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Tax loss carryforward in Finland: Oy and sole trader rules

Karma Accounts · Published 29 October 2026

In Finland a business loss confirmed in your tax assessment (vahvistettu tappio) is deducted from your business profits over the next 10 tax years, oldest loss first, as profits arise. The Tax Administration (Verohallinto) does this automatically: you do not claim it, and you cannot save it for a later year. A limited company (Oy) loses the right if more than half of its shares change owner during or after the loss year, other than by inheritance or will, unless it is granted an exemption. A sole trader (toiminimi) can instead have a new loss deducted from capital income of the same year.

The basic rules for using tax losses

The loss that counts is the tax loss, calculated under the Business Income Tax Act (EVL), not the result in your books (TVL 119 §). Non-deductible items, such as half of entertainment, make it smaller.

How the loss is confirmed and where you see it

There is nothing to apply for. The Tax Administration confirms the loss in the loss year's tax assessment; the amount is in the tax decision, which companies receive in MyTax (OmaVero). Later decisions show how much has been deducted. Keep them as your record of the losses.

Limited company: deducting losses from business income

For an Oy the taxable income is the year's business result less the confirmed losses of earlier years, and the tax on what is left is 20 % (TVL 30 § 4 mom and 124 § 2 mom). On Form 6B you report only the year's result: do not type in earlier losses (how to fill in Form 6B). Deadlines and payment: company tax return.

Worked example: a loss and two profitable years

A one-owner consulting Oy, calendar-year accounts, no other losses.

• 2026. The book loss of 31 000 euros includes 2 000 euros of entertainment, half of it non-deductible, so the confirmed tax loss is 31 000 − 1 000 = 30 000 euros.
• 2027–2028. The loss covers all of the 2027 profit, and the 12 000 euros left are deducted in 2028.

Without the loss, the two years' tax would have been 3 600 + 5 000 = 8 600 euros: the loss saved 6 000, which is 20 % of 30 000.

Now suppose the 2028 profit is only 5 000 euros, leaving 7 000 euros of loss, and in 2029 the owner sells 60 % of the shares to an investor. More than half have changed owner after the loss year, so the 7 000 euros can no longer be deducted without an exemption.

The 18 % rate and 25 years: still a proposal

Government proposal HE 151/2026 would cut the corporate rate to 18 % from tax year 2027 and give companies' losses from tax year 2026 onwards 25 years. Sole traders keep 10. The Finance Committee backed it unchanged (VaVM 22/2026) and the first reading was on 23 October 2026, but on 29 October it is not yet law. If enacted as proposed, the 2028 tax in the example would be 18 % × 13 000 = 2 340 euros.

The ownership change rule (TVL 122 §)

A company's loss is not deducted if, during the loss year or after it, more than half of its shares have changed owner other than by inheritance or will. In practice:

• Every kind of transfer counts: a sale, an exchange or a gift, also between existing shareholders. One owner selling 51 of 100 shares to the other is enough.
• Changes add up. All changes during and after each loss year are counted together, the same shares only once. Of 100 shares, 20 sold in 2026 and another 40 in 2027: the 2026 loss is lost (60 %), the 2027 loss survives (40 %).
• Indirect changes count. If more than half of the shares change owner in a company that owns at least 20 % of your Oy, its shares in your Oy count as changed.
• Share issues count only to the extent they depart from shareholders' pre-emptive rights.
• Timing is when ownership passes, usually when the sale agreement is signed.
• Listed companies keep their losses unless more than half of the shares not admitted to trading on a regulated market change owner. First North shares do not qualify.

Report a change of more than half on Form 6B whenever it happens, even if the company has no losses. Changes by inheritance or will are not reported.

