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Taxation changes 2023

News, 12/13/2022

This is a summary of the changes becoming effective in 2023. Some of them are legislative changes proposed by the Government but not yet debated in the parliament. Updates to this page are being made during December as we receive confirmation that the new rules enter into force.

Individual income taxes

New taxable values for fringe benefits, 2023

The Tax Administration’s official decision on valuation of employer-provided benefits is now issued. The 2023 values for company cars, employer-provided accommodation, meals and telephones are listed in the text of the decision.

The decision contains still unchanged rules for 2023 concerning meals: employees are allowed to pay not only for the lunch but also for its delivery with the tax-exempt allowance. Regarding company cars provided to an employee in the form of an 'unlimited' benefit, the calculation is now based on 2 cents higher running costs per kilometre due to higher fuel prices. The 2023 rules on company cars' automotive accessories provide for a new tax-exempt threshold, raised from €850 to €1,200.

Further information:

Tax-exempt coverage of employees’ travel expenses 2023

In accordance with the 2022 rules, €48 is the basic per diem for business trips in Finland (the amount for the 2022 tax year is €45), the partial per diem is €22 (instead of €20 in 2022), and the tax-exempt maximum amount of employer-provided meal money is €12.00 (the amount for the 2022 tax year is €11.25).

The kilometre allowance is 53 cents (up from 46 for the 2022 tax year).

Further information: Decision of the Tax Administration on tax-exempt allowances for travel expenses, 2023

Daily trips between home and work, 2023

Commuting expenses have temporarily entitled employees to higher tax deductions in 2022. The raised maximum deductibility of €8,400 in paid expenses for daily commutes remains in force in 2023. For commuters driving their own motor vehicle to work, the deduction is based on €0.30 per kilometre. For commuters driving an employer-provided company car ('limited benefit'), the deduction is based on €0.24 per kilometre.

Further information: Commuting expenses

Assistance with electricity costs

A new tax credit is granted to those who pay high electricity bills. The credit is a temporary measure in response to increased prices. Consumed electricity in the timeframe from 1 January 2023 to 30 April 2023 qualifies for the credit. The credit is available to taxpayers with more than €2,000 of paid electricity costs for 4 months, January to April. You can request the credit in MyTax as of January. Please note that individual taxpayers cannot combine the tax credit with receipts of Kela-paid social benefits consisting of subsistence allowance or with Kela-paid assistance with electricity costs.

Further information: Electricity credit for payers of high energy costs

No deductions for home-loan interest

Starting 2023, tax rules no longer allow deductions for paid interest expenses of home loans. In the same way, deductions for interest are no longer offered to first-time homebuyers. Since 2012, the size of this deduction has diminished step by step, and for the tax assessment of 2022, only 5% of home-loan interest is deductible.

Work-income credit for people over 60 is higher

The tax credit related to received wages (and received income from self-employment) will increase for individual taxpayers aged 60 years or older. The credit for work income reduces the taxpayer’s income tax directly.

Graduation of the increase:

  • €200 higher than previously for ages 60 and 61
  • €400 higher than previously for ages 62, 63 and 64
  • €600 higher than previously for age 65 and older

The tax credit for disability is phased out

The deduction called disability credit is no longer part of individual income taxation as of 1 January 2023. This change in tax rules is related to the recent legal amendment connected to the wellbeing services county system. An amount matching the change in tax revenue, resulting from the phasing out, is allocated to improvement of services for the disabled.

However, the disability credit in Åland Islands municipal taxation remains in force.

One of Sweden’s pension types is no longer paid to foreign citizens

This change concerns the Swedish pension called ‘guarantee pension’ — garantipension. At present, some 18,000 beneficiaries of pension income from Sweden live in Finland. Those who have received the Swedish guarantee pension so far have tax cards for 2023 that include the income in the card’s withholding percentage rate. As a result, the withholding may become too high. We recommend that beneficiaries of guarantee pension from Sweden request a revised tax card for 2023 via MyTax or over the telephone at 029 497 000.

Business taxes

Tax-deductible R&D expenses become an incentive for businesses

A Government proposal envisages a permanent tax incentive for business enterprises that conduct research and development operations, consisting of a basic deduction related to existing R&D costs, and an increased deductible amount that will depend on how much the company's R&D activity has grown. According to the Government proposal, the basic additional deduction would be available starting tax year 2023 and the increased additional deduction from 2024. The Finnish parliament's Committee for state finances supports the Government proposal.

Further information: LA 69/2022 , text in Finnish and Swedish (

Passenger transport services are temporarily VAT-exempt

Passenger transport including taxi rides in Finland are relieved from VAT liability. The temporary change in tax rules additionally provides for retained deductibility of value-added tax included in the transport company’s purchases. Exemptions are in force from 1 January to 30 April 2023. The applied VAT rate concerning passenger transport has been 10%.

