Taxation in Finland
Taxation is one of the key factors affecting companies' operating environment and the decision where to locate. Taxation must be competitive and predictable.
The Finnish tax system must be well functioning, stable and predictable. It should bring competitive advantage to Finnish companies and Finland, so that companies would see Finland as an attractive environment to invest and do business. Tax policies can also speed up the double transition (towards green and digital business). International competitiveness of the Finnish companies must be considered when making changes to taxation.
The current competitiveness of Finland's corporate tax rate must be retained
In the global world, we compete constantly with other countries, e.g. in attracting investments and talent, as well as when selling various products and services.
The competitiveness of Finland's corporate tax rate and corporate tax system must be constantly evaluated and improved in order to attract companies and activities with high value add. The business environment and taxation must also be predictable.
- The prerequisites for entrepreneurship and ownership must be constantly developed. They create well-being and prosperity for the entire society. The entirety of corporate and capital taxation should promote entrepreneurship and Finnish ownership.
- Taxation should be simple, functional, and predictable.
- Finland should actively participate in EU projects aimed at simplifying and digitizing tax reporting. The advances of the real-time economy must also be promoted in taxation reform projects in Finland and in the EU (e.g. VAT for Digital Age).
R&D tax incentive to speed up the digital-green transition
Competitiveness and value creation require large tangible, intangible and personnel investments, all of which can also be influenced by tax tools. To speed up the digital-green transition, a permanent, broader R&D tax incentive is being drafted. R&D tax incentive will especially support the increase in R&D innovation investments of SME and midcap companies. The model must be supportive, clear, predictable and administratively light and neutral.
The R&D tax deduction must cover the employment costs incurred from the company's own R&D activities, as well as externally purchased R&D services. The model must cover all R&D activities and must not include a project requirement.
Other Technology Industries of Finland’s tax policies in short:
1) Free deduction rights to machinery and equipment investments
The results of R&D activities must be scalable and transformable into production and sales. Keeping manufacturing in Finland also promotes that R&D activities stay here. The current accelerated depreciation right for machines and equipment should be expanded to a permanent free depreciation right.
2) Tax on earned income should be lowered
The technology industries need 130,000 new experts in the upcoming ten years. Strict taxation is a significant challenge for attracting skilled workers. Tax on earned income should be lowered to attract skilled workers from Finland and abroad.
3) The current tax model of intergenerational transfer of business must be retained
The tax model for intergenerational transfer of business is important for the continuity and development of companies' operations. In addition, the inheritance tax payment period should be extended to ten years in situations where the actual possession of the inherited property is received later.
4) Updating the property taxation must not lead to unreasonable tax inceases
5) Sustainable taxation is green, digital and fair
Submission regarding revision of energy taxation directive
6) Finland's interests must be taken into account in the international tax reforms