Finland Corporate Tax 2026: 20% CIT Rate, VAT 25.5% & Business Guide
What taxes does your business pay in Finland in 2026? Flat 20% corporate rate, 25.5% VAT, R&D deductions, withholding taxes, and filing rules for Oy, branch offices, and sole traders.
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Tax Residency and Rates
A company is a Finnish tax resident if it is incorporated in Finland or has its place of effective management in Finland. Residents pay 20% CIT on worldwide income. Non-residents pay 20% CIT only on Finnish-source income through a permanent establishment. There is no distinction in rate between retained and distributed profits at the company level.
Finnish residents: 20% on worldwide income
Non-residents: 20% on Finnish-source income via permanent establishment
No local or municipal income tax on companies
Pillar Two global minimum tax rules apply from financial year 2024 onwards
Planned CIT reduction to 18% from January 2027
Osakeyhtiö (Oy) — Limited Liability Company
Corporate Tax Rate
20%
Flat rate on profits
Minimum Share Capital
No minimum
Removed since 2019
WHT on Dividends (non-residents)
20–30%
Reduced by treaties
Most common business form in Finland
Separate legal entity, limited liability
Profits taxed at 20% at company level
Dividends from other Finnish Oy companies often tax-exempt
At least one director must reside in the EEA
Toiminimi — Sole Trader / Self-Employed
Tax Rate
Progressive
State tax 0–44.25% + municipal avg. 7.57%
Capital Required
None
No minimum
Liability
Unlimited
Personal assets at risk
Business income split into earned and capital income
Capital income portion taxed at 30% (34% above €30,000)
No separate legal entity
Full personal liability for debts
Suitable for freelancers and small businesses
Branch (Sivuliike) of Foreign Company
Tax on Finnish Profits
20%
CIT on Finnish-source income
No Branch Profit Tax
0%
No extra WHT on repatriated profits
Liability
Parent Company
Parent fully liable
Taxed only on Finnish-source income at 20%
No withholding tax when remitting profits to the parent
Must register with Finnish Trade Register and Tax Administration
Can benefit from R&D deductions if R&D activities are in Finland
Subject to same group contribution rules as resident companies
VAT (Arvonlisävero / ALV)
VAT Rates in Finland 2026
Finland's standard VAT rate is 25.5% — one of the highest in the EU. Two reduced rates apply. The 13.5% rate covers food, restaurant and catering services, books, accommodation, passenger transport, and animal feed (reduced from 14% as of 1 January 2026). The 10% rate covers newspapers and magazines. Zero rate applies to exports and intra-EU supplies. VAT registration is mandatory once annual turnover exceeds €20,000.
Standard rate: 25.5% — most goods and services
Reduced rate: 13.5% — food, restaurants, books, transport, accommodation (from Jan 2026)
Reduced rate: 10% — newspapers, magazines
Zero rate: exports, intra-Community supplies
Exempt: healthcare, education, financial and insurance services
VAT registration threshold: €20,000 annual turnover
VAT Filing
VAT returns are filed via the MyTax (OmaVero) online portal. The filing period is monthly by default. Companies with annual turnover up to €100,000 may file quarterly; those up to €30,000 may file annually. The deadline is the 12th of the second month following the reporting period.
Monthly filing: default for most businesses
Quarterly filing: turnover up to €100,000 per year
Annual filing: turnover up to €30,000 per year
Deadline: 12th of the second month after the period
Deductions, Incentives & Loss Rules
R&D Tax Deductions
Finland offers strong R&D tax incentives to attract innovative companies. There are two parallel schemes in 2026. First, a general combined R&D deduction applies permanently from 2023 onwards: a 50% additional deduction on eligible R&D costs (minimum €5,000, maximum €500,000 per year), plus an extra 45% deduction on any year-on-year increase in R&D spending. Second, a cooperation-based deduction of 150% applies on R&D subcontracting costs paid to recognised research organisations (for tax years 2022–2027, minimum €5,000, maximum €500,000).
General R&D deduction: 50% of eligible R&D costs (from 2023, permanent)
Extra deduction for R&D growth: 45% of the increase vs. previous year
Cooperation deduction: 150% on R&D subcontracting with research organisations (2022–2027)
Minimum deduction: €5,000 per year; Maximum: €500,000 per year
Green Investment Tax Credit
A 20% tax credit applies to large-scale investments in the net-zero economy, including renewable energy, green hydrogen, and industrial decarbonisation. The maximum credit is €150 million per company or group. The credit is deducted from corporate income tax over 20 years from the tax year the investment is completed.
Credit rate: 20% of eligible investment costs
Eligible sectors: renewable energy, green hydrogen, carbon capture
Maximum credit: €150 million per company or group
Spread over 20 years starting from year of investment completion
Loss Carryforward
From 2026, tax losses can be carried forward for 25 years (extended from the previous 10-year limit). This applies to losses confirmed for the 2026 tax year and later. There is no loss carryback. Losses expire if more than 50% of shares in the company change hands during the loss year.