The exemption (poikkeuslupa)

The Tax Administration can, for special reasons, allow the deduction when it is needed for the business to continue (TVL 122 § 3 mom). Under its guidance:

• Who applies: the company whose losses are concerned, never the buyer or seller in their own name.
• When: before or after the change; there is no statutory deadline. Applying before, give the parties, timing and main terms.
• How: in writing, also in MyTax, explaining the change and its reasons, ownership and business before and after, and the losses. Attach the sale agreement, preliminary agreement or meeting minutes and the latest financial statements.
• What is weighed: whether the business continues and the losses were not what was bought. Typical special reasons are a generational change, a sale to employees and changes inside a group. A company whose business has stopped and whose value is mainly its losses usually gets no permit.
• The decision names the tax years it covers and is a chargeable service. You can ask the Assessment Adjustment Board in writing to correct it within 60 days of receiving it.

Sole trader: business loss, capital income and earned income

For a sole trader the Tax Administration confirms a loss as a loss of the business by default. It is then deducted from the business result of the next 10 years, before the 5 % entrepreneur's deduction and before the result is split into capital and earned income (net assets and the capital income share). Years in which no financial year ends are not counted. The ownership change rule does not apply to a sole trader.

The other option is to have the loss deducted, wholly or partly, from your capital income of the same year (TVL 59 §). You must ask before that year's assessment ends; the date is in MyTax. When the business result is a loss, MyTax asks whether to deduct it from capital income ("Tappion vähentäminen pääomatuloista"): answer yes and give the amount (Form 5 return).

If the loss is bigger than your capital income, the difference is a capital income deficit. 30 % of it, at most 1 400 euros a year (1 800 with one minor child, 2 200 with two or more), is credited against the tax on your earned income, such as wages: the deficit credit (alijäämähyvitys). The child increase is per couple; a credit your own tax cannot absorb can, on request, go to your spouse (TVL 131 and 134 §). The part of the deficit not covered by a credit is confirmed as a capital income loss, which is deducted only from capital income of the next 10 years, never from business profits (TVL 60 and 118 §). If you expect little capital income, move only part of the loss.

Example: a 4 000 euro business loss in 2026 and 1 000 euros of rental income after expenses, no other capital income. Moved to capital income, the loss leaves a 3 000 euro deficit and a credit of 900 euros against your wage tax, if you have that much. Not moved, it waits for future business profits.

A business loss is never deducted directly from wages, and once confirmed it cannot be moved to capital income later, except when you close the business: unused losses then go against capital income within 10 years of the loss year (TVL 121 §).

Common mistakes

• Typing last year's loss on Form 6B or Form 5.
• Treating the book loss as the tax loss.
• Selling shares, or issuing new ones to an investor, without checking the losses or applying for an exemption first.

Frequently asked questions

How long can I carry forward a tax loss in Finland?

10 tax years after the loss year. A proposal would give companies' losses from 2026 onwards 25 years; it is not law yet.

Does selling my Oy's shares cancel its losses?

Yes, if more than half of the shares change owner during or after the loss year, directly or indirectly and other than by inheritance or will, unless an exemption is granted.

Can a sole trader deduct a business loss from salary?

Not directly. You can move a new loss to capital income, and the resulting deficit gives a credit against tax on earned income, normally up to 1 400 euros, more with children.

What we do

We prepare Forms 6B and 5 so losses are confirmed and carried forward, check share sales against the ownership change rule and help with exemption applications. See limited company accounting or request a quote.

Sources

• Finlex: Income Tax Act 1535/1992, sections 30, 59, 60, 117–122, 124, 131 and 134 (in Finnish)
• Tax Administration: confirmed loss and ownership change, VH/2186/00.01.00/2020, 24.6.2020
• Tax Administration: losses, limited companies and cooperatives
• Tax Administration: losses of a self-employed person (in Finnish)
• Tax Administration: entrepreneur's deduction (in Finnish)
• Tax Administration: deficit credit (in Finnish)
• Parliament: HE 151/2026 vp, processing record (in Finnish)
• Tax Administration: government proposes 18 % corporate tax and longer loss deduction, 17.9.2026 (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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