Capital gains tax: what every Finnish investor needs to know
Capital gains tax rates 2026: Capital gains tax in Finland is 30% on the first €30,000 of annual capital income and 34% on amounts above that. This is a flat rate system, not progressive like employment income. For example, on a €50,000 gain: 30% × €30,000 + 34% × €20,000 = €9,000 + €6,800 = €15,800 total tax.
Acquisition cost assumption: If you don't know your original purchase price, you can deduct 20% of the sale price as an assumed cost basis (40% if held over 10 years). Example: sell shares for €10,000 with unknown purchase price → 20% deduction = €2,000 → taxable gain €8,000 → tax €2,400 (not €3,000). This assumption can save significant tax.
Dividend taxation: Dividends from listed companies are taxed so that 85% is subject to capital gains tax and 15% is tax-free. So if you receive €1,000 in dividends, you pay capital gains tax on €850, which is €255 at 30% — an effective dividend tax rate of about 25.5%.
Loss carry-forward: Capital losses can be deducted against capital gains in the same year and the following 5 years. If you sell shares at a €20,000 loss in year X and make a €30,000 gain in year X+1, your net gain is €10,000 — tax around €3,000 (30%).
FIRE calculations in Finland: The classic "25× annual expenses" rule assumes a 4% withdrawal rate untaxed. In Finland, the 30–34% capital gains tax significantly reduces withdrawable amounts. When you retire and sell shares to live on, every euro of gains is taxed 30–34%. A practical rule of thumb: 30× annual expenses is a better starting point for Finland. If annual expenses are €30,000, aim for a portfolio of about €900,000.