On 8 August 2013, the Finnish Ministry of Finance published its Budget proposals for 2014. All the proposals will be discussed by the government on 28-29 August 2013 before the final set of proposals is presented to parliament in September 2013. If parliament approves the measures they will be effective from 1 January 2014. A summary of the proposals is given below:

(a) Corporate taxation

–       the corporate income tax rate is to be decreased to 20% (currently 24.5%);

–       the tax base is to be broadened by abolishing and limiting the existing tax incentives;

–      the deductibility of interest expenses is to be subject to further limitations;

–     the depreciation and amortization of long-term investments is to be calculated per item (currently a pool basis applies)

(b) Individual taxation

–     the progressive nature of tax on investment income is to be increased by means of a reduction in the threshold after which the top tax bracket applies to EUR 40,000 (currently EUR 50,000);

–    the deductible amount of mortgage interest is reduced to 75%; and

–   the maximum amount of the earned income credit that may be offset against national tax on earned income and the basic allowance for municipal tax purposes are to be increased.