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Finnish Budget For 2020 Agreed

by Ulrika Lomas,, Brussels

27 September 2019

On September 17, 2019, the Finnish Ministry of Finance announced that the Government has reached an agreement on the contents of the 2020 Budget, which includes some tax reductions for both companies and individuals.

In the area of corporate tax, the Budget includes a provision which doubles the rate of depreciation for machinery and equipment for a four-year period, which the Government intends to introduce in 2020.

The Budget also provides for an additional 50 percent deduction for expenditure on research and development carried out by businesses in conjunction with universities and research institutions. This temporary incentive would also be in place for four years.

In addition, in order to promote labor mobility, the Government intends to submit a bill to parliament that would exempt half of the employer's relocation costs from tax.

For individual taxpayers, the Budget will reduce the tax burden on low- and middle-income taxpayers, pensioners, and those in receipt of benefits by EUR200m (USD221m) in 2020. However, under a further provision, the mortgage interest deduction will be gradually phased out from 2020.

Furthermore, the solidarity tax will stay in place for the remainder of the Government's six-year term, which began this year.

As agreed in the Government Program, fuel taxes will rise by EUR250m, in line with inflation.

The Government also intends to gradually increase taxes on tobacco during its mandate, with a EUR50m increase to be introduced next year. In addition, the tax on soft drinks will rise by EUR25m in 2020, with most of the increase applying to drinks with a high sugar content.

TAGS: individuals | Finance | tax | business | interest | employees | budget | Finland | inflation | research and development

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