Finland’s Ministry of Finance has announced that the Government has approved the General Government Fiscal Plan for 2026–2029 on 23 April 2025. The decisions aim to strengthen the foundation for economic growth while prioritising the security of Finland and its citizens. The growth package will be funded through a balanced approach that combines increasing public revenue with reducing expenditure.

Key tax measures include corporate tax cuts, extended loss carryforward period, reduced VAT rates, among others.

Corporate tax rates

The corporate tax rate will be reduced by two percentage points to 18% to boost entrepreneurship. Additionally, businesses will be permitted to carry forward corporate losses for up to 25 years, commencing with confirmed losses from the 2026 tax year.

Tax credits for clean transition 

The Finnish government plans to support large-scale investments in clean transition by introducing a tax credit. Starting in 2029, this initiative is expected to have an annual impact of EUR 60 million.

Withholding tax on companies

The withholding tax for key company personnel will be reduced to 25%, and a tax incentive will be introduced for citizens moving back to Finland.

VAT 

Value added tax (VAT) will be reduced by lowering the tax rate for goods subject to the 14% rate to 13.5% from 2026 onward, applicable for applying to items like food and medicines;

Excise duty 

Excise duty on soft drinks, nicotine pouches, and electronic cigarettes will see an increase. Additionally, the tax on mined minerals will also be raised.

Marginal tax rates

The government will reduce the top marginal tax rate on earned income to 52%, enhancing work incentives and increasing purchasing power.