The tax credit is a response to the increased competition for industrial investments. Finland’s competitive position has weakened in the current geopolitical situation due to state aid schemes becoming more common in the EU. The fixed-term tax credit is intended for large industrial investments that support the transition to net-zero economy, such as battery and hydrogen projects, as well as investments in fossil free steel industry.
Investment projects and intentions to invest in Finland mainly relate to electricity production. The objective of the tax credit being prepared is to encourage large industrial investments utilising electricity and, at the same time, support constructing an industrial ecosystem of clean energy transition in Finland.
Preliminary, the tax credit could be 20% of the total amount of the investment, but not more than EUR 150 million per project. The company could deduct a part of its investment costs from the corporate tax to be paid by the company. The tax credit could be deducted from the payable corporate tax after the project has been completed as of 2028 at the earliest.
The tax incentive supports Finland in becoming a leader in the energy transition
The tax incentive is significant and likely to attract much desired investments to Finland from abroad as well. Finland is one of the leading countries in the energy transition, and we have many companies that are ready to commercialise their operations and start production on an industrial scale. However, the transition to larger markets requires considerable investments.
Finland has every chance of attracting international investments and to become a leader in new energy solutions: we are already close to being self-sufficient in electricity production, the security of electricity supply is at a high level, and the average price is moderate.
In addition, the permitting process for green transition projects has been streamlined and the Government aims for a one-stop shop permitting system. Now is a good time to encourage investors to make energy and industry investments in Finland and to streamline the start of new projects.