Further information: “Temporary exemption from VAT for domestic passenger transport services” — Kotimaan henkilokuljetukset vapautetaan väliaikaisesti arvonlisäverosta (in Finnish and Swedish) 

VAT rate on electricity is reduced

Another temporary change in VAT rules concerns the sale of electric power. VAT rates are lowered from 24% to 10%. The reduced VAT rate only concerns electricity itself, not the transmission of electricity i.e. the related power grid service. Selling of electricity from 1 December 2022 to 30 April 2023 are subject to the reduced rate.

Further information: “VAT rate on electricity is reduced” — Sähkön arvonlisäveroa alennetaan väliaikaisesti (in Finnish and Swedish) 

Platform operators have a new information-reporting requirement

Operators of a digital online platform for intermediation of various services, i.e. platform operators become liable to send information to the Finnish Tax Administration on sales and rental contracts effected under their platform’s intermediary activity, including information on the natural persons and companies that have received income related to the sales or rentals. Operators of digital platforms must collect information as of 1 January 2023, and they must submit an annual information return to the Tax Administration once a year.

Further information: Digital platforms: the new information reporting requirement in 2023

The rights to deduct interest will be limited

An amendment to the Act on the taxation of business income (Laki elinkeinotulon verottamisesta 360/1968) changes the rules governing deductions based on balance-sheet comparison. The rules governing these deductions that relate to consolidated group companies’ loan arrangements had some changes for tax year 2022 as well. The most recent change involves a limitation of the maximum amount of interest payments for which a company can get a deduction. The deduction rule is based on an exception from the general rule. The exception cannot now be used in situations where the consolidated balance sheet indicates that at least 20% of interest payments have gone to parties that own a significant part of the group’s shares. Another change in the rules governing deductions allows for more extensive deduction rights for companies that carry out work related to development of infrastructure, also based on an exception from a general rule.

Further information: HE 202/2022 , text in Finnish and Swedish (

New rules make receipts of constructive dividend subject to tax

The rules concerning distribution of constructive dividends will change, making this category of income fully subject to taxes for the party receiving such dividends.

Further information: HE 227/2022 , text in Finnish and Swedish (

Change to the calculation of pharmacy tax

When the wholesale price of pharmaceutical products is more than €1,500, the part of the pharmaceutical products’ VAT-exempt retail price that exceeds €1,683.92 will be deducted from the VAT-exempt turnover on which the pharmacy tax is based. In other words, when the wholesale price of pharmaceutical products is more than €1,500, the amount of their retail price included in the pharmacy tax basis will be €1,683.92 per package. The change enters into force on 1 January 2023.

Further information: HE 245/2022, text in Finnish and Swedish ( 

Imports between the Åland Islands and mainland Finland – change to temporal allocation on the VAT return

The tax payable to the Tax Administration on imports between the Åland Islands and mainland Finland is allocated to the calendar month during which the customs clearance decision was issued. If the liability to pay VAT arises before the amendment enters into force, the legislation in force at that time will be applied.

The tax to be deducted continues to be allocated to the calendar month during which the customs clearance decision was issued.

Further information: Tax border between Åland and Mainland Finland – import of goods

Changes to correcting a return submitted in the VAT special scheme

An error in a return submitted in the VAT special scheme is corrected in a later return. The change concerns tax periods beginning on 1 July 2023 or later. According to the current provision, an error must always be corrected in a return submitted for a later tax period. Following the legal amendment, however, it can also be corrected in a return for a previous tax period that is filed late, for example.

Further information: HE 226/2022, text in Finnish and Swedish (

Changes to social insurance contributions

For more information about the changes for 2023, see: Social insurance contributions

Excise duties

Changes to the Excise Movement and Control System in February

EMCS, or the Excise Movement and Control System is an electronic system for exchanging information between EU countries, and online reporting, by taxable persons, of movements between EU countries of products subject to excise duties, i.e. alcohol, alcoholic beverages, tobacco and liquid energy products. Changes will be introduced to the Excise Movement and Control System as of 13 February 2023. The products that must be reported over EMCS will not only include those under duty suspension arrangements but also the products for which the duty has already been paid in the country of departure. Taxable persons can use MyTax to send the EMCS reports or send them via an API. Purchases of alcohol by consumers who travel to other countries are not reportable in the EMCS system.

New excise duty classifications to concern soft drinks

A Government proposal concerns amendments to the rules on excise duties on soft drinks. The suggested amendments involve lower duty on sugar-free and low-sugar soft drinks, and correspondingly, increased excise duty on soft drinks containing more sugar. The suggested duty classification would include 6 different categories instead of the current 2 categories.

These amendments would be implemented by a Government Decree to be enacted in case the Commission agrees to affirm that the suggested national excise duties do not contradict the state-subsidy restrictions in force in the European Union.

