Major Changes Announced in Finnish Corporate Taxation
Legal Alerts/28 Apr 2025
Major Changes Announced in Finnish Corporate Taxation
The Finnish Government’s 2025 Mid-Term Policy Review, published on 23 April 2025, introduces a series of legislative and regulatory measures designed to strengthen Finland’s economic growth, enhance the country’s investment appeal, and drive innovation. Central to these initiatives are targeted tax reforms.
Please find below an overview of selected tax measures.
Corporate income tax
- The corporate income tax rate will be lowered from 20% to 18% from 2027.
- The right to deduct losses will be extended from 10 years to 25 years, starting from losses in the 2026 tax year.
Private equity and venture capital
- To promote Finnish private equity investments, the Government will launch a reform based on an overall assessment to improve Finland’s ability to attract venture capital. The legislative amendments required to promote investments in Finnish private equity funds and venture capital funds will be assessed by spring 2026.
- Measures will be taken to develop a new fund structure in Finland that is similar to international models.
- Foreign investments into Finnish private equity and venture funds will be facilitated by changing tax procedures. The starting point would be that tax residence certificates would no longer be required from foreign investors. The proposed amendments would make it easier for foreign funds of funds and other transparent foreign investors to invest in Finnish funds.
- Investments made by non-profit organisations in private equity funds operating in the form of a limited partnership will be exempt from tax. The necessary amendments will be implemented starting from 2026. At the same time, the taxation of investments in private equity funds operating in the form of a limited partnership will be examined as a whole.
- The fund structures enabled by EU legislation will be actively implemented and the necessary amendments concerning them will be made to tax legislation (e.g. ELTIF funds).

Growth companies
- A reform of equity-based incentive plan taxation, including taxation of stock options, will be carried out by summer 2026, with the intention of creating the best tax regimes in Europe in this space.
- Tax neutral share-for-share transactions will be extended to cover transactions outside the EEA, and the currently strict requirements on the combination of cash and shares will be reviewed. These measures will facilitate corporate structuring and e.g. tax deferral in roll-over situations.
- The flat tax rate on employment income under the impatriate tax regime will be reduced from 35% to 25%.
M&A taxation
- An overall assessment of the tax treatment of mergers and acquisitions will be conducted and the necessary amendments made.
- Distortions that have arisen will be corrected. For example, the timing of income tax and transfer tax on earn-out will be set to the year when the earn-out basis is confirmed.
Other tax changes
- Finland will continue the new tax credit for large investments in clean transition, which started in 2025, if the EU rules allow for the extension.
- Tax reliefs for change of generation in businesses will be extended to underaged heirs.
- Real estate tax reform, where valuations are updated to market values, will be implemented gradually so that the tax base increases in a fair manner.
If you have any questions about this Legal Alert, please feel free to contact the undersigned or your regular Borenius contact.
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