Finland's Tax Changes in 2026

From 1 January 2026, Finland implements a series of tax and administrative reforms. The government is advancing a “digital-first” principle, the remote-work and union-fee deductions are abolished, the reduced VAT rate falls — and at the same time the tax-free thresholds for gifts and inheritance rise.

Here are the most visible 2026 changes at a glance:

Key Changes Affecting Individuals

Digital-first principle: tax correspondence goes electronic

From early 2026, the Finnish Tax Administration broadly applies the digital-first principle, affecting how tax documents are delivered.

• If you use electronic services such as OmaVero, official letters are generally sent only electronically.
• Individuals who do not use electronic services may still receive paper mail.
• In special situations (e.g. guardianship or authorisations), paper letters may still be sent.

Adjustments to personal income-tax deductions

From 2026, two major changes affect work-related deductions, potentially raising taxable income for some taxpayers:

• The remote-work deduction is abolished: the standard/fixed deduction for working from home is generally no longer available. Only separately rented or purchased workspace costs may still qualify.
• Trade-union membership fee deduction abolished: union and labour-market organisation fees are no longer deductible.
• Unemployment-fund fees remain deductible: but from 2026 they may not appear automatically in withholding. Report them in OmaVero or check your pre-completed return.
• Commuting deduction unchanged: annual maximum remains €7,000, with a €900 personal deductible.

Employee social insurance contributions: 2025 vs. 2026

2025 2026

TyEL ages 17–52

7,15 %

7,30 %

TyEL ages 53–62

8,65 %

7,30 %

TyEL ages 63+

7,15 %

7,30 %

Healthcare component

1,06 %

1,10 %

Daily-allowance component

0,84 %

0,88 %

Unemployment insurance

0,59 %

0,89 %

The most notable change: the TyEL contribution for employees aged 53–62 falls from 8.65% to 7.30% (−1.35 pp), directly increasing net pay for this group. Even though some other rates rise slightly, this is one of the most tangible net-income gains of 2026.

Taxable employee benefits

Several fringe-benefit values and rules change in 2026:

• Bicycle benefit: tax exemption abolished (benefits agreed before 24 Apr 2025 may stay tax-free for the agreed period; employer-purchased bikes up to 5 years).
• Plug-in hybrid company cars: the €85/mo reduction for vehicles registered after 2021 is abolished → taxable value rises.
• Fully electric cars (zero-emission): the €170/mo reduction continues.
• Charging benefit: €30/mo for EVs, €20/mo for plug-in hybrids.

Travel expense reimbursements

Mileage reimbursement decreases, while daily allowances and meal compensation rise slightly.

Item	2025	2026	Δ
Mileage allowance	€0.59/km	€0.55/km	↓€0.04
Full daily allowance (domestic)	€53	€54	↑€1
Partial daily allowance (domestic)	€24	€25	↑€1
Meal compensation	€13.25	€13.50	↑€0.25

Gift and inheritance tax relief

Inheritance tax is only payable on estates exceeding €30,000.

Other personal-tax changes

• The child-related tax credit rises by €55, to €105 per child per year (double for single parents). It is deducted directly from tax payable.
• Key-employee withholding tax 32% → 25%, with scope extended to Finnish citizens returning from abroad and the applicable period set to 60 months.
• Pensions: earnings-related pensions rise by 0.88% (index), the national pension index by 0.47%. The pension surtax threshold rises from €47,000 to €60,000.
• Municipal tax: 36 municipalities raise and 4 lower their rate; the average rises to 7.57%. View municipal tax rates

Key Changes Affecting Businesses and Entrepreneurs

VAT reduction: 14% → 13.5%

From 1 January 2026, the reduced VAT rate of 14% falls to 13.5%, applying mainly to food, restaurant services (excluding alcohol), medicines, accommodation, passenger transport, books, and sports and cultural events. VAT on sweets and chocolate stays at the 13.5% food level.

For businesses, the 0.5 pp change typically means two strategies: pass the benefit to prices (better price competitiveness) or absorb it into margin (a buffer against rising costs).

Employer social insurance contributions

Although total cost may fall slightly, the structure of contributions changes. Recalculate your 2026 labour-cost budget.

Contribution	2025	2026	Δ
TyEL contract-employer base rate	25.28%	24.85%	↓0.43 pp
TyEL temporary-employer rate	26.28%	25.85%	↓0.43 pp
Employer health insurance	1.87%	1.91%	↑0.04 pp
Employer unemployment insurance	0.20%	0.31%	↑0.11 pp
Average pension contribution	17.38%	17.10%	↓0.28 pp
Total employer cost (approx.)	19.45%	19.32%	↓0.13 pp

Excise tax reforms

Category	Direction in 2026
Transport fuels	Tax burden reduced (petrol & diesel)	↓
Alcohol	Increased, linked to CPI automatic adjustment	↑
Tobacco & nicotine products	Increased; EU import limit 1,000 g	↑
Soft drinks	New sugar-based six-tier model	◆
Mining & data-centre electricity	Tax benefits removed → higher burden	↑

Other business-tax changes

• Forestry deduction improves: annual deduction limit from capital income 60% → 75%, and the deduction base from acquisition cost 60% → 75%.
• Loss carryforward extends 10 → 25 years (for losses confirmed from the 2026 tax year). Supports long investment-cycle businesses.
• General tax reference number: companies can pay several taxes with one reference number (in force 18 Nov 2025), reducing “wrong reference” errors.
• Industry classification TOL 2008 → TOL 2025: the Tax Administration maps automatically — check your main industry in YTJ/OmaVero if you have several activities.
• Crypto-asset reporting tightens: provider reporting obligation begins; first reports in 2027 (covering 2026).
• Financial-sector customer bonuses are more likely to be taxable capital income.
• Mining tax rises 0.6% → 2.5%; electricity-tax benefits for mining and data centres are removed.

How to prepare for the 2026 changes

The reforms reflect three lines: digitalisation of services, targeted tax measures and enhanced supervision.

For individuals

1. Update your tax card in time — withholding may change as deductions are removed.
2. Review deduction details yourself (e.g. unemployment-fund fees) — not everything transfers automatically.
3. Set up electronic notifications — enable Suomi.fi/OmaVero messages and keep contact details current.

For businesses

1. Run a “system-parameter health check” — payroll, contributions, benefits, VAT 13.5%, reference numbers.
2. Review TOL 2025 — don’t rely blindly on the automatic update.
3. Set an internal rule for year-end transactions — advance payments, gift cards, platform settlements.
4. Run a quick pricing & margin calculation of the VAT change (see the calculator above).
5. Treat enhanced supervision as a project — make documentation routine, not a year-end scramble.

What can Talous SK do for you?

We help turn “tax changes” into practical steps:

• Tax card and deduction review — key deductions and withholding set up correctly.
• Company “2026 parameter check” — payroll / social insurance / fringe benefits / VAT / POS / online-banking templates.
• Cost and cash-flow analysis — changes as monthly euro impacts, clearly visualised.
• Process implementation — advance payments, gift cards, platform settlements.

We understand Finnish taxation — and what it means to run a business in Finland as an entrepreneur. Preparing in advance is always more manageable than fixing issues afterwards.