Finland is moving to formally suspend its 1996 tax treaty with Russia from 1 July 2026, following the President's decision in March and Russia's earlier unilateral suspension of key provisions in response to EU sanctions.
The Finnish Ministry of Finance has launched a public consultation on 20 March 2026 regarding a draft proposal to suspend the Finland-Russia Income Tax Treaty of 1996, as amended in 2000.
Due to the urgency of aligning domestic law with the presidential decision, the consultation period has been shortened, with submissions required by 2 April 2026.
The suspension is set to take effect on 1 July 2026, following the President’s decision on 13 March 2026. Both the treaty suspension and the corresponding domestic legislation must come into force simultaneously to be legally effective.
Finland and Russia have maintained a tax treaty since 1996, updated in 2002, designed to prevent double taxation and tax evasion. However, Russia unilaterally suspended certain provisions in August 2023 in response to EU economic sanctions, leaving Finland applying the treaty on a one-sided basis.
The practical implications are anticipated to be minimal, as trade between the two countries has declined substantially following Russia’s invasion of Ukraine. While some individuals may face double taxation in specific situations, the overall economic effect is expected to be limited.
A formal government proposal is being prepared since the original treaty was enacted through legislation and therefore requires parliamentary action to suspend.
Earlier, the Finnish government had decided to suspend its income tax treaty with Russia on 12 March 2026.
