The Finnish finance ministry has recently published the country’s 2013 budget review, detailing the government’s tax plans for next year.
The government plans to implement tough tax measures to strengthen the public finances. The most significant tax policy measures adopted in the budget proposal are to abolish adjustments for inflation for earnings levels in earned income taxation and to raise all value-added tax (VAT) rates by 1%.
Solidarity taxes will be introduced as a means to improve the fairness of taxation. A temporary bracket will be introduced into the income tax scales, namely a 31.75% rate on annual taxable income in excess of EUR100,000 (USD130,000). Moreover, taxes on large inheritances and large pension income will be made tougher while taxes on low income will be eased by raising the earned income deduction and the basic deduction in local taxation.
A new public broadcasting tax will also be adopted next year to replace the system of television licenses, and the revenue will be channelled through the National Television and Radio Fund to the Finnish Broadcasting Company.
In addition, a bank levy will be introduced.
Within the framework of the budget proposals, the overcompensation of tax-exempt mileage allowances will gradually be phased out. A tax deduction for training costs will be included in corporate taxation, and the right to deduct interest expenses on loans will be restricted.
The budget proposal aims to boost economic growth by creating opportunities for new business activities and investment and by catering to the skills and labour needs of existing businesses.
Consequently, various temporary tax incentives for businesses will be introduced. A tax incentive for research and development will be created to support growth-orientated product development and to increase investment, and the depreciation allowances for industrial production investments will be doubled. Investors will also receive a deduction on the investments they make in growth companies.
The government plans to implement tough tax measures to strengthen the public finances. The most significant tax policy measures adopted in the budget proposal are to abolish adjustments for inflation for earnings levels in earned income taxation and to raise all value-added tax (VAT) rates by 1%.
Solidarity taxes will be introduced as a means to improve the fairness of taxation. A temporary bracket will be introduced into the income tax scales, namely a 31.75% rate on annual taxable income in excess of EUR100,000 (USD130,000). Moreover, taxes on large inheritances and large pension income will be made tougher while taxes on low income will be eased by raising the earned income deduction and the basic deduction in local taxation.
A new public broadcasting tax will also be adopted next year to replace the system of television licenses, and the revenue will be channelled through the National Television and Radio Fund to the Finnish Broadcasting Company.
In addition, a bank levy will be introduced.
Within the framework of the budget proposals, the overcompensation of tax-exempt mileage allowances will gradually be phased out. A tax deduction for training costs will be included in corporate taxation, and the right to deduct interest expenses on loans will be restricted.
The budget proposal aims to boost economic growth by creating opportunities for new business activities and investment and by catering to the skills and labour needs of existing businesses.
Consequently, various temporary tax incentives for businesses will be introduced. A tax incentive for research and development will be created to support growth-orientated product development and to increase investment, and the depreciation allowances for industrial production investments will be doubled. Investors will also receive a deduction on the investments they make in growth companies.
