Business enterprise imports a motor vehicle to Finland for tax-exempt use

Businesses are entitled to use a vehicle without paying car tax, provided that specific requirements are met.

Submit the Declaration of tax-exempt use 

In most cases, if a business enterprise imports a motor vehicle to Finland for tax-exempt use or enters such a vehicle into service in Finland, a declaration of tax-exempt use must be submitted to the Tax Administration. In some circumstances, however, no declaration of tax-exempt use is required.

The business responsible for declaring the tax-exempt vehicle to the Tax Administration must submit the declaration before operating the vehicle in Finland for its tax-exempt purpose. The Tax Administration will endorse the submitted declaration, but that does not mean that the Tax Administration has checked or affirmed that the requirements for tax-exempt operation are fulfilled.

Instead, the vehicle’s user and the business that entered the vehicle into service are the parties that have the responsibility for checking that all the requirements are fulfilled. If there are no valid reasons for tax-exempt business driving, the vehicle is subject to car tax.

Keep your confirmation letter with you in the vehicle

The driver must keep the Tax Administration’s letter that confirms the declaration of tax-exempt use in the vehicle. The letter, together with other related documents, shows that the driver is entitled to operate the vehicle on the road without paying car tax. These papers must be presented to the police or to the customs authority on request.

The Tax Administration may contact the business enterprise to request additional information to be provided, or request a written account of the vehicle’s tax-exempt use. The Tax Administration may also ask the business to provide documents to help determine its right to tax-exempt use.

If the requirements for tax-exempt use are not met

If there are no valid reasons for tax-exempt driving, the Tax Administration instructs the vehicle’s first user to file a tax return, and imposes both a car tax and a late-payment penalty charge. Because the first user of the vehicle has neglected their obligation to file the return and declaration, the Tax Administration will also impose a punitive tax increase and a penalty charge due to negligence.

Read more about the punitive tax increase and negligence penalty in car taxation in “Guidance on consequences of non-compliance with the rules on car tax” — Seuraamusmaksut autoverotuksessa (in Finnish and Swedish, link to Finnish).

Negligence penalty for failure to report tax-exempt use

You may have to pay a negligence penalty charge because of the neglected declaration of tax-exempt use if:

  • You do not file a declaration of tax-exempt use even though you are under obligation to do so.
  • You file a declaration of tax-exempt use but it is inaccurate.

The Tax Administration will not impose a penalty in the case of minor negligence or if there is a justified reason for the negligence.