Proposed tourist tax in Finland

The Finnish Ministry of Finance is developing legislation that would allow municipalities to voluntarily implement a tourist tax on accommodations. The proposed levy, ranging from 2% to 5% of the VAT-free price, would apply to hotels, cottages, and short-term rentals, with revenues directed to the respective municipalities.

If the legislation is passed, it is expected to take effect in March 2027, with tax collection beginning in early 2028. National revenue from the measure is estimated to be between a few million and twenty million euros.

The proposal has faced significant opposition from various industry stakeholders, including the Confederation of Finnish Industries (EK), Finnair, and the Finnish Travel Association (Smal). Critics argue that the administrative costs may outweigh the projected revenue and express concern that the tax adds an unnecessary burden to a tourism sector already facing rising VAT rates. The Confederation of Finnish Industries has specifically characterized the measure as a new type of ‘point tax’ that is foreign to the existing Finnish system.