Finland's Ministry of Finance has opened public consultation on proposals to cut corporate tax rates and extend loss carry forward periods, aiming to boost competitiveness and attract investment as the country seeks to position itself below EU and OECD averages.
Finland’s Ministry of Finance has initiated a public consultation on significant corporate tax reforms designed to strengthen business competitiveness and stimulate investment. The proposed changes are scheduled to take effect on 1 January 2027.
Key tax reforms
The consultation focuses on three key proposed amendments: a reduction of the corporate income tax rate from 20% to 18%, a cut in the withholding tax rate on dividends, interest, and royalties paid to non-resident companies from 20% to 18%, and an extension of the loss carry-forward period from 10 years to 25 years, with the extended period applying to losses incurred from 2026 onwards.
Competitive positioning
The two percentage point reduction would position Finland’s corporate tax rate below both the EU and OECD averages. According to the European Union Taxation Trends report from 2023, the average corporate tax rate across EU member states stands at 21.2%. Finland’s rate has already declined from 26% to 20% between 2006 and 2014, reflecting broader tax competition trends.
The government estimates the corporate tax rate reduction would decrease annual tax revenue by approximately EUR 832 million, based on static calculations. However, officials anticipate long-term economic growth benefits as investment and business expansion effects materialise over time.
Support for growing companies
The extended loss carry forward provision specifically targets new and expanding businesses that typically generate losses during startup phases or when making substantial investments. This measure aims to support companies in sectors requiring lengthy product development cycles before commercialisation, such as technology and pharmaceuticals.
The reforms form part of the government’s mid-term growth strategy and will be incorporated into the 2027 state budget proposal discussions.
Deadline
Interested stakeholders have until 25 May 2026 to submit their feedback on the proposals, which were published on 28 April 2026.
