Finland has established itself as an attractive destination for foreign investment, holding a prominent position (No. 20) in the World Bank’s Doing Business ranking, even surpassing economies such as Germany, Canada, and Switzerland. This favorable environment is underpinned by the ease it offers to businesses and a competitive tax system. 

If you are considering expanding your multinational corporation or fund to this Nordic nation, understanding the key aspects of its tax system is a fundamental step. 

A look at the finnish tax system 

VAT Rates: What’s new for 2025 

As of January 2025, Finland has implemented significant adjustments to its VAT rates, following the approval of Law HE 141/2024 by the Finnish Parliament in December 2024. 

• The reduced VAT rate, previously at 10%, has increased to 14%. This modification affects goods and services such as books, medicines, sports services, cultural event tickets, passenger transportation, and accommodation. However, newspapers, magazines, and public broadcasting will maintain the 10% rate. 

• It is crucial to consider the date of delivery of the goods or the rendering of the service to determine the applicable tax rate. Transactions carried out before December 31, 2024, are taxed at 10%, even if payment is made in 2025. On the other hand, deliveries or services on or after January 1, 2025, are subject to the new 14% rate. Advance payments received before January 1, 2025, were taxed at the rate in effect at the time of payment. 

• Additionally, since September 2024, the general VAT rate has been increased from 24% to 25.5%, impacting a wide range of goods and services, including products like sweets and chocolates (Law HE 61/2024). 

Corporate Income Tax: an attractive 20% 

The general corporate income tax (CIT) rate in Finland remains at a competitive 20%. This percentage applies to corporate profits, regardless of the size or sector of activity. This rate positions Finland as a fiscally attractive jurisdiction compared to other European and Nordic region countries. 

Why consider Finland for your investment strategy? 

Beyond its favorable tax system, Finland offers a robust and modern business environment: 

• Simple and digital establishment process: registering a company can be done entirely digitally in less than a week, without the need for a local or resident partner. 

• Competitive tax system with incentives: in addition to the attractive corporate income tax, there are tax exemptions and benefits for startups and innovative companies, as well as an extensive network of double taxation treaties. 

• Strategic incentives: emerging technology sectors can benefit from tax exemptions or deductions in their early years. 

• Strategic geographic location: as a bridge between western and eastern europe, finland facilitates access to the scandinavian and northern european markets, boosting international trade. 

• Highly skilled workforce: its top-tier education system ensures the availability of trained professionals in various key areas. 

• Government support for new businesses: the finnish government implements pro-business policies, including advisory and support programs for entrepreneurs. 

• Flexibility in business structures: A wide range of legal forms allows investors to choose the structure that best suits their needs. 

• Expansion and consolidation opportunities: the growing trend of mergers and acquisitions can generate tax efficiencies and increase competitiveness. 

• Ease of residency for owners: business owners can obtain residence permits, facilitating their integration into the country. 

• Cutting-edge technological infrastructure: high-speed internet access, efficient online procedures, and a solid level of cybersecurity optimize business management. 

• Low corruption rate: finland ranks as one of the least corrupt countries globally, offering a reliable and secure business environment. 

If you are considering expanding the operations of your multinational corporation or fund to this stable and transparent economic environment, at Auxadi, we are ready to be your strategic partner in managing your tax obligations in Finland. 

Since 1979, at Auxadi, we have been making life easier for our clients, offering comprehensive accounting, tax, payroll, and legal services internationally. With a presence in over 50 countries and 22 subsidiaries, our experience and advanced technology platform become a natural extension of your finance department. Our culture, based on ethics and excellence, drives us to exceed our clients’ expectations. 

Ready to explore the tax opportunities in Finland? 

Fill out our contact form and let’s discuss how we can facilitate your international expansion.