Tax-exempt use for demonstration purposes
To operate a motor vehicle for demonstration means that people can test drive it and that the vehicle is presented commercially or showcased to potential buyers. For a company that imports, manufactures or sells motor vehicles, it is exemptible from car taxation to operate a vehicle as described above, provided that this activity is part of the company’s business.
Requirements of tax-exempt use
To operate the vehicle for demonstration can be exempted from car tax only if:
- The vehicle has a transfer permit issued in Finland, or has its vehicle registration in another EEA country. Read more about the transfer permit (traficom.fi).
- The vehicle is in demonstration for up to 9 months, no longer, counting from the date when it is demonstrated for the first time.
- No potential customer or buyer operates the vehicle for longer than 72 hours.
- The vehicle has not been in Finland before for demonstration (it is not important for purposes of this rule whether the previous demonstration in Finland lasted for a shorter time than 9 months).
Submit a declaration of use exempt from car tax
The party that imports the vehicle, or the party that enters the vehicle into service, must inform the Tax Administration of the tax-exempt operation before the vehicle is driven on Finnish roads.
MyTax opens on the Your tax types tab. First select the All tax types tab, then Activities relating to car tax. Then click the link for Declaration of tax-exempt use.
After you submit the declaration, the Tax Administration sends you an acknowledgement of receipt. You will see the acknowledgement letter in your MyTax mailbox where you can print it out.
Keep a copy of the letter with you in the vehicle and present it to the police or Customs if necessary.
Please note: The letter is not a statement of approval regarding tax-exempt use. Make sure that the motor vehicle will only be driven for the tax-exempt purpose. You must do this before the driving begins. If there are no valid reasons for tax exemption, your use of the vehicle is subject to car tax. You can request an advance ruling on how the act on car tax (Autoverolaki 1482/1994) is applied to the tax assessment of your vehicle. Read more about requests for an advance ruling.
An API interface to submit the Declaration of use of a demonstration vehicle is available. Read more about Vero API (technical instructions).
If you cannot log in to MyTax to send the declaration, and if you cannot send it through the API, complete and submit Form 1250 on paper (Declaration of use of a demonstration vehicle — Ilmoitus ajoneuvon esittelykäytöstä). You will receive the acknowledgement of receipt by post. The letter is sent to the address you have indicated.
Vehicle registration in an EEA country or an existing transfer permit
Vehicles in tax-exempt demonstration use must either be registered in an EEA country or have a Finnish transfer permit. Read more about the transfer permit (traficom.fi).
You can get a transfer permit at an inspection station. You need to have submitted the declaration of use of your demo vehicle. Show the letter you have received from the Tax Administration acknowledging receipt of the declaration. If you submitted your declaration via the API, you can print out the Tax Administration’s API message and show it at the inspection station.
Keep a driver’s log
The company that demonstrates the motor vehicle must keep a driver’s log, either on paper or in an electronic format. The log records act as evidence that you have fulfilled the requirements for tax-exempt use. All the driving must be logged. The following items of information are required:
- start and end time of the trip
- the odometer readings at start and end
- purpose of the trip
- who the driver of the demonstration vehicle is
Save the logbook for at least 6 years. The counting of time for the 6-year requirement begins at the start of the year that follows the year when the vehicle was demonstrated for the first time. If requested, you must show the logbook to the Tax Administration. If you have not complied with the above rules regarding the driver’s log, the Tax Administration can impose a penalty charge.