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Proposal: VAT on electricity from 24 to 10%, exemption of passenger transport

Electricity: 

  • Regarding electricity, the proposal is related to the measures introduced by the government in connection with the 2023 budget, which are intended to mitigate the effects of the increase in the price of electricity for households. 
  • The aim of the presentation is to lower the consumer price of electricity. The sharp rise in the price of electricity from the winter of 2021 has affected society widely.  
  • In order to mitigate the harmful effects of rising electricity prices on households, it is proposed that the VAT rate applicable to electricity be temporarily reduced from 24% to 10%.  
  • The measure would be valid from 1 December 2022 to 30 April 2023. Timing is aimed at reducing costs in the coldest season of the year, when household electricity consumption is at its highest due to the need for heating. 

Passenger transport

  • In terms of passenger transport, the proposal is related to the actions of Prime Minister Sanna Marini’s government, which aim to improve the purchasing power of households during a period of strong inflation. 
  • In order to reduce the consumer prices of passenger transport and thereby improve the purchasing power of households, it is proposed that domestic passenger transport be temporarily exempted from tax. The exemption would be accompanied by the right to deduct the tax included in the acquisitions.  
  • The measure would be valid temporarily from 1 January 2023 to 30 April 2023. The goal of timeliness is to focus the action on improving purchasing power as efficiently as possible. 

Source Eduskunta

 

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