Changes to taxation in 2025

Table of contents:

Individual taxpayers

Corporate taxpayers 

Other changes

Tax cards for 2025 will enter into effect in January 

Starting in 2025, tax cards will be valid from 1 January. Further, the income ceiling stated on the tax card is calculated for the full year, i.e. a period of 12 months. Until now, tax cards have become valid in February. You will receive your 2025 tax card in MyTax by 13 December 2024. If you have selected to receive the tax card by post, it will be delivered to you by the end of December. 
 
Further information: Tax card 2025

Income subject to prepayments exceeding €7,000 can be included on the tax card 

Starting with tax year 2025, if you have received more than €7,000 in income subject to prepayments (such as rental income), you can choose to either take the income into account in your tax card’s tax rate or pay tax prepayments on the income. You can make the selection in MyTax. The selection will stay in force for coming years, unless you change it. 

Changes to the tax scale and the taxation of pensions 

The state income tax scale will be indexed, which will result in lower taxation on earned income. The pension income deduction will decrease, which will cause higher taxation on some pension recipients. The maximum amount of the basic deduction will be increased.  

Further information: Government Proposal 108/2024 vp (eduskunta.fi, in Finnish and Swedish, link to Finnish)  

Changes to the tax credit for household expenses 

Starting in 2025, the maximum amount that you will be able to claim as tax credit for household expenses will be €1,600. In 2024, the maximum credit amount was €2,250 for renovations and €3,500 for household work, nursing, care and physical therapy.  
 
The percentage rates used in the credit calculation will also change:  

  • If you hire a company, the credit is 35% of the amount paid for the work. (In 2024: 40% for renovation work, 60% for household work, nursing and care.)
  • If you hire an employee, the credit is 13% of their pay. In addition, you can claim the credit for any employer’s contributions you have paid. (In 2024: 15% of the pay, and any employer’s contributions.) 

Replacing oil heating still entitles you to the increased credit for household expenses: 60% of the amount paid for work, up to €3,500 per year. The increased credit will remain available until 2027. 
 
The threshold amount subtractred from the credit amount will increase to €150 from the current €100.

No changes to deduction for travel expenses

In 2025, you will be able to claim up to €7,000 as deduction for commuting expenses. The maximum amount will remain the same as in 2024. The credit threshold will remain at €900. 

Tax-exempt reimbursements of travel expenses in 2025 

In 2025, the tax-exempt reimbursements of travel expenses will be as follows:  

  • full daily allowance: €53 (in 2024: €51) 
  • partial daily allowance: €24 (in 2024: €24) 
  • meal allowance: €13.25 (in 2024: €12.75) 
  • tax-exempt kilometre allowance: €0.59 per kilometre (in 2024: €0.57/km). 

Further information: Tax Administration decision on reimbursement of travel expenses in 2025

Value of fringe benefits in 2025

The Tax Administration has issued the annual decision on the value of fringe benefits. The decision confirms the values of the most common fringe benefits, including employer-provided accommodation, company car, meals, and telephones.

There are certain changes to the regional valuation of the accommodation benefit, for example. The values of unlimited car benefits have also been lowered because of the lower prices of motor fuels.  

Further information: Taxable fringe benefit values for 2025 

Filing deadlines for pre-completed tax returns will be earlier than before

Taxpayers receiving pay or pensions will have to file their pre-completed tax returns earlier than before. In 2025, the filing deadlines for tax returns will be 15 April, 22 April and 29 April. Previously, the filing deadlines were in May.  

Self-employed business operators and agricultural operators as well as their spouses will have to file their pre-completed tax returns in early April, as before. The filing deadline will be 1 April 2025. 

Wage earners and pension recipients will receive their pre-completed tax returns in MyTax by 27 March. Those who have not yet activated Suomi.fi Messages and opted for electronic communication with officials will also receive the return by post.  

