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The SVOP fund in a Finnish Oy: investing, getting the money back and the tax

Karma Accounts · Published 28 October 2026

The SVOP fund (sijoitetun vapaan oman pääoman rahasto, the reserve for invested unrestricted equity) is where a Finnish limited company (Oy) books money its owners invest when it is not share capital. It is free equity, so the company can pay it back with the same procedure as a dividend. For tax, a distribution from the fund is a dividend as the main rule. From an unlisted company it is instead taxed as a disposal (luovutus) under the capital gains rules, which usually leaves no tax up to the amount invested, if it returns the recipient's own investment, at most ten years have passed since the investment, and the recipient can show both reliably.

What the SVOP fund is

Under the Limited Liability Companies Act (osakeyhtiölaki, OYL) the SVOP fund is free equity, like profits (8:1). It receives the part of a subscription price not booked to share capital, any other equity investment not booked to another reserve, and the amount of a share capital reduction not used for losses or payouts (8:2).

Since 1 July 2019 a private Oy needs no minimum share capital; only a public Oyj must have 80 000 euros (OYL 1:3). Many small companies have none, so the owner's money comes in through the SVOP fund (company registration costs). The fund is the company's equity, not an account in the owner's name.

Putting money in

Without new shares. You and the company agree that you pay money or other property into the fund and receive nothing for it. The board represents the company (OYL 6:25): agree in writing and record it in the board's minutes. For tax, the investment is made on the day of the binding agreement. A receivable you have from the company, such as a loan you gave it, can also be converted into an SVOP investment.

With new shares. The general meeting decides a share issue, or the board under its authorisation (OYL 9:2). The subscription price of new shares goes to share capital unless the issue decision books it wholly or partly to the SVOP fund (9:6). The decision must be notified for registration without undue delay and at the latest a month after it (9:7), and the new shares are registered once paid (9:14). The steps of an issue, from the decision to the PRH filing, are in our article on share issues; a loan that counts as equity in the negative-equity test is a capital loan.

Bookkeeping

The investment is not taxable income for the company (Business Income Tax Act, EVL 6 § 1 mom. 2 k.), and a return goes straight against the fund, not through the profit and loss account.

Book each investment in its own sub-account, or tag it with a dimension, on the day it is made. The Tax Administration accepts that a return comes from a particular investment only if it has been followed separately from the start; separating it later does not count. Otherwise a return is divided pro rata among everything in the fund, including profits transferred there.

Taking it out: the company-law steps

A distribution from the SVOP fund is a lawful way of paying out company money (OYL 13:1) and follows the dividend rules:

1. The last adopted financial statements are the basis, audited if the company must have an auditor, with later material changes taken into account (13:3).
2. Distributable funds are free equity less amounts the articles keep undistributed and capitalised development costs (13:5). Accumulated losses reduce free equity and so what the fund can pay out.
3. Solvency. Nothing may be distributed if the company is, or would become, insolvent and this is known or should be known (13:2). Cash in the bank is not enough; the company must stay able to pay its debts.
4. The decision is made by the general meeting, or by the board under the meeting's authorisation, which sets a maximum amount and is valid at most until the start of the next annual meeting. It states the amount and which funds are used (13:6), so name the fund and sub-account. A sole owner decides in writing (AGM minutes).

Returning one owner's investment to that owner alone needs every shareholder's consent (13:6). For tax, its return to the investor must have been agreed when it was made, or part can be taxed to the other owners as a gift (guidance below, section 6.1).

How the return is taxed

Under the Tax Administration's guidance (VH/7443/00.01.00/2024, 16.12.2024), a distribution from the fund is a dividend as the main rule (Income Tax Act, TVL 33 a and 33 b §), and from a listed company always. From an unlisted company it is a taxable disposal under TVL 45 a §, to the extent it returns the recipient's own capital investment, if:

You give no shares up. From the return you deduct the undeducted acquisition cost of your shares, at most the amount of the return (TVL 46 a §). The investment adds to that cost, so getting back what you put in usually gives a gain of zero. No loss can arise, and the presumed acquisition cost (20 or 40 %) is not available. A gain is capital income: 30 % on the year's total capital income up to 30 000 euros, 34 % above.

