Finland’s 2027 Budget proposal would reduce the corporate tax rate from 20% to 18%, expand donation tax relief, fully index earned income tax brackets, and provide targeted tax cuts for low- and middle-income earners.
Finland’s government submitted its proposal for the 2027 Budget to Parliament (HE 175/2026) on 21 September 2026. The proposal’s tax measures are consistent with those outlined in the Ministry of Finance’s 6 August 2026 Budget Proposal for 2027.
The Budget Proposal for 2027 (HE 175/2026) introduces targeted changes to personal income taxation, corporate taxation, and charitable donation incentives aimed at improving household purchasing power, encouraging work and entrepreneurship, and supporting civic activity. Key measures include tax reductions for low and middle-income earners and a decrease in the corporate tax rate to 18%
Corporate income tax rate reduction
The corporate tax rate is cut by 2%, from 20% to 18%, starting in 2027. This follows the government’s proposed significant changes to corporate taxation on 17 September 2026.
Expansion and structural reform of donation deductibility
The proposal harmonises and expands the tax relief available for monetary donations across personal income tax (PIT) and corporate income tax (CIT):
- Tax credit vs. tax deduction: For personal income taxation, monetary donations will no longer be deducted from taxable income; instead, they will be granted as a direct tax credit against tax payable. For corporate income taxation, donations remain deductible from taxable income.
- Harmonised scope of eligible donees: The qualifying donee categories are aligned for both individual and corporate donors to cover:
- Universities, higher education institutions, or associated university funds receiving public funding, for purposes promoting science or art.
- Associations or foundations designated by the Finnish Tax Administration, for purposes supporting or promoting science, art, the preservation of Finnish cultural heritage, physical activity, sports, the well-being of children or young people, social welfare, or health.
National Income tax scale on earned income
To prevent tax drag caused by inflation and wage growth, full indexation adjustments are applied across all bracket thresholds on earned income tax bases.
The national progressive income tax scale applying from 1 January 2027 is structured as follows:
| Taxable Income (EUR) | Tax on Lower Amount (EUR) | Rate on Excess (%) |
| Up to 22,700 | 0 | 12.64% |
| 22,700 – 33,600 | 2,869.28 | 19.00% |
| 33,600 – 41,400 | 4,940.28 | 30.25% |
| 41,400 – 53,800 | 7,299.78 | 33.25% |
| 53,800 and over | 11,422.78 | 37.50% |
Inflation adjustment: The full indexation of earned income tax scale bases reduces state tax revenue by EUR 637 million in 2027 cash terms (EUR 695 million at the full annual level).
Targeted tax cut for low- and middle-income earners: In addition to indexation, taxation on low- and middle-income workers is reduced by EUR 230 million via an increase in the earned income tax credit, decreasing state tax revenue by EUR 181 million in 2027 cash terms (EUR 197 million annually).
