Of the one percentage point increase in corporate tax, 45 percent would target the highest income percent, the Kalevi Sorsa Foundation's report says.
Community tax the decrease would lead to an increase in income differences, writes the Kalevi Sorsa Foundation in a report published on Thursday. The Kalevi Sorsa foundation is a think tank operating on a social-democratic value base.
A tax on the rich – according to the report, tax changes in one direction or another affect the income generation of Finns with very high incomes. For example, of a one percentage point increase in corporate tax, 45 percent would go to the highest income percent.
The foundation's report on the income distribution effects of corporation tax is known to be the first of its kind in Finland.
With community tax refers to the income tax paid by limited companies and other entities. Corporate tax is collected annually in Finland, about eight billion euros. A change of one percentage point in the corporate tax level would affect tax revenues by approximately EUR 400 million annually.
The Economic Research Institute (Etla) proposed in January that Finland would reduce its corporate tax from the current 20 percent to 15 percent.
“The European countries have just agreed on a minimum tax rate of 15 percent, which can become a new target for all countries that are still above that,” Etla's research manager, expert in international taxation Olli Ropponen your line in January.
In Etla's growth recommendations to the government, the matter is stated more directly: “Reduction of corporate tax (5% units).”
Tax director of the Confederation of Finnish Business (EK). Anita Isomaa says that the EK has not, at least so far, considered the adjustment of the global minimum tax level to have affected its views on the level of corporate tax.
“We follow competitor countries and what is happening elsewhere,” says Isomaa.
“It is important that Finnish taxation remains competitive.”
Researcher who wrote the Kalevi Sorsa Foundation report, doctor of political science Saska Heino says that raising the corporate tax would reduce income differences.
“Correspondingly, lowering it would benefit Finns with the highest incomes the most, as the vast majority of corporate tax is directed at them,” Heino says in the announcement.
Heinon the calculations of the survey are based on Statistics Finland's data on Finnish companies and their owners.
The application of corporation tax has been evaluated in the study from the perspective of shareholders who own companies directly or through holding companies.
What is exceptional about Heino's research is that, with the help of the information obtained from Statistics Finland, it has been possible to examine the chaining of holdings in several holding companies, so that it has been possible to connect the income streams up to the tax information of natural persons.
The study combined the income and balance sheet data of companies operating in Finland with their profit distribution data, and this Profit distribution data with the individual owners' own personal tax data.
“Of course they are not without apertures, but they give quite a comprehensive picture,” says Heino.
in Finland a holding company that owns at least ten percent of a listed company does not have to pay dividend tax on dividends distributed to the company.
This allows dividends distributed to large owners to be fattened up in the holding company over the years so that the tax payment can be deferred until the assets are sold.
At the same time, reduced company dividends can be withdrawn annually from holding companies to unlisted companies.
These lightly taxed dividends can be withdrawn up to a maximum of 150,000 euros per year per person.
“This is a significant and exceptional feature of the Finnish tax system,” says Heino.
Saska Heino will present his research on Friday, February 2 at the Sorsa Foundation At the Veroarena event Helsinki Central Library in Oodi.
You can also follow the program containing presentations by several international and domestic tax researchers I stream via online.
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