Parliament approves substantial increases in tax on mined minerals

The tax burden of the mining sector will increase by tens of millions of euros

The value royalty for metal ores will increase from the current 0.6% to 2.5% of the taxable value of the metal contained in the mined mineral. Similarly, the volume royalty for industrial minerals will increase from EUR 0.20 to EUR 0.60 per tonne of mined ore or industrial mineral. At the same time, mining companies will also see an increase in their energy costs – at the beginning of 2026, the excise duty on electricity paid by mining operators will increase from 0.05 cents/kWh to 2.24 cents/kWh, as decided earlier this autumn.

According to estimates based on the increase in tax revenue, the increase in mined minerals tax would generate an additional EUR 70 million for the state in the tax payment year 2027, whereas the expected additional EUR 11 million from the increase in the excise duty on electricity would already be collected during 2026. As mining companies operate in international markets, they cannot transfer the entire tax burden to their product prices, which means that the additional costs will mainly directly weaken the companies’ profitability and investment opportunities. In addition to the above taxes, mining companies also pay corporate income tax, which is generally levied on companies, as well as real estate tax on their real estate holdings.

The structural model of the tax remains unchanged – but work will start on a new hybrid model

This latest amendment still leaves the key structural problem of the tax unresolved: the tax is determined based on the volume of production, not profit. This means that the tax is levied even when the operation of the mine is not profitable.

The mining industry has proposed a hybrid model where the tax would be based partly on the royalty model and partly on profit. In connection with the adoption of the amendments to the Act on Mined Minerals Tax, Parliament required that the Government start preparing a hybrid model that could be implemented as early as the beginning of 2027.

Other key amendments as of 1 January 2026

As a result of the amendment, the following changes will take effect at the beginning of January 2026:

• As a general rule, no tax will be paid on mining by-products (this is taken into account in the increase in the value royalty for metal ores).
• The tax on industrial minerals will be determined by the time when the mining or extraction of the ore or industrial mineral takes place.
• The price information on which the taxable values are based is provided for in the Annex to the Act.
• Taxation is extended to cover iron and rhodium.
• The state’s share of the mined minerals tax will be 70%, and the share of the municipality where the mine is located will be 30%.

The structural model needs a quick but carefully prepared update

The Act on Mined Minerals Tax is relatively new, as it only entered into force at the beginning of January 2024. It has received widespread criticism from the very beginning. However, the tax turned out to be more profitable for the state than anticipated, and in the Programme of Prime Minister Petteri Orpo’s Government, the Government proposed a further increase to the tax to balance public finances.

Large tax increases are challenging for an industry that is capital-intensive and requires long-term investment. The location-specific nature of the operations also makes the sector particularly vulnerable to changes in the tax system. It is therefore positive that Parliament is calling for rapid action to introduce a new structural model.

Fast-tracking the structural model update is important so that Finland can adopt a tax model that safeguards both the sustainability requirements of the state economy and the competitiveness and investment possibilities of the mining industry.

Our experts in taxation and other regulatory matters concerning the mining industry are happy to assist you with any questions you may have about this amendment or any other issues relating to the sector.