Finland to increase VAT by 1% in 2013

15 August update to this story - the Finish government this confirmed that it will pass this proposal to raise Finnish VAT to the Parliament for approval.

22 March 2012

The Finnish government has today proposed a 1% increase in the standard VAT rate to 24% from January 2013.

Unlike many other European countries - including France, Italy and the UK - which have been forced into VAT increases to fund spiralling state deficits, Finland has a relatively low sovereign debt level.  However, concerns around its ageing population and low growth prospects mean it still needs to introduce a range of tax hikes.  The Finnish VAT rise is seen as an important measure to help retain the country's AAA credit rating.

In the past 12 months, there have been many rumours of a VAT rise, including a VAT increase of 2%.  However, fears around the impact on consumption led the increase being capped at 1%.

Confirmation of the above Finnish VAT increase will follow, including the implementation date.

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