Finland’s government has proposed reducing the corporate income tax rate from 20% to 18% and extending the loss deduction period for companies and partnerships from 10 to 25 years from 2027.
Finland’s government announced, on 17 September 2026, that it proposed two significant changes to corporate taxation, effective from 2027. The alterations target both the tax rate structure and loss carry-forward provisions for businesses.
Lower corporate tax rate
The government plans to reduce the corporate income tax rate from 20% to 18%. This reduction applies to domestic corporate entities and non-resident companies receiving income in Finland. Non-resident taxpayers will also face an 18% withholding tax on dividends, interest, and royalties sourced from the country.
Extended loss deduction period
Corporate entities and partnerships can currently deduct business losses over 10 years. The Government proposes extending this period to 25 years. Natural persons operating businesses will retain the existing 10-year deduction window.
Implementation timeline
The new 18% corporate income tax rate takes effect in the 2027 tax year. Prepayment assessments will reflect the lower rate for tax year 2027 and beyond, once legislation passes. The extended loss deduction period applies to losses incurred from tax year 2026 onwards. Non-resident withholding tax changes apply to income received after the law enters force.
Minimal administrative burden
The changes demand little action from corporations. Since corporate tax is based on information provided in annual tax returns, the rate reduction operates automatically with no separate filing requirements. The Tax Administration already confirms and deducts business losses annually, so the extended 25-year period creates no additional administrative work for companies.
The government expects to introduce the legislation at the beginning of 2027.
