The value-added tax (VAT) will decrease to 13.5 percent at the turn of the year

The Finnish Parliament has approved the bill on further reducing the reduced 14 percent VAT rate to 13.5 percent as of 1 January 2026. The change will be significant, as it will apply to all goods and services currently subject to the 14 percent rate. This group includes, among others, foodstuffs, restaurant services, feedstuffs, sports and cultural services, books, medicines, passenger transport and accommodation.

The reduction of the VAT rate will affect both businesses that sell goods and services subject to the reduced rate and those that purchase them. Practical challenges may arise particularly in updating invoicing and ERP systems, as well as in ensuring the timely allocation of VAT on sales and purchases. This is especially relevant for advance payments, instalment sales and year-end situations, where the applicable VAT rate may depend on the payment or supply date.

In addition, public broadcasting services (YLE) will also be subject to the 13.5 percent VAT rate going forward.

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