The Finnish Government has announced a temporary application of the zero-rate to domestic passenger transport. This transport is currently subject to the 10% reduced rate.

‍Timeline

The temporary reduction will apply from January 1, 2023 through April 31, 2023.

‍The new rates

All passenger transport services in Finland will be included, such as train, bus, taxi, plane, and ship transport. Advance payments also fall within the scope. The proposal aims to improve the purchasing power of households during a period of extreme inflation.

Only domestic transport will be impacted by this change, as cross-border transport is already subject to the zero-rate. In addition, the proposal does not affect the passenger transport operator’s right to input VAT deduction.

Companies must be ready to update their systems to maintain compliance with the new rate.

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