Thicker snowpacks and their insulation effects cause winter-warming and invoke thaw of permafrost ecosystems. Temperature-dependent decomposition of previously frozen carbon (C) is currently considered one of the strongest feedbacks between the Arctic and the climate system, but the direction and magnitude of the net C balance remains uncertain. This is because winter effects are rarely integrated with C fluxes during the snow-free season and because predicting the net C balance from both surface processes and thawing deep layers remains challenging. In this study, we quantified changes in the long-term net C balance (net ecosystem production) in a subarctic peat plateau subjected to 10 years of experimental winter-warming. By combining(210)Pb and(14)Cdating of peat cores with peat growth models, we investigated thawing effects on year-round primary production and C losses through respiration and leaching from both shallow and deep peat layers. Winter-warming and permafrost thaw had no effect on the net C balance, but strongly affected gross C fluxes. Carbon losses through decomposition from the upper peat were reduced as thawing of permafrost induced surface subsidence and subsequent waterlogging. However, primary production was also reduced likely due to a strong decline in bryophytes cover while losses from the old C pool almost tripled, caused by the deepened active layer. Our findings highlight the need to estimate long-term responses of whole-year production and decomposition processes to thawing, both in shallow and deep soil layers, as they may contrast and lead to unexpected net effects on permafrost C storage.