Castrén & Snellman, a law firm based in Helsinki, highlights Finland's new tax credit legislation aimed at fostering a climate-neutral economy. The bill targets large investments of at least EUR 50 million, requiring companies to apply for the tax credit before commencing specific project works. Eligible companies can deduct these costs from their corporate income tax, with the credit claimed in euros. The tax credit applies to investments in renewable energy production, energy storage, and industrial decarbonisation, promoting a transition to a climate-neutral economy. The legislation specifies that the tax credit is capped at EUR 150 million per company, with completion deadlines set for the supported projects. Companies must ensure that the relevant equipment is fully operational within 36 months of receiving the tax credit, with penalties for delays. The initiative aims to drive industrial investment towards sustainable practices and green technologies. The tax credit scheme provides a 20% deduction on eligible costs, directly impacting corporate income tax payments. However, the annual deduction is limited to 10% of the total credit amount or the company's income tax for the year. The legislation also sets a maximum time limit of 20 years for utilizing the tax credit, starting from 2028. This incentivizes timely and effective investment implementation. The introduction of the tax credit is lauded as a positive step towards encouraging environmentally friendly investments within strategic sectors. The initiative aligns with Finland's commitment to achieving a climate-neutral economy, reflecting a proactive approach to sustainable development. Companies considering the tax credit are advised to review the conditions thoroughly before applying to maximize the benefits of this green-focused incentive.