Helsinki (03.02.2021 - Heikki Jokinen) In 2019, a total of 476 million euro was granted by way of tax credits for household expenses in Finland. Since 2001, taxpayers have been able to claim costs for the acquisition of household services such as cleaning, renovations at home or in the summer house and child care to gain tax credit deductions for these services.
At present, the price of work can be reduced by 40 per cent for tax purposes, up to a maximum amount of 2,250 euros per person. The rules and maximum amounts that one can deduct have been changing over the years, as the issue is politically charged. The maximum amount ever that was deductible has been 3,000 euro and maximum percentage 60.
The purpose of the tax break is to improve employment in the service sectors included in the scheme and reduce tax evasion.
However, a new study by the Labour Institute for Economic Research PT and the Institute for Economic Research VATT suggests that these household deductions fail to meet both objectives. The study by Jarkko Harju, Sami Jysmä, Aliisa Koivisto and Tuomas Kosonen is published by the Prime Minister's Office.