Finland Issues a Draft Law for OECD Administrative Guidance Amendments

On November 3, 2025, Finland issued a draft law for consultation to amend its Minimum Tax Act for the June 2024 and January 2025 OECD Administrative Guidance. Most of the provisions apply from January 1, 2024.

OECD Administrative Guidance

Aspects of the June 2024 OECD Administrative Guidance (AG4) included in the Draft Law include:

-Recalculated deferred tax where GloBE carrying value differs from accounting carrying value (Article 2.1.2 of AG4)

-General rules for allocating cross-border, current taxes under a cross-crediting corporate tax system: 4 Steps (Article 3.1.3of AG4)

-Allocation of deferred tax expenses and benefits from a Parent Entity to a CFC, PE Hybrid or Rev Hybrid: 5 step process (Article 4.2 of AG4)

-Five-Year Election to exclude the allocation of all deferred tax expenses and benefits to CFCs, PEs, Hybrids and Rev Hybrids (Article 4.2.2 of AG4)

-Hybrid entities – Taxes pushed down include indirect owners (Article 5.5.2 of AG4)

-Extension of taxes pushed down to include Reverse Hybrids (Article 5.6.2 of AG4)

-Option to not impose top-up tax liabilities on SPVs used in securitization transactions (Article 6.1.4 of AG4)

The November 2025 Amendment Law also includes the deferred tax recognition amendments to Articles 9.1 of the GloBE Rules in the January 2025 OECD Administrative Guidance (including the grace period for DTA reversals). The consequential amendments to the Transitional CbCR Harbour are also included.

It should be noted that the Tax Authority Guidance issued on March 12, 2025 also includes the following additional aspects of AG4:

– Aggregate DTL Category basis (Article 1.2.1 of AG4)

– Exclusion of certain types of GL accounts and separate tracking (Article 1.2.1 of AG4)

– Exclusion of GL accounts that generate standalone DTAs (Article 1.2.1 of AG4)

– Exclusion of swinging accounts and separate tracking (Article 1.2.1 of AG4)

– FIFO/LIFO Basis (Article 1.2.2 of AG4)

– Aggregation of Short-term DTLs (Article 1.2.3 of AG4)

– Reversal of DTLs that accrued before the Transition Year (Article 1.2.2 of AG4)

– 5 year unclaimed accrual election (Article 1.2.2 of AG4)

– Extension of the Substitute Loss Carry-forward DTA to PEs, hybrids and reverse hybrids (Article 4.1 of AG4)

Anti-Avoidance Rule

Chapter 8, Section 31 of the November 2025 Draft Amendment Act provides for an anti-avoidance rule for financial periods beginning on or after January 1, 2026. It provides that if an in-scope group has entered into an arrangement that is contrary to the object or purpose of the Minimum Tax Act or a measure that is clearly intended to avoid the application of the Act to the group, to reduce the amount of top-up tax, or to avoid the top-up tax altogether, the Minimum Tax Act applies as if the measure had not been entered into.

QDMTT Amendments

Securitisation Entities

Chapter 2, Section 15 of the Minimum Tax Law provides that if the QDMTT has been allocated to an investment entity under the GloBE rules, the tax is payable by a group entity located in Finland which is not an investment entity and which has a direct or indirect holding in the investment entity. If there is more than one such entity, the amount of tax is apportioned among the entities in proportion to their shareholdings. If there are no non-investment entities in Finland the entity to which the DMTT has been allocated is liable for the tax. This is proposed to also apply to securitisation entities in the November 2025 Draft Amendment Law.

Initial phase of international activity exemption

The UTPR exclusion for MNEs in their initial phase of international activity does not need to be included in a QDMTT, however, it can be included. The Second Set of OECD Administrative Guidance provides jurisdictions with three options regarding the temporary UTPR exclusion in their QDMTT legislation.

Option one allows the jurisdiction not to adopt it.

Option two allows the jurisdiction to adopt it but limits it to cases where no Parent Entity is required to apply a Qualified Income Inclusion Rule with respect to Constituent Entities of an MNE Group located in the QDMTT jurisdiction.

Option three allows the jurisdiction to adopt it without any limitations.

The November 2025 Draft Amendment Law provides (with effect from January 1, 2024) that Option 2 will apply.