Finland proposes cutting corporate tax to 18%, 25-year loss relief

The Finnish government has submitted bill HE 151/2026 to Parliament proposing to lower the corporate income tax rate from 20% to 18% and to extend the carry-forward period for business losses from 10 years to 25 yearsFinlex. Verohallinto, the Finnish Tax Administration, reports the proposals on its page on upcoming tax changes. The proposal is linked to the 2027 budget proposal and is intended to be considered alongside it.

The bill would amend sections 119 and 124 of the Tuloverolaki and the act on the taxation of non-residentsFinlex. Under the proposal, the corporate income tax rate in section 124 would be 18 instead of 20FinlexFinlex. For non-resident corporations, the withholding tax on dividends, interest and royalties under section 7 would fall to 18%Finlex, and the corporate tax on other Finnish-source income under section 15 would be 18%Finlex. The rate on dividends on investment assets would be adjusted from 15% to 13.5%FinlexFinlex so that it matches the tax on the corresponding domestic dividend.

Crucially, the bill sets the timetable the Vero page omits: the acts are intended to enter into force on 1 January 2027Finlex. The new 18% rate would first apply in taxation for tax year 2027Vero, and in advance collection from entry into forceFinlex. The extended loss period would apply to losses of tax year 2026 and later yearsFinlex; losses of 2025 and earlier keep the 10-year periodFinlex.

The extension is also narrower than a general 25-year rule: under the proposed section 119, the 25-year period would cover partnerships and corporations and other taxpayers other than natural personsFinlex, while a natural person's business loss would keep the 10-year periodFinlex and agricultural losses would keep the 10-year periodFinlex. The current baseline remains section 119 as in force — a business or agricultural loss is deducted over the following 10 tax years as income arisesFinlex — and Verohallinto's guidance confirms the mechanics: confirmed losses are deducted automatically from profitable results, within the source of income in which they arose.

The same guidance sets an existing limit that operates alongside any carry-forward window: a corporation loses the right to deduct earlier losses if more than half of its shares have changed owner, directly or indirectly, during or after the loss year otherwise than by inheritance or will — unless it obtains an exemption permitFinlex, and listed companies are outside the ruleVero.

Verohallinto notes the administrative burden would be small: corporate tax is computed from the return, so the rate cut requires no separate action, and confirmed business losses are deducted automatically, so the longer window adds no return-filling work. Companies carrying losses and their advisers should track the bill, since only losses of 2026 and later would gain the 25-year window if enacted as proposedFinlex.

Legal basis: HE 151/2026 amending Tuloverolaki (1535/1992) sections 119 and 124 and the act on the taxation of non-residents; Verohallinto reporting; Laki elinkeinotulon verottamisesta (360/1968) for the computation of business losses.