The proposal seeks to raise the VAT rate from 10% to 14% on a wide range of items, including:
- Books
- Pharmaceutical products
- Sports and fitness services, including the use of sports facilities
- Entrance fees to cultural, entertainment, and sporting events
- Performances by artists, athletes, or other public performers
- Passenger transport services
- Accommodation services
- Guest port operations
- Imported art objects and those sold by the author or a casual seller
Additionally, the proposal includes a VAT reduction from 24% to 14% for menstrual protection pads, incontinence protection pads, and children's diapers.
These changes are part of the government's 2025 budget proposal and, if approved, will come into effect on January 1, 2025. The updated VAT rates would apply to payments and services rendered from that date onwards, but advance payments made before the law's enforcement would continue to follow the current 10% VAT rate.
For example, monthly gym memberships paid in December will be taxed at the 10% rate, but from January 2025 onwards, the VAT rate will rise to 14%.
The proposed adjustments aim to streamline the VAT system while balancing the government's fiscal policies.
If you require further information on these proposed changes and guidance on how to manage their impact in due course, contact us at Ecovis Finland.