Record number of Finnish businesses shut down in 2024

Record number of Finnish businesses shut down in 2024

One explanation behind some of the nearly 44,000 closures may have been changes to the EU's VAT policy for SMEs, according to Statistics Finland.

Business closures hit record high in 2024 amid tax changes

A record number of businesses ceased operations in Finland in 2024, driven largely by the closure of sole proprietorships, according to new data from Statistics Finland. The number of firms that shut down in the final quarter of the year reached 16,188, nearly double the figure from the same period in 2023. Of these, 11,310 were sole proprietorships, up from 4,654 a year earlier.

The Finnish government is discussing lowering personal and corporate income taxes by a few percentage points from the current 20 percent. Experts believe that income taxes should be reduced primarily for start-ups, which would help the economy grow most effectively.

According to Statistics Finland, the general government deficit was 12.2 billion euros last year.

The government is expected to make a decision on whether to lower corporate tax rates during the mid-term elections. Lowering corporate tax rates is often justified by the argument that it would increase economic growth. However, recent research does not support the view that lowering corporate tax rates would pay for itself in this way.

Corporate tax has been reduced twice in Finland in just over ten years.