Finland’s government has proposed reducing the corporate tax rate by two percentage points to 18% from 2027 as part of a broader package of measures to support entrepreneurship and economic growth, alongside extended loss carryforward periods and enhanced business deductions.
Finland’s government has announced the 2027 budget proposal, on 1 September 2026, with the intention to stimulate the economy through targeted tax cuts for low- and middle-income earners and a significant reduction in the corporate tax rate to 18%.
The budget’s key tax measures are:
Corporate and entrepreneurial taxation
- Lower corporate tax rate: The corporate tax rate is reduced by two percentage points to 18% to support entrepreneurship and growth. To protect municipalities from a loss in revenue, their share of the corporate tax distribution will be adjusted accordingly.
- Support for startups and talent: The taxation of employee stock options in unlisted companies will be postponed from the time of exercise to the moment the underlying shares are sold.
- Loss carryforwards and deductions: The period for deducting business losses is significantly extended from 10 years to 25 years. The entrepreneur deduction will be increased, and the donation deduction will be expanded and increased.
- Infrastructure exemption: Critical security-of-supply infrastructure projects will receive an exemption from certain interest deduction limitations.
- Investment tax credit: The existing investment tax credit will be extended.
- Entrepreneur deduction: The deduction available to entrepreneurs will increase from 5% to 5.5%.
- Stock options: For unlisted companies, taxation of stock options will shift from the time of exercise to the time when the shares are transferred.
Consumption, excise, and harm taxes
- Harm tax increases: Excise taxes on tobacco and alcohol will be increased by a total of EUR 50 million. Additionally, the gambling system reform will eliminate Veikkaus Oy’s corporate tax exemption and raise the lottery tax rate. Veikkaus Oy is a Finnish state-owned betting company that operates under a national gambling monopoly.
- Transportation tax relief: The carbon component of fuel taxes and the basic vehicle tax will both be reduced.
- Cancelled and withdrawn tax measures: The planned expansion of the waste tax is cancelled because there was insufficient evidence of usage targets for the proposed taxable waste categories. The government is also withdrawing a previously planned tax subsidy for data centres.
Local and accommodation taxation
A new accommodation tax framework will allow municipalities to introduce a local accommodation tax from 2028.
Real estate tax reform
The government will continue studying the real estate tax reform, but it will not be enacted during the current parliamentary term, leaving the preparation work for the next government.
Individual and labour taxation
- Tax cuts on earned income: Taxation on work will be lightened by EUR 230 million, primarily targeting low- and middle-income earners. Additionally, inflation adjustments (index adjustments) to the earned income tax parameters will be applied across all income levels.
- Household expenses deduction: The temporary increase to this deduction will continue through 2027 to encourage household purchases of cleaning and care services.
- Vouchers and commuter deductions: The tax-free limit for sports and cultural vouchers is increased and their scope expanded. Conversely, a prior increase in the self-deductible threshold for commuting expenses will reduce tax revenue collection in 2027.
Sports, culture, and charitable donations
- Sports and cultural benefits: The scope of tax-exempt sports and cultural vouchers will be expanded, with higher maximum benefit limits starting in 2026.
- Charitable donations: The tax deduction for charitable donations will be expanded and increased.
Earlier, Finland’s Ministry of Finance announced the draft budget for 2027 on 6 August 2026, which included several significant corporate tax measures.
