New fixed-term tax incentive for green industrial investments published by the Finnish Government

Insights|April 22, 2024

The Finnish Government published Tuesday 16 April 2024 its General Government Fiscal Plan for 2025-2028. According to the plan, there will be a new fixed-term tax incentive for green industrial investments. The incentive is intended to support investments in green industry projects, such as battery, hydrogen and fossil-free steel industry investments.

The exact details of the incentive are still unknown, but tentatively the following has been informed to the public:

  • the amount of the incentive will be 20 % of the total value of the investment, however, no more than EUR 150 million per project,
  • the incentive is to be granted to new investments which are decided upon by 31 December 2025,
  • technically the incentive would be granted by deducting part of the investment costs from the payable company income tax in the future, meaning that the incentive is only intended to profitable investment projects,
  • after the project is ready, the tax incentive can be obtained earliest starting from year 2028,
  • there will be further investigations to determine how the maximum amount per project will be calculated and what will be the timeframe, in which the incentive is usable.

We are closely monitoring the process. We are of course happy to discuss what possible effects the proposed incentive could have on your contemplated investments and tax position in Finland.