Finland Proposes New Tax Credit For Green Transition Investments

New tax credit to provide up to 20% cost savings for qualified green investments

The Finnish Government has introduced its new proposal (HE 207/2024) aimed at fostering large-scale industrial investments that support the transition to a climate-neutral economy. This initiative, which is part of the Government’s broader economic growth package, seeks to attract significant investments by offering an investment credit targeted at large green industrial projects. The proposed 20-year time limit for using the investment credit would be calculated from the first tax year beginning in 2028. 

SNAPSHOT

• Tax credit for large green transition investments in Finland.

• The investment credit is designed to reduce the financial burden on companies undertaking large-scale, climate-friendly projects.

• The investment credit will target large industrial investments with a minimum threshold set at EUR 50 million (calculated separately for each investment). 

• The official decision to grant the investment credit must be made by the end of 2025.

EVALUATION CRITERIA

• Eligible projects for the investment credit include:

  • The minimum investment threshold must be at least EUR 50 million.

  • Production of renewable energy (such as renewable hydrogen and renewable hydrogen fuels); storage of electricity and heat; storage of renewable hydrogen, biofuels, bioliquids, biogases, biomethane and biomass fuels;

  • Decarbonization of industrial production processes and energy efficiency measures; and

  • Investments in the production of equipment, key components and related critical raw materials essential to the transition to a climate-neutral economy.

  • The investment credit should be applied before the commencement of work related to the investment, meaning that only new investment projects would be eligible for the credit.

POTENTIAL VALUE

• The tax credit would be deductible from the payable amount of corporate income taxes and could cover 20% of the amounted investment costs.

• The maximum amount of the credit is EUR 150 million per group company. However, no more than 10% of the total credit could be deducted per year.

CONNECT WITH THE HICKEY’S INCENTIVES TEAM

Contact the Hickey Incentives Team to learn more about the program, including eligibility criteria, application details, and funding requirements. If you’d like our support throughout the application process, we are here to help!