On 13 December 2022, the Finnish tax administration has released an explanation of tax changes for 2023. Some of them are legislative changes proposed by the Government but not yet debated in the parliament. The proposals related to corporate taxation are summarized below:
- A Government proposal envisages a permanent tax incentive for business enterprises that conduct research and development operations, consisting of a basic deduction related to existing R&D costs, and an increased deductible amount that will depend on how much the company’s R&D activity has grown. According to the Government proposal, the basic additional deduction would be available starting tax year 2023 and the increased additional deduction from 2024.
- The rights to deduct interest will be limited. The deduction rule is based on an exception from the general rule. The exception cannot now be used in situations where the consolidated balance sheet indicates that at least 20% of interest payments have gone to parties that own a significant part of the group’s shares.
- Excise duty on tobacco will be raised. The excise duty on cigarettes will increase by 13%, on roll-your-own tobacco by 40%, on pipe and cigarette tobacco by 24%, and on cigars and cigarillos by 31%. The increases are implemented in four stages during 2022 and 2023.
