Banks|The government decided in the budget rush on Tuesday to postpone the taxation of bonuses until the beginning of 2026. After that, the bonus earned on the mortgage is taxed if it is used to pay for insurance.
The summary is made by artificial intelligence and checked by a human.
From the beginning of 2026, capital gains tax will be paid on bonuses paid by OP if they are used to pay for insurance.
OP Group CEO Timo Ritakallio assures that the interests of the owner-customers will be preserved.
Bonuses are tax-free if they are used for banking services from which they were earned.
The Finnish Competition and Consumer Agency proposed a law change in 2021 due to the distortion of competition.
of the OP group director general Timo Ritakallio assures that the interests of the OP group’s owner-customers will not diminish, even though the government decided to tax bonuses in certain situations.
From the beginning of 2026, capital gains tax must be paid on bonuses if they were earned from banking services but are used to pay for insurance.
The use of bonuses would still be tax-free if the benefit they bring is directed to the services from which the bonuses have been accumulated. In other words, bonuses from banking services could be used in addition to service fees, for example, to pay the interest costs of a loan.
Ritakallio tells in the blog postthat changes to the bonus system are being prepared.
“We are currently preparing the necessary changes, and we will inform our owner-customers about the progress of the change and its effects as soon as it is possible,” Ritakallio writes.
According to him, the benefits will not decrease due to the decision.
“Our owner-customers will continue to receive at least as good benefits as before,” he writes.
He therefore does not take a position on whether bonuses can be used to pay for insurance in the future, in which case they would be taxed. Or should the group move to a model where the bonuses received from banking services can only be used for banking services.
Typically, bonuses are accrued precisely from banking services, i.e. from secured loans, such as mortgages or investment funds. For example, for a mortgage of 100,000 euros, a bonus of 350 euros accrues this year.
The biggest payments, on the other hand, are usually related to insurance.
The government The proposed law is based on the initiative of the Finnish Competition and Consumer Agency (KKV) to the Ministry of Finance in 2021. According to the agency, the current practice has created a tax support that distorts competition, which has obscured competition in the insurance industry.
In practice, it has bound mortgage customers to also become insurance customers of Pohjola, which is part of the OP group.
Today, about two million Finns receive tax-free bonuses, and last year they accumulated 275 million euros. About half of the bonuses are usually used to pay for insurance.
Originally, the law changing the taxation of bonuses was proposed to enter into force already at the beginning of 2025, but the government decided in connection with the budget tussle that the reform will not come into force until 2026. This leaves time for the OP group to create a new reward model for customer owners.
The change in the tax treatment of bonuses is a measure aimed specifically at the OP group. It does not apply, for example, to S Group’s retail bonuses, because according to the bill, taxation would only apply to bonuses accrued from banking services.
OP group is owned by its customers through cooperative banks. In some way, the possible profits are therefore channeled to the benefit of the customers.
Some of the cooperative banks pay annual interest on the cooperative capital invested by customers, but the vast majority of the benefit is channeled to the owners either as discounts or in the form of bonuses determined through transactions.
The bonus systems of cooperative companies have been in the teeth of their listed competitors for twenty years.
OP group bought the entire insurance company Pohjola in 2005 as part of the listed Oko, and ten years later the entire Oko/Pohjola was delisted.
The joint sale of banking and insurance services worked so well that the group’s market share began to grow rapidly. According to the Bank of Finland’s statistics, OP’s market share of the mortgage portfolio was 39 percent in the spring. Even in non-life insurance, the market share has been more than 30 percent.
In 2015, the insurance company If, which is part of the Sampo Group, asked KKV to find out whether the OP Group misuses its dominant market position when it has linked non-life insurance and banking services through its bonus program.
After an investigation that lasted more than three years, KKV said that it found no evidence that the bonus program would significantly limit competition in the non-life insurance market to the detriment of consumers.
However, KKV stated that the tax treatment of bonuses favors OP at the expense of competitors. So the investigations continued and the end result was a proposal to change the law.