Loss carryforward: 25 years (for losses from 2026 onward)
Previously: 10 years
No loss carryback
Losses lost if >50% of shares change ownership during the tax year
Withholding Taxes
WHT on Dividends, Interest, and Royalties
Dividends paid by Finnish companies to non-resident corporations are subject to 20% WHT; to non-resident individuals, 30% WHT. These rates are frequently reduced by Finland's 80+ tax treaties (typically to 0–15%). Dividends paid to qualifying EU parent companies under the EU Parent-Subsidiary Directive (with ≥10% shareholding) are exempt from WHT. Interest paid to non-residents is generally not subject to WHT. Royalties to non-resident companies are taxed at 20%; to non-resident individuals at 30%.
Dividends to non-resident companies: 20% WHT (reduced by treaties)
Dividends to non-resident individuals: 30% WHT (reduced by treaties)
EU Parent-Subsidiary Directive: 0% WHT if parent holds ≥10%
Interest to non-residents: 0% WHT (generally exempt)
Royalties to non-resident companies: 20% WHT
Finland has tax treaties with 80+ countries reducing WHT rates
Employer Taxes & Social Contributions 2026
Employer Social Security Contributions
Finnish employers pay several mandatory social charges on top of gross wages. The largest is the employment pension insurance (TyEL) at an average of 17.10% for employers. Unemployment insurance is graded: 0.31% on wages up to €2,509,500 and 1.23% above that. Employers also pay health insurance (sickness insurance) of about 1.53%, statutory accident insurance (average ~0.51%), and group life premium (average ~0.06%). The total employer burden is roughly 19–21% of gross wages.
Employment pension (TyEL): average 17.10% of gross wages (employer share)
Unemployment insurance: 0.31% up to €2,509,500 / 1.23% above
Health (sickness) insurance: ~1.53% of gross wages
Accident insurance: ~0.51% average
Group life premium: ~0.06%
Employee pension contribution (TyEL): flat 7.30% in 2026 (same for all ages)
Filing & Compliance
Corporate Tax Return Deadlines
The Finnish tax year follows the calendar year (1 January – 31 December), though companies can use a different accounting period. The corporate income tax return must be filed within 4 months of the accounting period end. For calendar-year companies, the deadline is 30 April. Using a registered tax advisor may grant an automatic extension to end of May. Companies file advance (prepayment) tax during the year. All filings go through the MyTax (OmaVero) portal, Finland's digital-first tax system.
Tax return deadline: 4 months after accounting period end (30 April for calendar-year companies)
Extension with tax advisor: typically until end of May
Advance tax prepayments: typically on 23rd of each month, including September and December
All filings via MyTax (OmaVero) online portal
Business registration: Finnish Trade Register + Tax Administration (Y-tunnus required)
Frequently Asked Questions
What is the corporate tax rate in Finland for 2026?
The corporate income tax (CIT) rate is a flat 20% for all companies, including limited liability companies (Oy), cooperatives, and permanent establishments of foreign entities. This rate has been in place since 2014. The Finnish government has announced a reduction to 18% effective from January 2027.
How are dividends taxed in Finland?
Dividends received by Finnish companies from other Finnish companies are generally tax-exempt. Dividends paid to non-resident companies are subject to 20% withholding tax; to non-resident individuals, 30%. EU parent companies holding at least 10% of the Finnish company's capital pay 0% WHT. Most tax treaties reduce the standard rates to 5–15%.
What are VAT rates in Finland for 2026?
The standard VAT rate is 25.5%. The reduced rate of 13.5% applies to food, restaurant services, books, accommodation, passenger transport, and medicines (reduced from 14% on 1 January 2026). The 10% rate applies to newspapers and magazines. VAT registration is mandatory once annual turnover exceeds €20,000.
Can losses be carried forward in Finland?
Yes. From 2026, losses can be carried forward for 25 years (extended from 10 years). This applies to losses confirmed for tax year 2026 and later. Losses are forfeited if more than 50% of the company's shares change ownership during the tax year in which the loss arises.
What R&D tax benefits are available in Finland in 2026?
Two schemes run in parallel. The general combined R&D deduction (permanent from 2023): 50% additional deduction on eligible R&D costs + 45% extra for year-on-year growth in R&D spending. The cooperation-based deduction (2022–2027): 150% deduction on R&D subcontracting costs paid to recognised research organisations. Both schemes have a minimum of €5,000 and maximum of €500,000 per year.
What employer social contributions does a Finnish company pay?
Employers pay average 17.10% in employment pension insurance (TyEL), graded unemployment insurance (0.31% up to €2,509,500, then 1.23%), health insurance (~1.53%), accident insurance (~0.51%), and group life premium (~0.06%). Total employer burden is approximately 19–21% of gross wages.
When must a corporate tax return be filed in Finland?
The tax return is due 4 months after the end of the accounting period. For companies using the calendar year, this means 30 April. Using a professional tax advisor can extend the deadline to the end of May. Advance tax prepayments are made monthly via the MyTax (OmaVero) portal.
What is the tax rate for foreign key employees in Finland from 2026?
The flat withholding tax rate for qualifying foreign key employees (specialists) dropped from 32% to 25% on 1 January 2026. To qualify, the employee must move to Finland from abroad and receive a monthly salary of at least €5,800. The flat rate applies for up to 7 years.
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