The due date for checking real estate tax returns will also be earlier, on 15 April. The filing deadlines for corporate tax returns will not change.

Further information: Verohallinnon päätös veroilmoituksen ja kiinteistötietojen ilmoituksen antamisesta (in Finnish and Swedish, link to Finnish)

Deduction for earned income will be removed, child increase to credit for work income will be introduced

The deduction for earned income will be removed as of 2025. The deduction is replaced by an increase to the credit for work income. Further, guardians of underage children will be entitled to an increased credit for work income. The maximum amount of the credit for work income will be increased by €50 per child. If you are a single parent, the increase is doubled. You can receive the credit for work income based on pay or other work income. The credit is subtracted directly from the amount of tax to pay: for example, if you receive €50 of credit, you pay €50 less tax.  

The Tax Administration calculates the credit automatically. The Tax Administration receives the information on your children from the DVV’s Population Information System. If you are the guardian of underage children who live abroad and who do not have Finnish personal IDs, you can report these children in MyTax. 

Further information: Government Proposal 108/2024 vp (eduskunta.fi, in Finnish and Swedish, link to Finnish)  

Public broadcasting tax will decrease

The government has proposed that the public broadcasting tax imposed on individual taxpayers would be decreased as of 2025. In future, only the part of total net taxable earned income and net capital income or of the amount of work income under YEL or MYEL exceeding €15,150 would be subject to the public broadcasting tax. At present, the tax is imposed on the amount exceeding €14,000. The public broadcasting tax would still be 2.5% of the exceeding amount.  

The maximum amount of the public broadcasting tax would decrease from €163 to €160. Following these changes, the amount of public broadcasting tax payable by all individual taxpayers would decrease, and some taxpayers currently subject to the tax would no longer have to pay it.  

Further information: Government Proposal 186/2024 vp (eduskunta.fi, in Finnish and Swedish, link to Finnish) 

Changes to taxation of rental income from fields and forests

Starting in 2025, rental income from agricultural land or woodland will be taxed as personal capital income and no longer as agricultural income. This means that, starting with tax year 2025, this kind of rental income must be included in your personal pre-completed tax return instead of the agricultural tax return.   

However, rental income from fields and forests received in 2024 must still be filed on the agricultural tax return. 

This change aims to harmonise the taxation of rental income from fields and forests with other types of rental income.  

Further information: Changes to taxation of rental income from fields and forests in tax year 2025 (in Finnish and Swedish, link to Finnish)  

Employers’ training deduction will be removed 

The training deduction employers have been able to deduct from business income and agricultural income will no longer be granted as of tax year 2025. The deduction will be removed because it was ultimately not effective in reaching the goals set for it. The training deduction was first introduced in tax year 2014.

Employer: Changes to social insurance contributions

See the following instructions for further information about changes in 2025: Social insurance contributions

Changes to VAT rates

The government is proposing changes to the reduced VAT rates. If the proposal is accepted, the VAT rate of many products and services will increase from 10% to 14% on 1 January 2025. Sanitary protection products and children's diapers, currently subject to 25.5% VAT, will be subject to reduced VAT of 14% in future. Another change currently prepared concerns candy and chocolate, whose VAT rate would rise from 14% to 25.5%. This change is planned to enter into effect on 1 June 2025.

Further information: Changes to VAT rates as of 2025

Changes in VAT assessment for small businesses: the threshold for VAT liability will rise, the VAT relief for small businesses will be removed, VAT exemption for small businesses will be extend to the EU

In future, companies are required to register for VAT if their turnover exceeds €20,000. In addition, the relevant turnover will be calculated based on the calendar year’s turnover as opposed to the accounting period’s turnover. The previous year’s turnover will also be taken into account in these calculations. In 2024, the threshold was €15,000.

The Finnish VAT relief for small businesses will no longer be granted from the beginning of next year. Companies whose turnover for 2024 does not exceed €30,000 can still request the relief for 2024.

