Member Article

The Finnish government proposes significant changes to transfer taxation. Transfer tax is levied on the acquisition of shares and other securities and real property. The proposed changes may have significant effects to the taxation of M&A and real estate transactions. Some of the proposed changes will decrease the tax burden while some will result in increased tax liability. The most significant changes include:

• The general rate for securities (1.6%) and the special rate for shares in real estate companies (2%), will be combined to a unified rate and reduced to 1.5%. The rate for real property (4%) will be reduced to 3%.
• The tax base will be expanded to cover loan receivables purchased in connection with shares or other securities when the proceeds from such transfer of loan receivables are paid to or will otherwise benefit the seller.
• In connection with certain qualifying tax exempted business transfers, the exemption from transfer tax will no longer require that the recipient company is a newly established company. Thus, reorganizations involving such transfers could be implemented tax neutrally between operating companies.

The majority of the changes are expected to come into force as of the beginning of the year 2024. However, the new lower rates are proposed to be applied to share transfers taking place as of 12 October 2023, and the new rules regarding business transfers from 9 October 2023.

For more information about the proposed changes, please contact our tax experts Samu Lassila and Antti Lehtimaja.