Finland Investment Income Tax Guide 2026 (Osinkovero)

Dividend Taxation (Osinkovero) — Listed Companies

For dividends from publicly listed companies, 85% of the dividend amount is treated as taxable capital income. The remaining 15% is tax-free. This means the effective tax rate on listed company dividends is 25.5% (85% × 30%) for dividends in the lower bracket, or 28.9% (85% × 34%) for dividends in the higher bracket. In practice, the dividend withholding tax withheld at source is 25.5% (the standard rate), which covers the tax liability for most investors in the lower bracket. If your total capital income exceeds €30,000, you may owe additional tax. The Tax Administration automatically considers your total capital income when assessing your final tax.

Dividend Taxation — Non-Listed Companies

Dividends from non-listed (private) companies have a more complex taxation. The first 8% of the company's mathematical value (matemaattinen arvo) per year per shareholder is treated partially as capital income: 25% of this portion is tax-free and 75% is taxable capital income. Any dividends exceeding 8% of the mathematical value but up to €150,000 per year are treated as earned income (ansiotulot) and taxed at progressive income tax rates. Above €150,000, 85% is treated as earned income. This system encourages reinvestment in private companies and provides a significant tax advantage for owners of small and medium-sized enterprises.

Interest Income

Interest from bank deposits, bonds, corporate loans, and other debt instruments is fully taxable as capital income at 30%/34%. There is no tax-free allowance for interest income (unlike some other countries' personal savings allowances). Interest paid by Finnish banks is reported automatically to the Tax Administration. Interest income from foreign sources must be reported manually. For individuals, the first €20 of interest income is tax-free under a small-income exemption.

Rental Income

Rental income from real estate is taxed as capital income at 30%/34%. Expenses related to the rental property (including maintenance, property tax, management fees, insurance, and loan interest) are deductible. Depreciation on the building can also be deducted (typically 4% per year using the declining balance method). Losses from rental activities cannot be deducted from other capital income but can be carried forward and offset against future rental income. If you rent out your primary residence, the rental income is taxable, but imputed rent is not taxed.

Foreign Investment Income

Finnish residents are taxed on their worldwide investment income. Foreign dividends, interest, and capital gains are subject to Finnish tax at the standard capital income rates. Foreign withholding tax paid (e.g., 15% US withholding on US dividends under the tax treaty) can be credited against Finnish tax liability using the foreign tax credit system. The credit is limited to the Finnish tax attributable to the foreign income. Foreign tax credits must be claimed on the tax return. Investment income from EU/EEA countries often has reduced or no withholding tax, making it more tax-efficient for Finnish residents.

FAQs

How is dividend withholding tax handled?

Finnish listed companies withhold 25.5% tax on dividends at source. If your total capital income exceeds €30,000, you may owe additional tax through the annual assessment. Foreign residents may be subject to a 20% withholding tax on Finnish dividends, reduced under tax treaties.

Is there a tax-free allowance for investment income?

There is no general tax-free allowance for investment income. Small exemptions exist: capital gains under €1,000 per year are tax-free, and the first €20 of interest income is exempt.

Are index funds and ETFs taxed the same as shares?

Yes, gains from selling ETFs and index funds are taxed as capital gains at 30%/34%. Dividends paid by these funds are taxed according to the standard dividend rules (85% taxable for equity funds).