The Finnish Parliament approved the proposed tax credit for green industrial investments
Insights|March 27, 2025
On 19 March 2025, the Finnish Parliament approved the Government Proposal regarding the fixed-term tax credit for green industrial investments (known as an “Investment Credit”). No significant changes were made to the proposal during the processing phase. Business Finland opened the application for Investment Credits on 24 March 2025.
Investment Credits can be applied for in the case of investment projects whose eligible costs amount to at least EUR 50m. The Investment Credit constitutes 20% of the eligible costs, and is deducted by way of a maximum of 10% instalments from the company’s income taxes for the tax years 2028–2047 (but not earlier than the tax year during which the investment is completed). The investment projects eligible for Investment Credits are divided into three categories, corresponding to sections 2.5.1, 2.6 and 2.8 of the Commission’s Temporary Crisis and Transformation Framework for State Aid measures to support the economy following the aggression against Ukraine by Russia (2023/C 101/03), subject to certain national restrictions. The investment categories eligible for Investment Credits include investments in energy production from renewable sources and energy storage, investments in low-carbon industrial production processes and energy efficiency measures, and investments in certain sectors that are strategic for the transition to a climate-neutral economy. For more information on the content of Investment Credits, please see our previous article: Finnish government proposes fixed-term tax – credit for green industrial investments.
Applying for Investment Credits
Investment Credits are applied for from Business Finland, which decides on whether the investment project is eligible for the Investment Credit. Business Finland also monitors that the terms of the Investment Credit are followed. Applications for Investment Credits should be made through the Business Finland online service.
The application should include a description of the investment as well as its cost estimate and financing plan, the amount of the Investment Credit applied for, and a necessary clarification on the fulfilment of the criteria for the Investment Credit laid down in the law. The use of Business Finland’s online service requires suomi.fi authorization for the person filling the online application on behalf of the applicant entity.
Deadline for filing applications
Applications must be filed by 29 August 2025 and Business Finland must decide whether to grant Investment Credits by the end of 2025. However, applications must in any case be submitted to Business Finland before work starts on the investment project. This means that no construction work may be started and no irrevocable contracts for the purchase of equipment may be concluded before the application for the Investment Credit has been filed. Despite this requirement, the company may purchase land and start preparations for the project, such as applying for permits and licenses, as well as performing preparatory feasibility studies before filing the application.
Our experts are happy to discuss the application procedure as well as further details of the incentive and its use. We are monitoring the discussion on the future of the Commission’s Temporary Crisis and Transformation framework and will keep you updated on any future developments.