Key tax changes for 2026
Significant changes to taxation will come into effect from the beginning of 2026, affecting both companies and individuals. We have compiled the following summary of the key changes.
Corporate Taxation
The corporate tax rate will decrease from 20 per cent to 18 per cent from the beginning of tax year 2027. This will affect financial years beginning in 2026 that end in 2027.
In addition, the right to deduct confirmed tax losses will be extended from 10 years to 25 years. The change will come into force for losses confirmed from tax year 2026 onwards. The change gives companies significantly more time than before to utilise confirmed tax losses.
In share exchanges between related parties, shares being exchanged will henceforth be valued at their pre-exchange acquisition cost when calculating the acquiring company's net asset value. The purpose of the change is to prevent the inappropriate exploitation of dividend taxation through share exchanges, as acquired shares can no longer be valued at fair value going forward. The provision will apply to dividend-distributing companies that have carried out a share exchange after 1 January 2017. In addition, the share exchange rules will be extended to cover countries outside the European Economic Area when certain additional conditions are met. Similarly, the maximum amount of cash consideration that can be used in a share exchange will be increased from 10 per cent to 50 per cent. Link to our publication discussing the topic in more detail: Significant changes proposed to share exchange regulation – could these affect arrangements already implemented? - Merilampi.
Personal Taxation
Several tax reliefs in individual taxation will come into force in 2026. The highest marginal tax rates for employees will decrease from 59 per cent to 52 per cent. On the other hand, deductions for trade union membership fees and home office deductions from employment income will be abolished.
The withholding tax for so-called key personnel coming to Finland will decrease from 32 per cent to 25 per cent. In addition, the scope of the law will be extended to cover Finnish citizens returning to Finland.
Inheritance and Gift Tax
The lower limit for taxable inheritance will increase from EUR 20,000 to EUR 30,000 and the lower limit for taxable gifts from EUR 5,000 to EUR 7,500 from 1 January 2026. In addition, the value of ordinary household goods exempt from inheritance and gift tax will be increased from EUR 4,000 to EUR 7,500. The changes will reduce taxation particularly in smaller inheritance and gift situations.
In the future, the inheritance tax relief (so-called tax relief for generational transfer) may also be granted to a underage heir, even if they cannot continue business operations due to their age, for example by serving on the company's board of directors or as managing director. According to the Government’s proposal, it is sufficient that the underage heir's guardian continues business operations in the company. However, the relief will not be extended to gifts made to underage children.
Value Added Tax
The reduced VAT rate of 14 per cent, which applies to foodstuffs, restaurant meals, books, medicines, public transport, accommodation services and sports admission fees, amongst other things, will decrease by 0.5 percentage points to 13.5 per cent from 1 January 2026.
Property Tax
A reform will be implemented in property taxation to correct the divergence between the tax values and fair values of properties. However, the timetable and implementation are not yet clear. The reform may bring significant changes for property owners, so the situation should be monitored carefully.
Please note! Some of the legislative changes may still be refined during parliamentary processing. We recommend monitoring the situation and contacting our experts if the changes affect your situation.
