Proposed corporate tax changes include expanded donation deductions, stricter crypto reporting (DAC8), anti-dividend tax avoidance measures, VAT rate adjustments, reduced CO2 transport fuel taxes, and higher taxes on electric/hybrid vehicles, tobacco, alcohol, and soft drinks. 

Finland’s Ministry of Finance has published its 2026 budget proposals on 8 August 2025.

Government parties will negotiate the proposed tax measures during the budget meeting on 1-2 September 2025.

The following tax changes are expected to come into effect in 2026.

Corporate Taxation

Corporate taxation proposals include the expansion of the donation deductions, an increase in forest clearance, and the development of regulations on comparative information, which is set to impact various tax categories, including income tax, capital income tax, value-added tax, and inheritance and gift tax revenue.

Additionally, other measures include preventing the minimisation of dividend taxation through share exchange arrangements and expanding the reporting obligation of crypto asset service providers (i.e., DAC8 rules).

VAT

The reduced VAT rate has been adjusted from 14% to 13.5%. Additionally, public broadcasting services will now fall under this reduced VAT rate, aligning them with the updated taxation framework.

Carbon Tax

The CO2 tax on transport fuels will be reduced. The tax subsidies for zero-emission company cars are extended until 2029, while vehicle taxes for electric cars and plug-in hybrids will increase.

Other Taxes

The proposed tax changes include an increase in tobacco taxes, specifically targeting nicotine pouches and e-liquids, alongside a rise in alcohol taxes for wine and other fermented beverages, coupled with alcohol tax indexation.

Additionally, there is an increase in the soft drink tax and the elimination of electricity tax subsidies for data centres and mining operations.

Individual Taxation

  • The individual tax reforms proposed in the 2026 budget reduced taxation for low- and middle-income earners, with a lower top marginal tax rate of about 52%.
  • The formal home office and bicycle benefits are abolished.
  • The inward expatriate tax rate drops to 25%, with new incentives for Finnish nationals returning home.
  • Inheritance and gift tax thresholds are raised, and the interest rate on inheritance tax due is reduced.