In addition, a new VAT scheme for small businesses will be introduced in the EU. The scheme is designed for small companies conducting business in the EU. The scheme allows Finnish companies to sell goods and services in other EU countries exempt from VAT on certain conditions. Also, a company established in another EU country can sell goods and services in Finland exempt from VAT. A condition for the use of the scheme is that the business’s annual turnover does not exceed €100,000 in the EU and that the sales do not exceed the national thresholds for small businesses in the countries concerned.

Further information: Changes to VAT assessment of small businesses in 2025 

Income from timber sales and public financial support will be displayed in MyTax 

In the tax returns of agricultural and forestry operators and self-employed individuals, MyTax will display information on public financial support and income from timber sales, for example. If you want, you can use these details in your tax return. The information will be displayed in MyTax on 3 February 2025 at the latest. 
 
Further information: New in MyTax – public financial support and insurance benefits will be shown on tax returns (in Finnish and Swedish, link to Finnish)

Changes to transfer tax legislation: companies are liable for transfer tax on dividends distributed as securities

The act on transfer tax will change on 1 January 2025. According to the amended legislation, companies distributing dividends must file a transfer tax return and pay transfer tax if the company distributes dividends as shares or other securities. The transfer tax return can be filed in MyTax as of 1 January 2025. 
 
Further information: Dividend distribution as shares or other securities – how the company files and pays transfer tax

Excise duty on tobacco will be increased

The excise duty on tobacco will be increased in phases between 2025 and 2027. The increased rates will enter into effect in early January and early July. On average, the excise duty on cigarettes, roll-your-own tobacco, on pipe and cigarette tobacco, and on cigars and cigarillos will increase by 27.1%. The duties on other products subject to the excise duty on tobacco, such as electronic cigarette liquids and nicotine pouches, will not increase.  
   
Further information:

Excise duty on spirits will be increased 

The excise duty on spirits will be raised in accordance with the expected development of the consumer price index during 2025–2027. The increase will affect intermediate products with more than 15% but no more than 22% alcohol by volume, ethyl alcohol beverages under heading 2208 with more than 10% alcohol by volume, and other ethyl alcohol beverages regardless of alcohol contents.  

The increase is 1.3%-1.8% per year, amounting to a total of 4.6% during the years 2025–2027. The changes enter into force on 1 January 2025.

Further information:

Excise duty on soft drinks will be increased

The excise duty on soft drinks will be increased. The schedule of when the legislative changes will enter into force and when they will be implemented depends on when the European Commission makes its decision on State aid approval.

Further information: Government Proposal 280/2022 vp (eduskunta.fi, in Finnish and Swedish, link to Finnish) 

Entrepreneurs will receive a text message reminder about filing the business tax return

Self-employed individuals and business operators will receive a text message in the spring, reminding them to file their business tax return. This way, the Tax Administration aims to reduce the amount of paper mail sent out. If the taxpayer’s telephone number is not in the Tax Administration’s records, the Tax Administration will instead send a reminder letter on paper as before.

Late-payment interests and credit interest will increase 

If you pay your taxes late in 2025, you will have to pay more late-payment interest than previously. The late-payment interest on inheritance tax will be raised from 7.5% to 8% and on other tax types from 11% to 11.5%.

The rate of late-payment interest with relief will be raised from 6% to 6.5%. Late-payment interest with relief is imposed on back taxes and additional prepayments up to the due date. 

In addition, the rate of credit interest paid on tax refunds will be raised from 2% to 2.5%.

Changes concerning the Åland Islands

Starting in tax year 2025, the deduction for medical expenses is no longer available in the Åland Islands. As in mainland Finland, the earned income allowance will be removed and replaced with an increase to the credit for work income. The maximum amount of the basic deduction in the municipal taxation of the Åland Islands will be raised to €3,825. The media fee for individuals will be raised to €127.

Changes in taxation — other pages

Page last updated 12/11/2024