Services for individual taxpayers on the vero.fi website, photographed in Helsinki. LEHTIKUVA
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The Finnish Tax Administration has reminded taxpayers to review their claims for deductions ahead of key tax return deadlines in April. Authorities report widespread confusion about what expenses qualify, particularly regarding household credits and commuting costs.
Only certain costs for home renovations, repairs and caregiving services are eligible for the household expense credit.
In 2023, the Tax Administration rejected €700,000 in claims related to ineligible construction expenses.
“The household credit applies to repairs or renovations initiated by the individual in their own home, not to broader housing company works or new constructions like garages or saunas,” said Anna-Leena Rautajuuri, Head Tax Adviser.
Examples of qualifying services include home cleaning, child or elderly care, nursing, gardening, and, from 2024 onwards, in-home physical and occupational therapy. To qualify, services must be purchased from a registered provider.
Claims for deductions can now be submitted with pre-completed tax returns. The deadlines fall on 15, 22 or 29 April, depending on the individual’s assigned date.
Rautajuuri also recommended that individuals assess whether they qualify for a home office deduction or commuting expenses. For 2023, 758,000 people received commuting deductions totalling €1.9 billion, while 500,000 benefited from household credits worth €1.4 billion.
“People often wrongly assume they can deduct the cost of driving to work simply because it’s convenient or necessary for their routine,” said Rautajuuri. “Using your car to take children to school or for errands does not make those trips deductible.”
Tax rules stipulate that commuting costs must be calculated using the least expensive form of transport. Driving a private car is only deductible in specific situations, including:
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No access to public transport
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Walking distance to and from stops exceeds 3 kilometres one-way
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Waiting time during round-trip exceeds 2 hours
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Commutes start or end between midnight and 5:00 a.m.
For 2024, an own-liability threshold of €900 applies to commuting costs. No deduction is granted unless this amount is exceeded. The maximum deductible commuting cost is €7,000.
The household credit covers 40% of the labour cost for qualifying services, with a cap of €2,250 annually per taxpayer. Claims must exceed €150, and payments must be made to providers listed in the Prepayment Register.
Rautajuuri noted that deductions are not applicable for periods of unemployment, holidays or unpaid leave.
“We encourage everyone to take a moment to check whether their deductions are valid and supported with proper documentation. This avoids unnecessary processing delays or rejected claims,” she said.
HT
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Source: www.helsinkitimes.fi
