Finland is preparing a tax reform to improve flow-through taxation of investments into Finnish regulated funds, expected to be applied as of tax year 2027.
Current circumstances
As background for the contemplated tax reform, a Finnish limited partnership (in Finnish “kommandiittiyhtiö”) is not a separate tax subject but the taxable profit is determined at the level of the Finnish limited partnership and thereafter taxed in the hands of limited partners. Therefore, a Finnish limited partnership is not a fully tax transparent entity, but rather a calculation unit. This has resulted in adverse tax position of foreign investors and non-profit organizations, which has already prior to the contemplated reform been mitigated with a specific tax provision1. However, due to the inefficiencies of the current specific tax provision, the contemplated tax reform is being prepared during year 20262.
