Excise duties are indirect taxes on the consumption or sales of specific products. Excise duties are collected for fiscal reasons but they are also intended to promote social and health policy objectives as well as environmental and energy policy goals. Excise duties are levied on products manufactured in Finland and products imported into Finland.
Excise duties are product-specific, which means that the amount of duties paid is based on the number of products consumed in taxable use or products supplied for taxable use (products released for consumption). There are two types of excise duty in the EU: excise duties that have been harmonised by directives and excised duties that are set by individual Member States. Harmonisation means that the products are subject to excise duty in all EU Member States and that minimum tax rates have been set for these products. There are also product groups for which the excise duties are set at national level.
The harmonised excise duties are as follows:
- Excise duty on tobacco products
- Excise duty on alcohol
- Excise duty on liquid fuels
- Excise duty on electricity and certain fuels
National excise duties and tax-like charges:
- Excise duty on soft drinks
- Excise duty on beverage containers
- Waste tax
- Oil waste duty
- Oil damage duty
- Strategic stockpile fee
There are separate tax acts for each of the product groups listed above. Provisions on the assessment procedure for all these tax types are contained in the Act on Excise Duties.
Harmonised excise duties
The excise duty on alcohol and alcoholic beverages is levied on beer, wine, other fermented alcoholic beverages, intermediate products and ethyl alcohol. The tax applies to alcoholic beverages intended for human consumption and ethyl alcohol containing more than 1.2% alcohol by volume, as well as beer containing more than 0.5% alcohol by volume.
The excise duty on tobacco products is levied on cigarettes, cigars, cigarillos, smoking tobacco and the fine-cut tobacco for the rolling of cigarettes. The excise duty on tobacco products is also levied on other products containing tobacco and on products comparable with tobacco products manufactured from substances other than the tobacco plant. A national excise duty is also levied on cigarette paper and (from 1 January 2017) on electronic cigarette liquids.
The excise duty on liquid fuels is levied on motor and heating fuels, such as petrol, diesel oil, light and heavy fuel oil, biofuels, liquefied petroleum gas and jet fuel.
Electricity and certain fuels
The excise duty is levied on electricity and certain fuels, such as coal, natural gas, fuel peat and pine oil. The excise duty on electricity is graded into a lower (II) and a higher (I) category. The lower duty is levied on separately metered electricity used in industrial manufacturing, data centers and professional greenhouse cultivation.
National excise duties and tax-like charges
A national excise duty is levied on soft drinks. Taxable products include water beverages, juices as well as various concentrates and powders intended for preparing beverages. The excise duty is also levied on certain foods for particular nutritional uses, sports drinks, energy gels as well as soy and oat beverages.
Excise duty on beverage containers
Retail containers of alcoholic beverages and soft drinks are also subject to national excise duty. The purpose of the excise duty on beverage containers is to encourage more environmentally friendly use of beverage containers. However, containers that are included in a deposit-based functioning return system and that can be refilled or used for the recovery of raw material are exempt from the excise duty. No excise duty is levied on containers made of liquid packaging board.
Oil waste duty
Oil waste duty is levied on lubricating oils and preparations to cover the expenses arising from the treatment of oil waste. Motor and heating fuels are exempt from the oil waste duty as they do not generate oil waste.
Oil damage duty
The oil damage duty is levied on oil which is imported into or transported through Finland and which is subject to oil damage duty. The oil damage duty revenue is deposited in the Finnish Oil Pollution Compensation Fund. The Finnish Oil Pollution Compensation Fund provides reimbursement for the costs of oil spills and oil spill response on land and at sea when the cause of the incident is unknown or the culpable party is unable to pay the compensation.
Waste tax is levied on waste deposited at landfills. All waste for which there are established recycling or recovery methods is subject to waste tax and the landfill operators are the parties liable to pay the tax. Sites where only soil or materials of bedrock origin are deposited or where waste is processed or recovered are not landfills subject to waste tax.
Strategic stockpile fee
In connection with the excise duties on electricity, coal, natural gas and liquid fuels, the Government also collects a strategic stockpile fee which is transferred to the National Emergency Supply Agency. The purpose of the strategic stockpile fee is to ensure that the functions essential to the livelihood of Finland’s population, the country’s economy and national defence can be maintained in an emergency.
Tax liability and suspension of excise duty
Excise duties are levied on products manufactured in Finland, received from another EU Member State or imported into Finland from outside the European Union. Under the duty suspension arrangement, products subject to excise duty can be manufactured, processed, held and moved without payment of excise duty. The purpose of the arrangement is to facilitate the free movement of products between Member States. Under the duty suspension arrangement, products may only be moved between authorisation holders (authorised warehouse keepers, registered consignees and registered consignors). A temporary registered consignee may also receive a specific product batch under the duty suspension arrangement. The liability to pay the tax arises when a product subject to excise duty is released for consumption in Finland. The release for consumption takes place when the duty suspension arrangement no longer applies to the product.
Are you liable to pay excise duties?
If you are liable to pay excise duties as part of your commercial activities, you can submit an application to the Finnish Tax Administration for authorisation as an authorised warehouse keeper, a registered consignee, a registered consignor or a tax representative in distant sales.
A temporary registered consignee is a natural or legal person that, as part of their business, may receive a specific number of products subject to excise duty from a specific consignor during a specific period from another Member State or from a place of importation located in Finland under the duty suspension arrangement. You can register as a temporary registered consignee in the electronic excise duty declaration service.