The Ministry of Finance, led by Terhi Järvikare, is gearing up to investigate the use of holding companies for tax avoidance, as reported by Helsingin Sanomat. This comes after Anita Isomaa from the Confederation of Finnish Industries called for a ban on this practice.
The loophole allows unlisted companies in Finland to pay out dividends at a significantly lower tax rate, resulting in a tax expenditure of 830 million euros predominantly benefiting the wealthiest individuals. Social media influencers and business owners have taken advantage of this arrangement, prompting calls for lawmakers to take action.
The Finnish responsibility watchdog, Finnwatch, has welcomed the news of the Ministry of Finance’s investigation but emphasized the importance of a concrete political decision to address the issue. Despite Minister of Finance Riikka Purra‘s silence on the matter, Järvikare clarified that resource constraints have delayed addressing the problem.
With mounting pressure from various groups, the scrutiny of holding companies as a tax avoidance tool signals a potential shift towards fairer tax practices in Finland.