The Government is proposing changes to dividend taxation and to valuation of corporate assets in share exchange situations

On 25 September 2025, the Government proposed changes to the taxation of dividend income and to how the assets of a company distributing dividends are valued in a situation where the company has carried out a share exchange. The changes apply only to limited situations where a company distributing dividends has been the acquiring party in a share exchange and the share exchange has taken place between associated parties. The above changes proposed to be made to the act on the valuation of assets in taxation (Laki varojen arvostamisesta verotuksessa 1142/2005) would be applied in the assessment of shares acquired in a share exchange on or after 1 January 2017.

In future, if a share exchange meets the conditions laid down in the legislative amendment, the acquired shares would be valued in the acquiring company’s calculation of net worth to the mathematical value they had before the share exchange. First and foremost, this change will affect the way the company’s net worth is calculated. Net worth, in turn, affects how a dividend is divided into a capital-income portion and an earned-income portion for purposes of tax assessment. Because of this, the change will also have an indirect effect on dividend recipients’ taxation in cases where the dividend recipient is a natural person.  

Changes to the filing of corporate assets could enter into force very quickly

Above all, the proposed legislative amendments would affect the valuation of corporate assets.  If a share exchange fulfils the conditions laid down in the amendment proposal, the share acquisition cost would need to be filed in a new way in future for purposes of tax assessment.

The changes may enter into force on a fast schedule: limited liability companies whose account periods end in December 2025 would be required to report their net worth in the new way. If the legislative amendment is passed, the Tax Administration will provide guidance on the matter as soon as possible.

Effects on dividend recipients’ tax assessment in tax year 2026

If a company distributing dividends has made a share exchange according to the proposed legislative amendment but has not assessed the shares in the calculation of net worth in the new way, the Tax Administration will adjust the company’s mathematical value in the tax assessment of natural persons’ dividend income and calculate the capital-income and earned-income portions of the dividends on the basis of the adjusted mathematical value in tax year 2026.

Changes to the taxation of share sales  

According to the proposed amendment, the acquisition cost of the target company’s shares would in future also be considered to be the mathematical value that the shares had before the share exchange in cases where the share exchange fulfils the conditions laid down in the amendment. This change would affect the taxation of share sales and apply only to share exchanges conducted on or after 1 January 2026.  

Other changes

The Government also proposes that

• the provision on the amount of cash consideration in a share exchange would be amended
• the provisions on the exchange of shares laid down in the act on the taxation of business income (Laki elinkeinotulon verottamisesta 360/1968) would be expanded to apply to non-EEA countries under certain conditions
• the act on the valuation of assets in taxation (Laki varojen arvostamisesta verotuksessa 1142/2005) would be amended to allow a company to seek adjustment of the reference value of its own share.

Read more:

Government proposal HE 125/2025 vp (available in Finnish and Swedish, link to Finnish)