Finnish tax authority corrects misinformation on ice swimming sauna VAT rates

The Finnish Tax Administration has clarified that ice swimming sauna businesses must apply a 25.5% VAT rate—not the reduced 13.5% rate reserved for sports services—contrary to widespread claims of a recent policy change. The correction follows reports that some operators had incorrectly used the lower rate, potentially costing them up to €100,000 annually in back taxes.

According to Juha Perttola, a senior tax specialist at the agency, the 13.5% rate applies only to exercise-related services, not relaxation or wellness activities. “There has been public discussion suggesting a change in the tax rate, but no such change has occurred,” Perttola stated in an email to national broadcaster Yle. He emphasized that individual businesses’ tax treatment depends on whether their core offering qualifies as a sports service.

Operators like Rasmus Saarni and Leo Railevirta, who run Pereensaari Sauna in Pirkkala, called the enforcement “deeply unfair” after learning their VAT rate would nearly double. “This is physical activity—swimming in ice water is just as demanding as any workout,” Saarni argued, noting that sauna use supports the exercise. The pair are absorbing the 12-percentage-point hike—amounting to roughly €100,000 yearly—rather than passing costs to customers, cutting into funds for operations and investments.

The tax authority’s stricter interpretation took effect in early 2025, though some businesses had already faced audits under the updated guidelines. Industry advocates warn the financial strain could force closures, particularly for smaller operators.