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Taxation of dog breeders – file your income and deduct expenses

The income generated from selling dogs is taxable, i.e. the person receiving such income must pay tax. Tax must be paid on income received both from dog breeding (e.g. selling of puppies) and from selling an individual dog. The stud fee paid to the male dog’s owner, for example, is also taxable income.

Only expenses directly related to the breeding activity are tax-deductible. General living expenses related to dogs, such as normal feeding expenses and veterinary fees of the litter's dam, are not deductible.

You must keep a record of the income and expenses. The record must be based on receipts.

The record and the receipts together must specify the income and related expenses in sufficient detail and indicate the dates when the income was received and the expenses incurred.

Read more about the obligation to keep a record and save receipts.

An income-generating activity, a hobby activity or a business activity?

Income and expenses related to dog breeding and puppy production are treated as a hobby activity or an income-generating activity in taxation, depending on the nature of the activity. The nature of the activity determines how the income and expenses are reported on the tax return.

Income from grooming is subject to tax. See the instructions on filing at How to file income and expenses on your tax return.

Dog breeding as an income-generating activity

If you breed litters to produce income on a regular basis, breeding is usually treated as an income-generating activity. 

Example: Saija has been breeding dogs for several years. At the moment, she has four bitches. She is breeding all her dogs and receives income on a regular basis. Saija’s breeding activity is regarded as an income-generating activity in tax assessment.

The deposit is considered your income only if you do not pay it back. When it is clear that you will keep the deposit, report the amount on your tax return.

Dog breeding as a hobby activity

Dog breeding is treated as a hobby in taxation if generating income is not the actual purpose of the activity. For example, selling a single litter can be regarded as a hobby. Note that if the expenses for breeding regarded as a hobby activity exceed the income the activity generates, i.e. if you incur a loss, you cannot deduct the loss in taxation.

Example: Maija has two bitches. Maija does agibility with her dogs and takes them to dog shows. She breeds her dogs and occassionally receives income from breeding.  Maija’s dog breeding activity is regarded as a hobby in taxation. 

The maximum amount of deductible expenses directly related to puppy production is the amount of income you receive from dog breeding. However, the living expenses (e.g. your expenses for feeding or purchasing the litter's dam) are non-deductible. Also remember to report the total amount of income.

If you incur a loss from your hobby activity, you cannot deduct the loss in taxation.

Report the income you receive from selling the puppies on your tax return in the year when the puppies are sold. In the sale year’s taxation, you can also deduct the expenses incurred from breeding the puppies in the year of birth and year of sale.

Dog breeding as a business activity

Sometimes the activity may fulfil the characteristics of business and can be treated as a business activity in tax assessment. 

Large-scale dog breeding can also be a business activity. This is the case when dog breeding is your main source of income or at least a significant source of secondary income. In addition, it must meet the general characteristics of business.

Example: Matti owns dozens of dogs bought for breeding purposes. Because of the breeding activity, Matti has facilities separate from his home where the dogs live around the year. Matti has hired two full-time animal attendants. Matti is a registered business operator for dog breeding, and he keeps a record of the income and expenses related to the breeding activity. Matti’s main source of income is breeding. Matti’s dog breeding activity is regarded as a business activity in taxation. 

Read more:

Dog breeding and VAT

If you breed dogs as a business activity and your turnover exceeds €20,000 in a calendar year, you must also register for VAT. 

Read more:

What expenses can be deducted?

If you breed puppies for sale, you can deduct your expenses for the production of income in taxation. The expenses in this category include

  • the stud fee
  • mandatory health examinations related to litters and breeding
  • the dam’s increased feeding costs in the pregnancy and lactation period
  • expenses related to the feeding, veterinary visits and microchipping of the puppies
  • expenses incurred from the accessories handed out with the puppies sold.

If the dog’s health examinations were a condition for income-generation, you can deduct the expenses in taxation.

Please note that there are different types of health examinations and not all of them are directly linked to income received from dog breeding. General health examination costs cannot be deducted from the income received from dog breeding.

When the dam is pregnant, any costs arising from examinations related to the pregnancy are tax-deductible.

Any expenses related to problems arising during labour are directly related to the breeding of puppies. Therefore, you can deduct the expenses in your taxation.

What expenses cannot be deducted?

Living expenses related to dogs are not tax-deductible. Living expenses include any expenses that arise whether the dog has puppies or not.  Dog-related expenses that cannot be deducted include, for example, the following: 

  • expenses for acquiring the dam
  • the dam’s feeding expenses, except in the pregnancy and lactation period
  • dog show, trial or hobby fees
  • general health examinations
  • facilities expenses for the breeder’s home and for buildings near to it (e.g. an outbuilding or a garage) where the dogs live
  • normal dog-keeping expenses, such as veterinary visits not associated with puppy production, insurance policies, accessories, dog beds, toys and clothes.  

The dogs' general living expenses are non-deductible, regardless of whether breeding is regarded as a hobby, an income-generating activity or a business activity.

No, you cannot. Any hobby activities involving the dam or the sire of the litter are not directly related to puppy breeding, so the expenses do not arise from breeding. They are therefore non-deductible. Expenses arising from trips to dog shows are also non-deductible living expenses.

No, you cannot deduct the expenses in your taxation because you do not receive any income from the activity.

Selling an individual dog

Selling an individual dog is not a breeding activity. If you make a profit, it will be taxed as capital gains. Capital gains are taxable capital income. The dog's purchase price and purchase and selling expenses are deducted from the income you receive from selling the dog. Read more about the taxation of capital gains (available in Finnish and Swedish, link to Finnish).

How to file income and expenses on your tax return

How to file in MyTax

If you are breeding dogs on a regular basis to produce income:

  • Report your income and expenses on the tax return under Other income – Production of income.

If you breed dogs as a hobby or on occasion:

  • Enter the amount of income in the section Other earned income.
  • Report the expenses that relate to the income under the section Production of income – Expenses for the production of other income than wage income – Expenses for the production of income relating to benefits and other earned income.
  • You can claim a deduction based on your actual expenses, but the deduction claimed cannot be higher than the income earned.

If you sell an individual dog, e.g. your own pet dog:

  • If you make a profit, report it on your tax return under Capital gains.

File in MyTax

Remember to keep a record of your income and the expenses related to the income. Do not enclose receipts with your tax return.

How to file on paper forms

Select the correct form:

If dog breeding is a business activity and you are a self-employed individual with a business name, file your business income and expenses on the business tax return (Form 5).

The accounting and recordkeeping obligation, the reporting of income and expenses and the right to deduct losses depend on the nature of the activity. In borderline cases, the Tax Administration will assess the situation as a whole, and the nature of the activity is determined based on the overall assessment.

Page last updated 10/7/2025