Legal Alerts/3 Jan 2023

UPDATE: The Finnish Government Gives Proposal for Profit Taxes on Electricity and Fossil Fuels with some Amendments to the Draft Proposal

The Finnish Government has given a proposal for profit taxes on electricity and fossil fuels to the Finnish Parliament (Government Proposal 320/2022). The proposal includes some amendments compared to the draft proposal published in December 2022 (see our earlier Legal Alert on the draft proposal here). Compared to the draft proposal, the main amendments are the following:

  • The companies that only sell but which do not themselves produce electricity or are not members in a group of companies that produces electricity are exempted from the profit tax on electricity;
  • The amount of profit tax on electricity is 30% of the electricity business revenue that exceeds an annual return of 10% on the shareholders’ equity recorded in the differentiated balance sheet of the electricity business;
  • The costs of the electricity purchases incurred by another group company and the losses of another group company in electricity business can be considered when calculating the taxable revenue for the profit tax on electricity;
  • The amount of profit tax on fossil fuels is 33% of the profit that exceeds the set benchmark. The profit exceeding the benchmark is the business revenue that exceeds 120% of the average business revenue in the tax years 2018–2021.

The profit taxes are expected to be levied for the tax year 2023. The proposal is currently under reading in the Finnish Parliament.  

If you have any questions about the proposal or how it could affect your business, please contact the Borenius Tax team or your regular Borenius contact.

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Additional information

Henna Jovio



Anna-Riikka Nummi

Senior Associate