Background information

The government of Finland has increased the tax on electric and hybrid vehicles through an amendment to the Act on vehicle tax 1281/2003 [Ajoneuvoverolaki]. The increase affects both basic vehicle tax [perusvero] and the tax on driving power in vehicle tax [käyttövoimavero].

The amendment was presented as part of the 2025 budget proposal and is in line with the governments’ measures for fiscal balance. The government argues in their proposal that as the vehicle base in Finland has increasingly become electric, the tax incentives on these low-emission vehicles has harmed the tax base.

The new tax criteria will come into force on January 1, 2026. As vehicle tax is calculated on a daily basis and levied in advance for a 12-month tax period per vehicle, vehicle tax bills sent during 2025 will already include tax levied in accordance with the 2026 regulations.

Content of measure

The basic vehicle tax for fully electric cars will increase by approximately €53 and the driving power tax by an average of approximately €35 per year. The basic tax on rechargeable hybrid cars will increase by an average of approximately €37 per year. The driving power tax on rechargeable gasoline-powered hybrids will increase by an average of approximately €41 per year. The driving power tax on rechargeable diesel-powered hybrids will decrease by an average of approximately €140 per year. The basic tax on low-emission non-rechargeable hybrid cars will increase by approximately €0–11 per year.

Changes to vehicle tax are estimated to increase vehicle tax revenue by approximately €34 million in 2026.

The government has simultaneously lowered the tax rate on older, higher emission vehicles (Case FI-2025-1/3922).

Use of measure

At the end of 2023, there were approximately 2, 756 million passenger cars and 340,000 vans in use. Of these, approximately 87,000 were electric vehicles and 135,000 were hybrid vehicles

Target groups

Workers	Businesses	Citizens
Does not apply to workers	Sector specific set of companies	Applies to all citizens

Actors and funding

Actors	Funding
National government	National funds

Social partners

Social partners' role in designing the measure and form of involvement:

	Trade unions	Employers' organisations
Role	No involvement	No involvement
Form	Not applicable	Not applicable

Social partners' role in the implementation, monitoring and assessment phase:

• No involvement
• Main level of involvement: N/A

Involvement

No social partners left a statement on the consultation round

Views and reactions

No social partners left a statement on the consultation roun

Sources

• 20 December 2024: Key changes coming into effect in early 2025 in the administrative branch of the Ministry of Finance [Vuoden 2025 alussa voimaan tulevat keskeiset muutokset valtiovarainministeriön hallinnonalalla] (valtioneuvosto.fi)
• 10 July 2025: overnment proposal to Parliament for an act amending Section 11 and the appendix of the Vehicle Tax Act [Hallituksen esitys eduskunnalle laiksi ajoneuvoverolain 11 §:n ja liitteen muuttamisesta] (www.eduskunta.fi)