In mid-June, the Government submitted a legislative proposal to Parliament containing several tax changes that, if adopted, will affect the taxation of many Finnish taxpayers. The intention is for the legislation to enter into force as soon as possible, although the timetable will depend on the parliamentary process.
The following changes have been proposed:
- Household Tax Credit (Kotitalousvähennys): The maximum deduction would increase from €1,600 to €2,100. The deduction rate for services purchased from companies would rise from the current 35% to 40%. If a household employs a worker directly, 15% of the wages paid could be deducted instead of the current 13%. In addition, employer-related social costs connected to the wages would also become deductible.
- Reduced Deductible Threshold for Commuting Expenses: The deductible threshold for travel expenses between home and the workplace would be reduced to €800 in 2026. The current threshold is €900.
- Higher Tax-Free Sports and Culture Benefit: Employees would be able to receive tax-free sports and culture benefits of up to €540 per year instead of the current €400. At the same time, the scope of the benefit would be expanded to cover activities such as fishing and hunting.
If the Government’s proposal is approved, the changes are expected to take effect retroactively for the 2026 tax year.
The Government has also proposed an additional energy tax refund for agricultural producers. The refund has been prepared on an accelerated timetable to help farmers manage increased energy costs. The proposal will be reviewed by Parliament, and the aim is for the additional refund relating to 2025 to be paid as soon as possible after the legislation enters into force. Farmers will not need to submit a separate application for the additional refund for 2025. The Finnish Tax Administration will calculate the refund based on the quantities of light fuel oil and biofuel oil previously reported in the applicant’s 2025 energy tax refund application.
Any additional refund for 2026 will be paid together with the regular energy tax refund through an increase in the refund amount per litre of fuel oil.