Finnish Corporate Tax Reforms

Abstract

In 1990 Finland shifted from the dividend deduction system to the imputation system and adopted the dual income tax system in 1993. Do these comprehensive tax reforms promote Finland to be an attractive site for investments? Is it now easier for firms to raise risk capital? What is the impact of the reforms on the behaviour of foreign and domestic investors in the Finnish stock market? Has the overall tax burden on dividends decreased? Is the current Finnish corporate tax system in harmony with the international tax systems? The effects of the corporate tax reforms have been studied in an international and theoretical framework. The empirical analysis is carried out by using the corporate microsimulation models developed by VATT.