Finland has the lowest corporate tax rate among the Nordic countries and one of the lowest in the EU. In addition to moderate taxation rates, Finland now offers new tax deductions for companies operating in Finland.
The Finnish Tax Administration has a unique, company friendly and predictable approach. The Tax Administration strongly focuses on modern, pre-emptive approach instead of retrospective traditional tax audits. The Tax Administration has also a dedicated team helping foreign companies in tax matters – free of charge.
The corporate tax rate for company profits in Finland is 20% – the lowest among the Nordic countries. And did you know that Finland has one of the lowest industrial electricity prices in the EU? From the beginning of 2021, the industrial electricity tax in Finland was lowered to the EU minimum level to c/kWh 0,063.
The law on accelerated depreciation on machinery and equipment for tax years 2020-2023 entered into force on 1 January 2020.
Under the new legislation, a business may annually deduct up to 50% instead of 25% of the tax carrying value of newly acquired machinery or equipment in tax years 2020-2023.
The new super-deduction is available for all companies operating in Finland, both domestic and international.
Ownership engages employees. Employee share issue means a directed share issue in which the company offers its own shares to its personnel. Usually, shares are not given free of charge, but typically at a price below the market price to provide a greater incentive to subscribe for the shares. The aim of the employee share issue is to engage employees in increasing the value of the company's share. A long awaited improvement came into force 1 January 2021.
When non-listed limited liability companies issue shares to employees in Finland, the subscription price may be lower than the shares' market value. However, if the subscription price is at least equal to the share's mathematical value, an individual employee who buys such shares will not be treated as having received a taxable benefit.