When it is a dividend (past ten years, paid to someone other than the investor, or the part that is not your investment) the dividend rules apply and your acquisition cost stays for a later sale. To a resident individual the company withholds 7.5 % up to 150 000 euros paid to the same recipient in the year and 28 % above. See paying dividends.

Non-resident shareholders. A dividend-treated return bears Finnish withholding tax unless a tax treaty or an exemption reduces it. A return taxed as a disposal is generally not income from Finland, unless over half of the company's assets were, directly or indirectly, Finnish real estate on the day or in the 365 days before (TVL 10 § 10 a).

Reporting

• No withholding on a return taxed as a disposal if the company and the shareholder establish together that the conditions are met, or the shareholder presents a tax card issued for it. If they were not met, the company can be charged the missing withholding.
• Annual information return on capital returns taxed as a disposal (vuosi-ilmoitus luovutuksena verotettavasta pääomanpalautuksesta), for recipients resident in Finland, in MyTax or Ilmoitin.fi by 31 January of the year after the money became available, or the next working day (1 February 2027 for 2026). One per separate investment without new shares, or per batch of shares acquired.
• Form 6B: a return taxed as a disposal has its own row; a dividend-treated one goes in the dividend total (Form 6B) and on the annual return on dividends as payment type 04.

A worked example

Anna owns all of Anna Consulting Oy, founded with no share capital. On 2 March 2026 she agrees with the company to invest 20 000 euros in the SVOP fund without new shares, booked to the sub-account "investment A. 2.3.2026". Her shares' acquisition cost becomes 20 000 euros.

• The 2026 financial statements show a loss of 3 000 euros, so free equity is 17 000 euros.
• On 18 May 2027 the annual meeting adopts them and decides to return 15 000 euros from that sub-account, available at once. The company stays able to pay its debts.
• Her own investment, within ten years, followed separately: a disposal. Gain 15 000 − 15 000 = 0, no tax, no withholding. 5 000 euros of investment and acquisition cost remain, but only 2 000 euros is distributable until profits cover the loss.
• The company files the annual return by Monday 31 January 2028 and puts the return on its Form 6B for 2027.

Had the 20 000 euros sat in one account with 5 000 euros of transferred profits, a fifth of the return, 3 000 euros, would be a dividend. Had the money become available after 2 March 2036, all of it would be.

SVOP or a loan to the company

Common mistakes

• One SVOP account for investments and transferred profits, split afterwards.
• A decision that does not name the fund or sub-account.
• Taking money out without a decision. That is not a return of capital but an unlawful distribution, which the recipient may have to repay with interest (OYL 13:1, 13:4). For tax it is a hidden dividend, taxed as earned income, unless the company properly books it as salary or as a shareholder loan meant to be repaid.

Frequently asked questions

Is a return of capital from the SVOP fund taxable?

From an unlisted Oy it is taxed as a disposal if it returns your own investment within ten years and you can show it; up to what you invested the gain is usually zero. Otherwise, and always from a listed company, it is a dividend.

Does an SVOP investment have to be registered?

A share issue and new shares are registered (OYL 9:7, 9:14). An investment without new shares is shown in the books and the balance sheet.

What we do

We keep the books for small Oys, set up the SVOP sub-accounts, prepare the bookkeeping side of the decisions and file the returns. Tax planning of a capital return may need individual advice. See limited company accounting or request a quote.

Sources

• Tax Administration: distributions from the unrestricted equity fund in taxation, VH/7443/00.01.00/2024 (in Finnish)
• Tax Administration: hidden dividend, VH/3393/00.01.00/2025 (in Finnish)
• Tax Administration: annual information return on capital returns taxed as a disposal, instructions 2025–2026 (in Finnish)
• Tax Administration: annual information return on dividends, instructions 2026 (in Finnish)
• Tax Administration: Form 6B filing instructions (in Finnish)
• Tax Administration: tax bases
• Finlex: Limited Liability Companies Act 624/2006, chapters 1, 6, 8, 9 and 13 (in Finnish)
• Finlex: Income Tax Act 1535/1992, sections 10, 32, 33 a, 33 b, 45 a and 46 a (in Finnish)
• Finlex: Business Income Tax Act 360/1968, section 6 (in Finnish)

Please note: this is general information about Finnish rules, not advice for your own situation, and the rules change. Ask us before you act on it.

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