Further information: HE 280/2022 , text in Finnish and Swedish (

Heating based on natural gas, changes to excise duties on liquid and gaseous fuels

There will be a reduced level of fiscal support offered to the sustainable type of natural gas used for heating and certain machinery. This fuel will no longer be exempt from excise duties. In the future, the natural gas used for above purposes is subject to €1.20 of excise duties per megawatt-hour, which matches the minimum level referred to in the Council Directive for the taxation of energy products and electricity.

More precise classification of duties is introduced for other liquid or gaseous fuels, not produced through sustainable bioprocesses. The above changes aim for improving clarity concerning duties to be imposed for transport use, heating use and other use.

Excise duty on tobacco will be raised

The Finnish parliament adopted a legal act outlining a gradual increase in 2022 and 2023 of the excise duty on tobacco. On average, the excise duty on cigarettes will increase by 13%, on roll-your-own tobacco by 40%, on pipe and cigarette tobacco by 24%, and on cigars and cigarillos by 31%. The increases are implemented in four stages during 2022 and 2023.

Changes to waste taxes

As of 2023, the level of waste tax per one tonne delivered to a dump site increases from €70 to €80. The base for this tax will be expanded. Accordingly, starting 2023, waste containing gypsum, originating in the construction industry, is also subject to waste tax.

Other changes

Improvements to the tax summary

The Tax Administration sends taxpayers a document called ‘tax summary’ on a regular basis, as appropriate. The information content in the summary consists of the taxpayer’s current state of affairs, balances, unpaid, outstanding amounts, or of offsetting other tax debts with the arriving amounts paid by the taxpayer in order to settle a certain unpaid tax.

The improvements to be introduced next year reflect the feedback received from taxpayers, as they focus on the document’s layout and information content. The content of the summary is re-organised: the reference and account numbers needed and the tax to be paid, including interest, can now be found at the beginning of the summary. A number of improvements were made to the columns and lines shown in the summary’s tables. Business taxpayers and others who normally receive the summary will notice the changes in their tax summary for January.

Tax offices no longer send out letters containing forms for agricultural/forestry tax returns – use MyTax to submit your return

Starting spring 2023, no blank forms are posted anymore to those who submit an income tax return for agriculture or forestry. We recommend logging in to MyTax to send the return, because details such as the undepreciated acquisition costs, reserves and forest deduction information confirmed in the previous year are pre-completed on the MyTax template. However, you can still file an income tax return on paper if preferred. If the submitter of an agricultural/forestry tax return is a death estate or a taxation partnership, the tax office will send the blank form by post in January as previously.

A new technical interface for companies that report amounts relevant to the credit for household expenses

Newly developed features make it possible for companies providing services to households or renovations to send information on the expense amounts to the Tax Administration directly. The interface will be operational at the beginning of 2023.

After the Tax Administration has received the confirmed expense amounts via the interface, the information is treated as the individual taxpayer’s base for the credit for household expenses. It will be saved in MyTax, and later also included as part of the pre-completed tax returns. Individuals can reduce their tax-card withholding percentage by virtue of having paid expenses that qualify for the credit for household expenses. The automatic feature of the new interface will later be developed further, enabling the Tax Administration to send a message to the individuals whose tax-card rate will probably be to high compared to the levels of credit they are entitled to.

Letters from the Tax Administration will have no personal identity codes

Most of the Tax Administration’s letters to individual taxpayers will no longer contain personal identity codes. This change is based on the Data Protection Ombudsman’s communication indicating that unless specific reasons make it necessary, the personal identity code of natural persons must not be quoted in correspondence.

Accordingly, the Tax Administration has evaluated the necessity of referring to individuals’ personal identity codes in tax correspondence, such as decision letters, etc. It has been agreed that a number of different letters from the Tax Administration will no longer quote the recipient’s personal identity code. The identity code numbers known as ‘artificial personal IDs’ will also be left out. However, quoting a personal identity code will continue to be necessary in the tax correspondence addressed to employers, other payors and comparable third parties where there is a justifiable need for identifying a natural person. Examples of such correspondence or documents include the tax card and the tax certificate.

The new wellbeing counties lead to changes to fiscal allocation between central and local government

As of 2023, part of the tax revenue that previously stayed with municipal entities is allocated to the State of Finland: A general decrease of 12.64 percentage points concerns municipal income taxes; this is compensated by a matching increase in state income taxes. Almost no changes are caused to the total income tax rate of individual taxpayers.

The wellbeing counties system will create a combined base of fiscal revenue for central and local government: various tax deductions that individuals have been entitled to in municipal and state taxation will now be granted according to uniform calculation rules. Deductions like the earned income allowance, the deduction for study grants and the basic allowance have previously only concerned an individual’s municipal income tax. With the new system, these tax deductions concern both state and municipal income taxes.

Tax rules and taxes in the Åland Islands are not discussed in the above summary.


This page was last updated: 30 December 2022 and 4.4.2023.

Page last updated 12/13/2022