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Taxation of dog breeders – file your income and deduct expenses

The profit you make from selling dogs is taxable income. You must pay tax on the income you receive as a dog breeder (e.g. when you sell puppies), as well as on the money you make by selling an individual dog. Stud fees that you receive as the owner of a male dog and other such income are also taxable income.

Only expenses directly related to breeding activities are tax-deductible. General living expenses related to dogs, such as the feeding expenses or veterinary fees of the litter's dam, are not deductible.

You must keep a record of the income and expenses. The record must be based on receipts. Read more: Receipts and documentation.

Dog breeding is usually an income-generating activity or a hobby

In taxation, income and expenses related to dog breeding are treated as a hobby activity, an income-generating activity or a business activity, depending on the nature of the activity.

The nature of the activity affects the accounting and recordkeeping obligation, the reporting of income and expenses, and the right to deduct losses. In borderline cases, the Tax Administration assesses the situation as a whole, and the nature of the activity is determined based on the overall assessment.

If you breed litters in order to produce income, breeding is usually treated as an income-generating activity in taxation. 

Dog breeding is treated as a hobby if generating income is not the primary purpose of the activity. For example, selling a single litter can be treated as a hobby in taxation. If the expenses for a breeding activity treated as a hobby exceed the income the activity generates, i.e. you incur a loss, you cannot deduct the loss in taxation.

Read more about hobby activities, income-generating activities and business activities (in Finnish and Swedish, link to Finnish).

Expenses incurred from the puppies to be sold are tax-deductible

If you carry out breeding activities, you can deduct the expenses incurred from the generation of income. Expenses directly related to the breeding of puppies include, for example,

  • the stud fee
  • mandatory health examinations related to litters and breeding
  • expenses related to the feeding, veterinarian visits and microchipping of the puppies
  • expenses incurred from the accessories handed out with the puppies sold.

Other expenses are not deductible

You cannot deduct expenses incurred from the litter's dam, such as

  • the dam's purchase and feeding expenses
  • exhibition, trial or hobby fees
  • general health examinations
  • extra accommodation or space expenses
  • other expenses incurred from keeping dogs.

The dogs' general living expenses are non-deductible, regardless of whether breeding is regarded as a hobby, an income-generating activity or a business activity.

Selling an individual dog

Selling an individual dog is not a breeding activity. If you make profit, it will be taxed according to the provisions on capital gains. The dog's purchase price and purchase and selling expenses are deducted from the income you receive.

Read more about the taxation of capital gains (in Finnish and Swedish, link to Finnish).

How to file income and expenses on your tax return

How to file in MyTax:

If you breed dogs in order to produce income:

  • Report your income and expenses on the tax return under Other income – Production of income.

If you breed dogs as a hobby or occasionally:

  • Enter the amount of income in the section Other earned income.
  • Report the expenses that relate to the income under the section Production of income – Expenses for the production of other income than wage income – Expenses for the production of income relating to benefits and other earned income.
  • You can claim a deduction based on your actual expenses, but the deduction claimed cannot be higher than the income earned.

If you sell an individual dog, e.g. your own pet dog:

  • If you make a profit, report it on your tax return under Capital gains.

File in MyTax

Remember to keep a record of your income and the expenses related to the income. Do not enclose receipts with your tax return.

How to file on paper forms

Select a correct form:

When is dog breeding considered a business activity?

Large-scale dog breeding can also be a business activity. In this case, dog breeding is your main source of income or at least a significant source of secondary income. In addition, it must meet the general characteristics of business activities. Read more about the characteristics of business activities in the Tax Administration's guidance on business activities, income-generating activities and hobby activities in individual taxation (available in Finnish and Swedish, link to Finnish).

If you are a self-employed individual, file your business income and expenses on the business tax return (Form 5).

Dog breeding and VAT

If you carry out dog breeding as a business activity and your turnover exceeds €15,000 per accounting period, you must also register for VAT. More information about carrying out an activity as a business and about the VAT threshold for small-scale business (available in Finnish and Swedish, link to Finnish).

Read more:

Frequently asked questions

You can deduct expenses related directly to the litter, but the deductible amount cannot be higher than the income you receive from dog breeding. However, living expenses (e.g. the feeding or purchasing expenses of the litter's dam) are non-deductible. Also remember to report your income from the selling of the puppies.

If you incur a loss from your hobby activity, you cannot deduct the loss in taxation.

Report the income you receive from selling the puppies in the sale year’s taxation. In the sale year’s taxation, you can also deduct the expenses incurred from breeding and rearing the puppies in the year of birth and in the year of sale.

No, you cannot. Hobby activities involving the dam or sire of the litter are not directly related to dog breeding, and neither are the expenses arising from such activities. Therefore, such expenses are non-deductible. Expenses arising from trips to dog shows are also non-deductible.

If the mandatory health examination for breeding purposes is directly related to the income you receive from dog breeding, the expenses can be deducted in taxation.

Please note that there are different types of health examinations and not all of them are directly related to income from dog breeding. General health examination costs cannot be deducted from the income you receive from dog breeding.

When the dam is pregnant, any costs arising from examinations related to the pregnancy are tax-deductible.

Any expenses related to problems arising during labour are directly related to the breeding of puppies. Therefore, you may claim a deduction on these expenses in your taxation.

The deposit is considered your income only if you do not return it. When it becomes clear that you will not pay the deposit back, report the deposit in your tax return for that year.

Income from dog grooming may be considered income from a hobby activity, an income-generating activity or a business activity. See the instructions above at How to file income and expenses on your tax return.

No, you cannot deduct the expenses in your taxation because you receive no income from the activity.

The record and the receipts together must specify the income and related expenses in sufficient detail.
Page last updated 3/13/2024