Finland: Government presents 2026 budget to parliament, proposes reduced corporate taxes

The 2026 budget proposal lowers corporate and CO2 fuel taxes while tightening crypto reporting, adjusting VAT, and raising taxes on vehicles, tobacco, alcohol, and soft drinks.

Finland’s government has presented the 2026 budget proposal (HE 99/2025) to the parliament on 22 September 2025.

This follows after the government announced the results of its two-day meeting on measures for the Budget for 2026 on 2 September 2025.

One of the key aspects of the 2026 budget proposal is reduced corporate tax rates. Starting in 2027, the government set proposals to reduce the corporate tax to 18% to enhance entrepreneurship.

The government will continue to invest in improving transport connections, enhancing expertise, and promoting R&D. The most significant increases in funding will be allocated to accelerating research and development carried out by businesses.

To boost purchasing power, the government decided to lower the tax rate on commodities from the 14% VAT rate to 13.5%.

The budget for 2026 also increases excise duties on wines and other fermented beverages. Additionally, the excise duty on alcoholic drinks will be indexed, taking into account the previously introduced higher duties on strong alcoholic beverages.

The 2026 budget also includes proposals for DAC8 crypto reporting requirements, and cuts to CO2 fuel taxes, as well as increased taxes on vehicles and tobacco. It also includes proposals for amending the individual income tax rates, which go into effect from 1 January 2026.

Personal income tax is assessed on a progressive basis, with rates increasing as taxable income rises. The structure is divided into bands that specify a fixed amount of tax on the lower portion of income, with an additional percentage rate applied to any excess within each bracket. This ensures that higher earners contribute proportionally more in tax. Below is the rate table for the national income tax levied on earned income: