Temporary changes in the Finnish VAT legislation in January-April 2023
Reminder: The normal collection of value added tax (VAT) on domestic travel within Finland will come back into effect on 1st of May, 2023.
Applicable taxes are provided by automatic pricing without additional steps from travel agencies (YF tax to appear in pricing when applicable).
The exemption period of 0% VAT is noted on tickets and travel related services that have been issued between 1 January – 30 April 2023, and when changed on/after 1st of May to a later travel date the normal 10% VAT is to be collected at the time of change. Additional information can be found on VAT instructions page under Reservation & Ticketing section.
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The Finnish Government has made a decision to temporarily remove the value added tax (VAT) of 10% for passenger transportation and related services purchased on 1 January – 30 April 2023. This concerns domestic travel within Finland as well as the domestic portion of the journey when having an international connecting flight from Helsinki Airport with at least a 24 hours’ stopover in Helsinki (meaning there needs to be more than 24 hours between the flights). VAT is collected as YF tax code on tickets and EMD when applicable.
The VAT will be 0% for domestic flight tickets purchased on 1 January – 30 April 2023, regardless of customers’ travel dates. As an examples:
- customer buys flight ticket Helsinki-Oulu on 20 December 2022 for travel on 15FEB -> 10 % VAT is applied
- customer buys flight ticket to Helsinki-Oulu on 1 February 2023 for travel on 15FEB -> 0 % VAT is applied
The VAT exemption will apply also to transport-related travel extras that are normally subject to 10% VAT, meaning for example seats and bags. However, the VAT removal does not concern travel extras whose VAT level is 14% or 24%.
As no VAT is collected on top of the ticket base fare and other taxes, the total ticket fare will decrease accordingly. EMD prices for travel extras will also be temporarily adjusted to reflect the VAT change.
Applicable taxes are provided by automatic pricing and during the exemption period 0% VAT will apply automatically without additional steps from travel agencies (no YF tax to appear in pricing).
Detailed instructions on how to handle ticket change and refund scenarios will be updated by 31st of December to VAT instructions page found under Reservation & Ticketing section in Easy.
More information about this temporary VAT removal is available on vero.fi (in Finnish)
What does this timeline mean in practice?
Tickets and/or certain travel extras purchased between 1 January and 30 April 2023, which normally have a VAT of 10%, are exempt from VAT regardless of the travel dates.
However, it is good to note that making changes to reservation after 30 April may cause VAT to be charged - even if the original reservation is made in January-April with VAT of 0%.
Does the exemption apply per sales date (ticket issuance date)?
The exemption is determined by sales date when there are advance payments involved. Ie. new sales ticketed, or tickets reissued during the period of applicability will be exempt of the VAT.
Will the 0% VAT apply also on flight related ancillary services and service type of fees that are currently subject to 10% VAT (under the IATA tax code YF)?
Yes, the VAT exemption will apply also to ancillary services that are normally subject to 10% VAT, meaning for example seats and bags.
Which flights does the VAT removal apply to?
The VAT removal concerns domestic flights within Finland as well as domestic portion of the journey when connecting to international flight with at least 24 hours’ stopover in Helsinki (meaning there needs to be more than 24 hours between the flights).
Will the VAT be removed regardless of the purchase channel?
Yes, the removal of the VAT will be reflected in all channels where Finnair’s tickets and ancillary services can be purchased.
What is the Finnish VAT applicability overall, only concerning sales in Finland, transfer/stopover?
- The Finnish VAT is applicable for Finnish domestic travel, despite of point of sale.
- The Finnish VAT is applied for fully domestic e-tickets and domestic portion in an international ticket when there is a domestic stopover (more than 24 hours between the flights).
- Ancillary services are subject to the Finnish VAT for fully domestic travel and also on the domestic sector in connection with an international transfer if the service is sold on that flight separately (e.g. a seat advance booking). Baggage type of services have a through fee so no VAT is applied with international transfers. The removal of the VAT concerns those travel extras that are normally subject to 10% VAT. Any other services, subject to VAT other than 10% are not within the scope of applicability for the temporary removal.
What is shown in the e-ticket customer receipt (ITR) during 0% VAT?
During the VAT exemption period, ITRs will indicate the following: "Where applicable, the Finnish passenger transport services VAT of 10% is 0% when the purchase is made on 1 January – 30 April 2023."
What is shown in the EMD customer receipt during 0% VAT?
During the period of VAT exemption EMD receipt print outs will indicate the following: "Where applicable, the Finnish passenger transport services VAT of 10% is 0% for sales 1Jan-30Apr23."