- Finland plans to reduce the reduced VAT rate to 13.5% starting in 2026
- The proposal is part of measures to support economic growth and reduce the tax burden on low and middle-income earners
- The General Government Fiscal Plan for 2026-2029 includes reducing work taxation by EUR 1 billion and lowering the corporate tax rate to 18%
- Defense spending will increase by EUR 3.6 billion by 2029, with improved resources for internal security
- The reduced VAT rate applies mainly to food and medicine, decreasing government revenue by approximately EUR 145 million
- Lower VAT may lead to competitive advantages for businesses due to reduced product prices
- This would be the second VAT rate change in two years, following an increase in the standard VAT rate in 2024
- Final decision pending, and legislative procedures must be completed before implementation
Source: vatabout.com
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Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
