Changes to personal taxation 2026

As the year 2025 draws to a close, the upcoming year 2026 will bring with it a number of changes that may affect, among other things, the taxation of employees and entrepreneurs.

Below is a concise summary of a few noteworthy highlights of the 2026 reforms:

• The standard home office deduction from earned income will be abolished. However, if the conditions for the deduction were met during 2025, the home office deduction may still be claimed on the 2025 tax return, which is filed in spring 2026. If, for example, you have acquired a separate workspace located outside your home or holiday residence and used exclusively for work purposes, the related costs may continue to be deductible from tax year 2026 onwards, provided the conditions for deductibility are met.
  
  
• Membership fees paid to labour market organisations will no longer be tax-deductible as of tax year 2026. However, the deductibility of unemployment fund membership fees will continue.
  
  
• The tax exemption for the bicycle benefit will be abolished. If the bicycle benefit was agreed upon before 24 April 2025, the tax exemption will remain in force until the end of the contract period, but for no more than five years from the introduction of the benefit.
• In particular, owners of electric vehicles or holders of company cars with an electric powertrain may also be interested in the new policy under which the charging benefit for electric vehicles will no longer be tax-exempt.
  
  
• The widely discussed reform concerning share exchanges has now taken its final form. As of the beginning of 2026, in related-party share exchanges (so-called close-related-party share exchanges), the shares of the target company will be valued in the acquiring company’s net asset calculation at their mathematical value prior to the share exchange, rather than at fair market value. The change may significantly reduce the maximum amount of dividends taxable as capital income, but its actual impact depends on whether the shares of the exchanged company were valued higher than their mathematical value at the time of the share exchange. The change will apply to dividends available for distribution as of 1 January 2026, provided that the share exchange was carried out after 1 January 2017. In addition, for share exchanges carried out on or after 1 January 2026, the acquisition cost of the shares will be determined based on the mathematical value prior to the share exchange.
  
  
• The withholding tax for key employees coming to work in Finland will be reduced from 32% to 25%. The change applies to salaries paid on or after 1 January 2026. The scope of application of the law will also be expanded, subject to certain conditions, to Finnish citizens returning to Finland. In this context, the reform applies to employment commencing on or after 1 January 2026.
  
  
• Legal advice paid for by an employer for an employee will, subject to certain conditions, be tax-exempt going forward, provided that the matter relates to the employee’s work duties.
  
  
• The relatively complex rules concerning contingent consideration (earn-out) applied in business acquisitions have now been simplified. Going forward, capital gains tax on contingent consideration will be assessed in the tax year in which the amount of the additional purchase price is confirmed. The reform also affects the timing of transfer tax payments in such situations.
  
  
• As of the beginning of next year, the taxable threshold for gifts will increase from EUR 5,000 to EUR 7,500. As a result of the reform, a gift of less than EUR 7,500 given once every three years from one private individual to another will be tax-exempt. In addition, inheritance tax will no longer be payable as of 2026 if the value of the inheritance is less than EUR 30,000, whereas previously the threshold was EUR 20,000. Furthermore, the value of ordinary household effects exempt from inheritance and gift tax will be increased from EUR 4,000 to EUR 7,500.

Aallon Group’s legal team and other experts are at your disposal if you need assistance in understanding the reforms or assessing how the changes affect your personal taxation. We also provide comprehensive support in other matters related to personal taxation and assist private individuals, with extensive experience, in the preparation of tax returns.