valmisteverotuksen

Valmisteverotuksen is a Finnish tax system that applies to certain types of income, primarily capital gains and income from the sale of shares. The term "valmisteverotuksen" translates to "preparation tax" in English, reflecting the system's focus on taxing income that has been prepared or accumulated over time. This system is distinct from the traditional progressive income tax system in Finland, which taxes income as it is earned.

Under valmisteverotuksen, individuals and companies are taxed on the difference between the value of their assets at the end of the tax year and their value at the beginning of the year. This difference is considered the "prepared income" and is subject to a flat tax rate. The system aims to simplify the tax calculation process and reduce the administrative burden on taxpayers.

The valmisteverotuksen system was introduced in Finland in 2019 as part of a broader tax reform aimed at improving the country's tax administration and reducing tax evasion. The reform also included changes to the corporate tax system, with a new flat tax rate of 17% applied to corporate income.

Critics of the valmisteverotuksen system argue that it can lead to higher tax liabilities for individuals and companies, particularly those with significant capital gains. Proponents of the system, however, contend that it provides a more straightforward and transparent approach to taxing capital gains, and that the overall tax burden is not significantly increased. The system has been the subject of ongoing debate and analysis in Finland, with ongoing discussions about its potential impact on the economy and the distribution of tax revenue.