Verovapaa

Verovapaa is a Finnish term describing something that is exempt from taxes. It is used to indicate incomes, goods, services, or entities that are not subject to taxation under Finnish law. The status can apply to individuals, organizations, or specific transactions.

In practice, verovapaa can arise in several contexts. An income item is verovapaa if it is not included in taxable income. Value-added tax (VAT) may not be charged on certain goods and services under the VAT Act, making those items verovapaa for the supplier. Some organizations, such as certain non-profit associations or charities, can also qualify for tax exemptions or special treatment under specific provisions.

The conditions and scope of verovapaa vary by law and context. Exemptions can depend on the purpose, the recipient, thresholds, or the organizational status, and they may be time-limited or subject to specific requirements. Tax authorities issue rules and guidance to define when a particular item or activity is verovapaa.

Common examples include various social benefits or scholarships that are not taxed as personal income, and certain healthcare, education, or cultural and welfare services that are exempt from VAT. Exports or certain intergovernmental transfers may also be treated as verovapaa under specific circumstances.

Understanding verovapaa requires consulting current Finnish tax legislation and the guidance of the Finnish Tax Administration (Verohallinto), as rules can change and may differ between income tax and VAT.