Finland Lowers Reduced VAT Rate to 13.5% Effective 1 January 2026

Published: January 1, 2026

Finland's reduced VAT rate will decrease from 14% to 13.5% starting 1 January 2026. This adjustment, approved by the Finnish parliament as part of the 2026 state budget, applies to a range of essential goods and services previously taxed at 14%.

The change aims to ease cost-of-living pressures, support household purchasing power, and stimulate consumption amid ongoing economic adjustments.

Affected Goods and Services (Now at 13.5%)

• ✓ Food and non-alcoholic beverages (including restaurant and catering services)
• ✓ Medicines and pharmaceuticals
• ✓ Passenger transport (taxis, buses, trains, domestic flights)
• ✓ Accommodation (hotels, holiday rentals, camping)
• ✓ Books (physical and certain digital)
• ✓ Cultural admissions (theatres, cinemas, museums, concerts)
• ✓ Sporting events and facilities
• ✓ Performing artists' fees (when VAT-liable)

Additionally, public broadcasting services (YLE tax) will shift to the new 13.5% rate.

Unchanged Rates

• ✓ Standard VAT rate: remains 25.5%
• ✓ Lower reduced rate: remains 10% (primarily for print and digital newspapers, magazines, and certain subscriptions)

Transition Rules

The new rate applies based on when VAT liability arises:

• ✓ For goods: date of delivery or handover to the buyer
• ✓ For services: date of completion
• ✓ Advance payments: rate applies based on when payment is received

Businesses should update pricing, invoicing systems, and point-of-sale configurations in advance to ensure compliance from 1 January 2026.

Rates have been updated in our database for customers using both Version 1 & 2 of the API.