Finland proposes new tourist tax on accommodations

The Finnish Ministry of Finance is preparing legislation for a proposed tourist tax that would allow municipalities to tax accommodation within their regions. Under the proposal, municipalities would have the voluntary option to implement a tax of 2% to 5% on the VAT-free price of accommodation. This tax would apply to all forms of temporary, paid accommodation, including hotels, cottages, and short-term rentals, with revenues being transferred to the respective municipalities.

If passed, the law would come into effect in March 2027, with the tax being applied starting in early 2028. The proposal has drawn significant opposition from various business and industry organizations, including the Confederation of Finnish Industries (EK), Palta, Suomen Yrittäjät, Smal, Finnair, and SOK.

Critics argue that the administrative costs of implementing such a specific tax would be disproportionately high compared to the projected national revenue, which is estimated to be between a few million and twenty million euros. The Confederation of Finnish Industries specifically noted that the tax would be a new type of 'point tax' foreign to the Finnish system and cautioned against introducing such measures when the tourism sector has already seen significant increases in tax burdens, such as rising VAT rates.