verottomuus

Verottomuus is a legal status in tax systems where certain incomes, transactions, or entities are not subject to taxation. It is achieved through statutory provisions that declare specific items tax-exempt. Verottomuus differs from deductions or credits: exemptions remove the item from the tax base entirely rather than reducing the tax payable.

The scope of verottomuus varies by jurisdiction. It can apply to individuals' income (for example, certain social benefits or scholarships), to businesses (for example, exemptions for specific activities or for non-profit organizations), or to goods and services (for example, value-added tax exemptions for essential goods or export transactions). Exemptions can be unconditional or conditional, time-limited, and may require registration or reporting.

In practice, verottomuus affects revenue collection and tax equity. Governments use exemptions to support public policy goals (social welfare, education, investment in particular sectors) and to simplify administration in some areas. At the same time, exemptions can create complexity and potential distortions if not well-targeted, leading to discussions about eligibility criteria, compliance costs, and potential loopholes.