yle.fi/uutiset 9.1. 2015
This past autumn, business and industry leaders in Finland began pushing for the introduction of an "Estonian model" of corporate taxation. Yesterday, the Federation of Finnish Enterprises issued a call for the next cabinet to introduce such a change.
In Estonia, corporate entities do not pay tax on profits unless they are paid out as dividends. When paid out, they are taxed at a flat rate of 21%.
Federation of Finnish Enterprises CEO Jussi Järventaus told the economic and business daily Kauppalehti that he would introduce this practice to Finland, but with a rate closer to 30% to be paid on dividends.
Opponents of the suggestion say that Finland cannot afford to adopt this model. The recession in the economy has already taken a deep bite out of tax revenues.
Järventaus concedes that that this would be an issue during a transitional phase, but argues that in the longer term, companies would use profits for investment and employment that would regenerate the lost tax revenues.
Another model being examined is the practice in Sweden of allowing companies to delay payment of taxes on 20%-25% of profits by reserving funds for investment.
This past autumn, both the Confederation of Finnish Industries and Federation of Finnish Enterprises issued programmes aimed at boosting corporate viability. While the Federation of Finnish Enterprises favours the Estonian tax model, the Confederation of Finnish Industries focused on bringing down labour costs.
Estonian tax model