Arvonlisävero (ALV) — Finnish VAT regimes

Arvonlisävero (ALV — Finnish VAT) underwent a major overhaul on 1 September 2024: the standard rate rose from 24% to 25.5%, second highest in the EU after Hungary (27%), tied with Croatia. Four rates now coexist (25.5 / 14 / 10 / 0), with a franchise threshold alvtoiminta-raja at €15K/year and several specific regimes (reverse charge for construction, gold, mobiles).

Applicable rates

Since 1 September 2024, Finland applies four VAT rates:

Finnish VAT rates (Arvonlisävero ALV) — since 1.9.2024
─────────────────────────────────────────────────────────────────

25.5 %  STANDARD     │ All goods and services unless excepted
                     │ (Vakioverokanta)
                     │
14 %    REDUCED      │ Food
                     │ Drinking water
                     │ Animal feed
                     │ Restaurant (on-premises consumption)
                     │ Takeaway food (since 2010)
                     │
10 %    SUPER-REDUCED│ Books (paper + digital since 2019)
                     │ Prescription medicines
                     │ Urban and intercity public transport
                     │ Hotel accommodation
                     │ Cinema, theatre, concert tickets
                     │ Museum, exhibition, amusement park entries
                     │ Sports tickets + sports practice (gym, club)
                     │ Hairdressing services, small repairs (2007-temp)
                     │
0 %     ZERO-RATED   │ Newspapers and periodicals by subscription
                     │ Exports outside EU (with authorisation)
                     │ Intra-Community B2B deliveries (with FI VAT)
                     │ Investment gold (Sijoituskulta)
                     │ Press activities (publishing + distribution)

25.5% — Standard (Vakioverokanta)

Applies to all goods and services not in a reduced category. Covers the bulk of B2B and everyday consumption outside food: electronics, clothing, furniture, professional services, intellectual services, telecoms, energy, fuel, alcohol, tobacco, etc.

14% — Reduced

• Food (elintarvikkeet) — products to consume, excluding on-premises restaurant before 2010.
• Restaurant and on-premises consumption — since 1.7.2010, aligned to 14% (previously 22%).
• Takeaway food — subject to 14% since 2010.
• Drinking water from the public network.
• Animal feed.

10% — Super-reduced

• Books — paper and digital (e-books included since 1.7.2019, in line with EU Directive 2018/1713).
• Prescription medicines authorised by Fimea.
• Public transport urban and intercity (bus, VR train, Helsinki metro, internal ferry).
• Hotel accommodation and holiday rentals (Airbnb if operated as a service).
• Culture — cinema, theatre, concert, opera, festival, museum, exhibition entries.
• Sport — sports tickets (matches), sport practice (gym membership, club).
• Hairdressing services (alennettu kampaajapalvelu) — since 2007 (experimental regime, extended).
• Small repairs (bikes, shoes, clothes) — since 2007, experimental regime, extended.

0% — Zero-rated

• Newspapers and periodicals by subscription. The 0% rate covers only annual or longer subscriptions. Unit purchase is at super-reduced 10% since 1.7.2019.
• Exports outside EU — goods delivered outside the EU (PO authorisation + Tulli export proof).
• Intra-Community B2B deliveries — goods delivered to an EU taxable person with active VAT number (validated via VIES). Reverse charge on buyer side.
• Investment gold (Sijoituskulta) — exemption art. 43 ALV.

Historic rise on 1 September 2024

The Orpo government (centre-right RKP-PS-KD coalition in power since June 2023) raised the standard VAT rate from 24% to 25.5% on 1 September 2024. The amending law 1318/2023 was enacted in December 2023 with a 9-month deferred entry into force.

This 1.5-point rise makes Finland the EU country with the second highest standard rate:

VAT threshold — alvtoiminta-raja

The Finnish VAT franchise threshold (alvtoiminta-raja — VAT activity limit) is set at €15,000 turnover / last 12 months since 1 January 2021 (previously €10,000). Below, the company is not required to register for VAT, does not charge VAT and cannot reclaim it upstream.

Characteristics:

• Rolling threshold. Computed over the last 12 months rolling, not the calendar year. VAT switch as soon as crossed.
• Voluntary option. A small business may register for VAT voluntarily below the threshold — useful to reclaim upstream VAT (investments, supplies).
• Tapered relief. Between €15K and €30K, a relief scheme (alarajan huojennus) progressively reduces VAT due. Linear to 100% relief at €15K and 0% at €30K.
• Excluded: intra-EU B2B activities (always VAT regime), construction reverse charge, exported deliveries (always reportable).

Reverse charge (Käännetty verovelvollisuus)

Several reverse charge regimes (VAT self-assessment — buyer declares VAT instead of vendor) apply in Finland:

EU comparison

Finland is now the second most VAT-taxed EU country at the standard rate (25.5%), tied with Croatia and just behind Hungary (27%). This position contrasts with Sweden (25%), Denmark (25%) and Norway (25%, non-EU) — all three historically "the Nordic 25% block". Finland has broken with Nordic unanimity.

The 25.5 / 14 / 10 / 0 structure remains classic for the EU — most EU countries have a standard + 1 or 2 reduced + a categorical zero. The Finnish peculiarity is putting books and culture at the super-reduced 10% (vs 5% France or 7% Germany).

Common pitfalls

• Confusing 24% and 25.5%. Any ERP used for invoices issued before 1.9.2024 must keep 24% in legacy mode for credit notes / corrections. For invoices issued after, 25.5%. Common confusion among foreign vendors.
• Mixing on-premises and takeaway. Both have been at 14% since 2010 — but before that date, on-premises restaurant was at 22% (then standard). Old contracts may have errors.
• Forgetting the 2019 e-books reform. Digital books have been at 10% since 1.7.2019 (previously: 25.5% at standard). Align configurations for content publishers.
• Misreading alvtoiminta-raja. The €15K threshold is rolling over 12 months — not calendar. A seasonal activity earning €18K from July to September then €0 for the rest of the year is still subject.
• Believing mobiles reverse charge applies to B2C. No — B2B only. Selling an iPhone to a consumer stays at 25.5% standard.
• Not validating FI VAT via VIES. To benefit from intra-EU 0%, the EU customer's FI VAT number must be valid AND active in VIES at the time of the invoice. Otherwise 25.5% applies with possible recovery.

Cross-links

• Finland hub — full view
• Vero.fi — tax integration
• Y-tunnus — PRH
• Finvoice — national standard
• Act 241/2019 — B2B right
• Real-Time Economy Finland
• Vero.fi — VAT (English)
• Finlex — Arvonlisäverolaki 1501/1993
• Finlex — Act 1318/2023 (2024 hike)