Tax administration increases credits for household spending, switches to sustainable energy | News
Some of the deductions apply to the use of household cleaning services as well as other forms of household help, such as child care or the care of the elderly.
The Finnish tax administration has announced a series of changes to the tax credit and deduction model for 2022.
The measures include a significant increase in the tax credit available for household expenses incurred for housework, nursing and care services. The deduction will go from 40% to 60% for business expenses specified on an invoice and the maximum deduction will go from 2,250 to 3,500 euros.
However, the credit threshold will remain at 100 euros per year, as before.
The change applies to the use of household cleaning services and other forms of household help, such as caring for children or the elderly.
Likewise, the tax credit offered to help households switch from oil heating to more sustainable energy sources will also be increased from 40% to 60%. However, the credit available for other forms of renovations remains unchanged at 40%.
Petri Manninen, a chief tax office inspector, told Yle that the authority wanted to support the move away from oil heating because it is a significant environmental issue.
The credit is available if an oil-heated fireplace switches to more sustainable energy sources, such as a solar panel system.
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“In the case of regular housework, nursing and care, a two-year pilot project has begun to examine the effect of increases in deductions on employment in these sectors,†Manninen said.
The move away from oil heating will be further supported by similar increases over the next five years, Manninen added.
The tax credit increases are “significant”
Chief Economist Mikael Kirkko-Jaakkola of the Taxpayers Association of Finland told Yle that he considered the increases “significant”, especially the deduction on household services such as cleaning.
“You actually get a maximum discount of 60% on that cleaning job,†he said, adding that he hoped that increasing household deductions would encourage more Finns to use services such as home cleaning, babysitting or elder care.
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In 2020, a total of 439,750 people in Finland benefited from some form of household-related tax deduction, figures from the tax administration revealed. However, only one-fifth of the total number of deductions was related to household, childcare and eldercare services.
The remainder, mostly significant, was related to renovation work.
Pilot project reminiscent of the Swedish model
The tax administration’s two-year pilot project has notable similarities to the model currently in use in Sweden, Kirkko-Jaakkola pointed out.
“There is also a corresponding deduction for households, where renovation work receives a smaller reduction than cleaning, childcare and elderly care services. The same model will now come to Finland at least for a period of time. some time, â€he said.