Tax credit for electricity – payers of very high costs can receive a credit
You can be entitled to a tax credit if electricity costs are high in your permanent home. The credit is a temporary measure in response to increased prices. It is available for tax year 2023 only.
How the credit is calculated
- Calculate the sum of your paid electricity invoices for 4 months: January, February, March and April 2023. Include the price with VAT and the basic monthly charge. No tax credit is available concerning electricity transmission. Accordingly, your calculation must not contain any charges related to the invoices you receive for transmission of electricity.
Note: Do not include electricity for December 2022 in your calculation even if you might receive an invoice for electricity with a January 2023 due date for paying it. However, your calculation should contain the electricity for April 2023 although the due date for payment might be in May. - If the total 4-month cost exceeds €2,000 you are entitled to the tax credit.
- The size of the tax credit is 60% of the part of the cost going over the 2,000-euro threshold. Maximum credit is €2,400 per 1 permanent residence. If you use more than one permanent residence, the credit can still only concern one permanent residence. No tax credit for electric energy is available for summer cottages, holiday homes, etc.
- There is an own-liability threshold of €100 jointly for the tax credit for electricity costs and all other tax credits for household expenses. This means that if you claim no other credits for household expenses, the 100-euro threshold is subtracted from your credit for electricity. However, the tax credit for electricity has no impact on the work costs that qualify for the usual credit for household expenses or on their maximum creditable amounts. You can divide the credit between you and your spouse or the person you live with.
Example: You pay €3,000 for electricity in your permanent dwelling from January to April 2023. You given credit only for the cost that exceeds €2,000, in this case for €1,000. The credit is 60% × (€1,000) = €600.
If you claim no other credit for household expenses, you must first subtract the 100-euro credit threshold from the €600 above. Accordingly, you get €500 in tax credit.
Example: Your partner owns a one-family house. You and your partner live there together on a permanent basis. Electricity for January, February, March and April 2023 cost €3,000. If each of you pays part of the cost, each of you must claim credit separately.
The credit is given for the electricity cost that exceeds €2,000 – in other words, for €1,000. Assuming that you and your partner divide it 50-50, credit base is €500 for each of you. The credit is 60 percent of that, i.e. 60% × (€500) = €300.
Credit thresholds concern each person individually. For this reason, each of you must first subtract €100 unless you claim tax credits for other household expenses as well. After the above subtraction, each of you get €200 in tax credits.
The credit reduces your taxes directly
The credit is subtracted from your taxes directly. There may be circumstances where the credit amount is greater than the individual taxpayer’s total taxes. If the credit is greater than your taxes, the Tax Administration will automatically deduct the remaining credit from your spouse’s taxes.
For estimates of how much will be withheld from your income, use the withholding calculator.
See an example of the calculation result
For checking your income and deductions before you estimate upcoming and future taxes, see also your 2023 tax prepayment decision in MyTax: First go to the Activities tab and then click Decisions and letters under Messages and communication.
If your total taxes for the year are low, so the credit for electricity would not be useful, you can apply to Kela, the Social Insurance Institution of Finland, for temporary electricity assistance. For more information, see the website of Kela.
Note: You cannot get the tax credit for electricity and Kela-paid electricity assistance or Kela-paid social assistance at the same time.
Claiming the credit in 2023
You can benefit from the credit faster by informing the Tax Administration of your electricity cost already in 2023. This lowers your tax-card withholding percentage already in 2023.
We will release further instructions soon.
You can estimate your energy costs beforehand and request a new withholding rate in early 2023
You can make an estimate of your household’s electricity costs for January, February, March and April and send it to the Tax Administration for a withholding calculation. If you do this, you get a lower withholding percentage rate on your tax card for the remaining months of 2023.
Later, when you know the actual costs, you can ask for a new tax card again if necessary. The final deadline for the exact amounts is by the pre-completed tax return’s deadline in the spring of 2024.
Making changes to your tax card later in 2023
Another alternative is to ask for a revised tax card some time later in 2023, at a time when your electric power company’s invoicing for the first months of 2023 is ready, so you can use all the right amounts of costs for January – April. If you do this, you get a lower withholding percentage rate on your tax card for the remaining months of 2023.
Checking and adding information to your pre-completed tax return in 2024
If, during 2023, you requested changes to your tax card and submitted a claim for the tax credit for electricity, your pre-completed tax return will show this information and the amount of the credit that was given. Check the pre-completed amounts and information and make corrections if needed.
If you did not request changes to your tax card, add your credit claim to the pre-completed tax return. The credit will be taken into account in your tax decision for tax year 2023. You will receive the decision by late October 2024.
Read more
- Government proposal to the Finnish parliament (in Finnish and Swedish)
- Tax card
- Tax credit for household expenses
- Pre-completed tax return