Ministry of Finance begins legislative drafting of tourist tax

New legislation would give municipalities the option to collect a tourist tax, which would be a new source of income from tourism. Individual municipalities would decide whether to adopt the tax.

The Ministry of Finance has assessed the feasibility of adopting a tourist tax in Finland. A preliminary report has been drawn up and key stakeholders consulted in preparation for the drafting work. Based on the initial report, the Government decided to begin legislative drafting of a tourist tax.

“A tourist tax would give municipalities that are popular tourist destinations a way to collect more income from tourism. The goal is to create a simple and clear tax model. Municipalities themselves would decide whether to adopt the tax,” said Minister of Finance Riikka Purra.

Several EU countries already have tourist taxes

A tourist tax is typically a tax paid in connection with short-term accommodation. Several EU countries already have this kind of tax. The goal is to cover costs that the municipality incurs from tourism.

As this would be a new kind of tax in Finland, adopting it requires that provisions on it be laid down in an act. The act would define the conditions under which municipalities could adopt the tax if they so wish. The tax revenues would remain with the municipality collecting the tax. 

In order for different forms of accommodation to be treated equally, the tourist tax would apply to stays by both domestic and foreign travellers and to all forms of temporary paid accommodation. 

The tax would be a moderate percentage of the price of accommodation, as is the case with tourist taxes in other European countries. The details of the tax will be refined as the drafting of the new legislation proceeds. 

Timetable

The Ministry of Finance has started drafting the new legislation. A draft government proposal will be circulated for comments in the Lausuntopalvelu.fi public consultation service. 

If the new legislation were to enter into force in 2027, municipalities would be able to include a decision to adopt the tax in their budgets for 2028 and start collecting the tax that year. No pilot project for the tax will be organised.

Inquiries:
Ella Luikku, Ministerial Adviser, tel. +358 295 530 221, ella.luikku(at)gov.fi