Finland unveiled its 2027–2030 spending framework featuring an 18% corporate tax rate alongside alarming budget deficits averaging EUR 14.9 billion annually, prompting calls for major fiscal consolidation.
Finland’s Ministry of Finance has published a proposed decision outlining its draft spending framework proposal on 26 February 2026, which includes the government’s fiscal plans for the 2027–2030 budget cycle.
The framework includes sweeping changes across corporate taxation, personal income levies, indirect taxes, stamp duties, and more. The key change includes a two-percentage-point reduction in the corporate income tax rate, lowering it to 18% starting in 2027.
This follows Finland’s parliament finalising and approving the 2026 Budget on 19 December 2025, adopting key tax measures, including a planned reduction of the corporate tax rate to 18% from 2027 and the 2026 income tax schedule.
Other tax measures include:
Excise duties: Tobacco tax will be raised, contributing an estimated EUR 50 million in additional annual revenue from 2027. On the other side of the ledger, the CO2 component of transport fuel taxation will be reduced.
Transfer taxes: Transfer tax rates remain unchanged during the framework period. The rate on real estate transfers stays at 3%, while the rate on securities, including shares in companies and housing corporations, remains at 1.5%.
Inheritance tax: The government will extend the repayment period for inheritance tax and reduce the late payment interest margin. The repayment period is extended, and late payment interest is lowered, producing a EUR 1 million gain in 2027 before turning to a EUR 2 million reduction in 2028.
VAT: No major VAT changes are planned for 2027–2030.
Gambling: Finland’s gambling reform combines a lottery tax increase with the removal of Veikkaus’s long-standing corporate income tax exemption. The state-owned monopoly will now be subject to the new 18% corporate tax rate, with the two measures together expected to generate EUR 125 million in additional tax revenues in 2027 and a further EUR 81 million in 2028.
The budget aims to stimulate entrepreneurship through the corporate tax cut and increased public investment in transport infrastructure, skills development, and business-led research and development. Additional measures include implementing DAC8 crypto-asset reporting rules, reducing CO2-related fuel taxes, and raising taxes on vehicles and tobacco.
The proposed spending framework for 2027–2030, however, reveals an average annual deficit of EUR 14.9 billion that Finance Minister Riikka Purra called “shocking.” The deficit is projected to reach EUR 12.6 billion in 2027, climbing to approximately EUR 16 billion by 2030.
Compared to spring 2025 forecasts, the fiscal position has deteriorated primarily due to declining tax revenues and lower emissions trading income. Additional pressure comes from salary adjustments, rising interest payments on government debt, and increased EU membership fees.
The Ministry estimates that Finland must implement fiscal consolidation measures worth EUR 8–11 billion during the next electoral term. However, the EU’s excessive deficit procedure does not require additional adjustments this year or next, with compliance measures needed only through 2028.
The government will negotiate the public finance plan during budget framework discussions on 21–22 April.
Final approval is scheduled for 30 April at the State Council plenary session, based on an updated economic forecast to be released in April. The 2027 state budget will then be drafted according to the approved plan.
