Dividend tax in Finland 2026 — what is left of a private company dividend?
A dividend from a private limited company is split for tax into a capital-income dividend and an earned-income dividend by two limits: 8 per cent of the mathematical value of the shares and 150,000 euros a year per recipient. When the dividend stays within the 8 per cent limit and under 150,000 euros, 25 per cent of it is taxable capital income and 75 per cent is tax-free.
The capital-income tax rate is 30 per cent up to 30,000 euros and 34 per cent above that. In practice the effective rate on a dividend inside the 8 per cent limit stays around 7.5 per cent. Below are three worked examples, both limits in euros, and the point at which the dividend turns into more heavily taxed earned income.
- 8 %
- light-dividend limit of net assets
- €150,000
- personal annual limit
- 25 %
- taxable of a capital-income dividend
- 7.5 %
- effective rate within the limit
How is a private company dividend taxed?
The dividend is split in two depending on whether it exceeds 8 per cent of the mathematical value of the shares. The mathematical value is calculated from the company net assets of the previous financial year — assets minus liabilities, divided by the number of shares. The larger the net assets, the larger the dividend that can be drawn at the light rate.
- Capital-income dividend: the part that is at most 8 % of the mathematical value of the shares.
- Earned-income dividend: the part above the 8 % limit, taxed progressively like a salary.
- The 150,000 euro limit is personal and covers all the recipient private-company dividends in a year combined.
Taxation of the capital-income dividend
When the dividend is at most 8 per cent of the mathematical value and the recipient private dividends stay under 150,000 euros a year, 25 per cent of the capital-income dividend is taxable and 75 per cent is tax-free. The taxable part is taxed at 30 per cent up to 30,000 euros and 34 per cent above. Because only a quarter is taxable, the effective rate stays around 7.5 per cent.
Above the 150,000 euro limit the split changes: 85 per cent becomes taxable capital income and only 15 per cent is tax-free. The limit is personal, not per company — if you hold shares in several private companies, all light dividends from them count together toward this limit.
| Part of the dividend | Taxable | Tax type |
|---|---|---|
| Within 8 % limit, under €150,000 | 25 % | capital income 30 / 34 % |
| Within 8 % limit, over €150,000 | 85 % | capital income 30 / 34 % |
| Above the 8 % limit (earned dividend) | 75 % | earned income, progressive |
Three worked examples
The examples assume you own the whole company, so the mathematical value of your shares equals the company net assets. The final tax on an earned-income dividend depends on your other earned income, so only the taxable income part is shown here.
| Situation | 8 % limit | Capital-income tax | Effective |
|---|---|---|---|
| Net assets €500,000, dividend €40,000 | €40,000 | €3,000 | 7.5 % |
| Net assets €200,000, dividend €16,000 | €16,000 | €1,200 | 7.5 % |
| Net assets €100,000, dividend €20,000 | €8,000 | €600 + earned dividend | over 3 % |
Dividend or salary?
A dividend is often taxed more lightly than a salary, because it carries neither employer contributions nor employee contributions. A salary has its own merits: it accrues pension and social security and is a deductible cost for the company, whereas a dividend is paid out of already taxed profit. The company pays 20 per cent corporate tax on its profit before any dividend can be distributed.
A listed company dividend is taxed differently
Of a dividend from a publicly listed company, 85 per cent is taxable capital income and 15 per cent is tax-free. The 8 per cent rule does not apply to an ordinary retail investor at all — it concerns only the owner of a private company.
Calculators for this topic
FAQ
How much tax is there on a private company dividend in 2026?
When the dividend is at most 8 % of the mathematical value of the shares and under 150,000 euros, 25 % of it is taxable capital income. With a 30 % capital tax, the effective rate stays around 7.5 per cent.
What is the 8 per cent rule?
A dividend within 8 % of the mathematical value of your shares is taxed lightly as capital income. The part above that limit is taxed as earned income, progressively like your salary.
Does the €150,000 limit apply to the company or the owner?
The owner. The limit is personal and covers all light dividends received from private companies in a year. Above the limit, 85 % becomes taxable capital income.
Is it better to take salary or dividend?
A dividend is often lighter on tax, but a salary accrues pension and social security and is deductible for the company. The usual answer is a reasonable salary plus a lightly taxed dividend up to the 8 per cent limit.
How does a listed company dividend differ?
Of a listed company dividend, 85 % is taxable capital income and 15 % tax-free. The 8 per cent rule and net assets do not apply — they concern only a private company.