Legal Alert - The Fiscal Policy Of The New Finnish Government Published

On 17 June 2011 the new Finnish government reached agreement on the new Government Programme. The Programme includes the definition of Government's fiscal policy for the commenced term of four years. The fiscal policy pursues to secure the financing of welfare services and to balance the national economy while strengthening the economic growth and employment.

In order to promote the competitiveness of Finnish enterprises the corporate income tax will be reduced from 26% to 25%. The Government is committed to follow the development of corporate tax rates in other European countries and is prepared to further reductions if needed. In addition the Government will pursue an extensive reform of corporate tax system especially as regards the group taxation, interest deductions, balancing of losses and use of deductions. The introduction of R&D-deduction will also be examined.

In pursuance of the corporate tax reform the taxation of dividends and taxation of capital income taxation is expected to tighten. The Government will propose a reduction to the amount of tax-exempt dividends received by individuals from non-listed companies. Currently an individual may receive tax-exempt dividends from non-listed companies up to EUR 90.000 per year but the amount is to be reduced to EUR 60.000. Dividends from listed companies received by individuals will be affected by the increase of capital income tax rate as 70% of such dividends are subject to capital income taxation...