Relaxation treatments, however, are taxed at the basic VAT rate (25,5%). Pekka also sells training equipment to his customers. Their VAT rate is 25,5%.
Dentist. Dentristry services are usually exempt from VAT (0%). However, aesthetic dental treatment (such as whitening) performed by a dentist is subject to VAT at the basic rate (25,5%).
Restaurant or grocery store, delivery of food to the customer’s home. A restaurant or store sells food for home delivery, and presents an invoice to the customer for the full service performance (food+delivery) with only the VAT rate applied to meals or groceries (14%), on the condition that:
- The restaurant or store is in charge of the delivery, having its employee deliver the food; or
- The restaurant or store has engaged the services of a food courier company.
However, the courier company is a supplier of transportation services, presenting an invoice to the restaurant or store with the general VAT rate 25.5%.
Pickup service and home-delivery service, supplied by a grocery store. “Pickup” means that grocery store employees will shop and package the products for the customer, and the customer will then visit the store to collect the goods. “Home delivery” means that the store will instead transport the goods to the customer’s home. Both types of service are subject to the reduced VAT rate of 14%.
It is customary for grocery stores to sell nonfood items and these are subject to another VAT rate. For example, detergents and cleaning products are subject to 25.5% VAT. If the customer’s order includes these products, the VAT on the pickup/delivery is determined in proportion to the VAT rates on the different products the customer had ordered.
Example: The customer ordered €60 worth of groceries and €20 worth of cleaning products. Groceries are subject to 14% VAT and cleaning products to 25.5% VAT. The cost of the pickup/delivery is €12.00. To determine the VAT rate applicable on the pickup/delivery, €9.00 is related to the groceries (incl. 14% VAT) and €3.00 to the cleaning products (incl. 25.5% VAT).