The financial sector is one of
Finland’s major taxpayers
- The Finnish financial sector’s tax handprint totalled 5.6 billion euros in 2023. This is equal to the three-year budget of the country’s child benefits.
- The tax handprint for the sector is calculated from its corporate income tax (€1.3 billion), insurance premium tax (€922 million) and contributions towards fire protection, road safety and industrial safety (€24 million). The sector also generates employee income tax (€1,170 million), social security contributions (€701 million) and dividend withholding tax (€982 million), and pays hidden VAT costs of €485 million.
- The financial sector’s €1.3 billion constitutes 18.1% of all corporate income tax paid in Finland.
- The top 20 largest payers of corporate tax included seven financial sector companies. The single biggest corporate tax payer in 2023 was OP Financial Group, with Nordea placing second in the listing.
The financial sector was once again one of the biggest taxpayers in Finland according to the 2023 tax data released by the Tax Administration. The top 20 largest payers of corporate tax included seven financial sector companies. The single biggest corporate tax payer in 2023 was OP Financial Group, with Nordea placing second in the listing. In total, Financial sector companies paid €1.3 billion in corporate income tax.
“The figure proves that banks and insurers are among the most significant taxpayers and financiers of the Finnish welfare society. The corporate taxes paid by financial sector companies amounted to 18.1% of all corporate tax in Finland”, says Finance Finland’s CEO Arno Ahosniemi.
Hidden VAT costs estimated to reach €485 million
In accordance with the EU VAT directive, financing and insurance services are exempt from value added tax. This exemption is based on difficulties in defining the tax base, problems with technical implementation and reasons of international competition.
Finance Finland has estimated that the sector’s hidden VAT burden amounts to €485 million per year.
“Unlike most companies, financial sector companies cannot deduct the VAT for the goods and services they purchase. The sector thus bears a hidden VAT burden compared to companies that sell services subject to VAT”, explains Ahosniemi.
Nearly €400 million in sector-specific additional payments
In addition to the national taxes and contributions, credit institutions pay stability contributions to the EU Single Resolution Fund. In 2023, the Finnish Financial Stability Authority collected a total of €252 million in stability contributions from Finnish credit institutions. Credit institutions and banks also paid a total of €151 million in deposit guarantee contributions to the Financial Stability Authority.
The total amount of stability contributions collected from Finnish banks reaches €1.66 billion. After the contributions for 2023 were collected, the Deposit Guarantee Fund amounted to approximately €1.07 billion.
Sources used in the calculation of the sector’s tax handprint: Finnish Tax Administration, Statistics Finland, companies’ financial statements, Finance Finland.