Pillar 2 Dashboard: Finland

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.

In October 2025 a draft law was issued to implement the EU DAC 9 amendments.

On March 10, 2025 and March 12, 2025, Finland issued explanatory guidance on the application of the Minimum Tax Act, including provisions from the OECD June 2024 Administrative Guidance relating to the DTL recapture.

On August 12, 2024, the Finnish government issued draft legislation to amend its Global Minimum Tax Act to reflect aspects of the 2023 OECD Administrative Guidance. The draft law is subject to a consultation until September 6, 2024. On September 19, 2024, the draft law to amend the Minimum Tax Act was sent to Parliament. The amended legislation was published in the Official Gazette on December 19, 2024

On December 28, 2023, the Finnish President approved the ‘Law on the Minimum Taxation for Corporations’,  which implements the EU Minimum Tax Directive.

On August 15, 2023, the Finnish Ministry of Finance issued a draft law for the implementation of the EU Global Minimum Tax Directive.

GLOBE APPLICATION

General

As expected, the Minimum Tax Act closely follows the EU Directive. There are very few options given to member states in the EU Directive in terms of flexibility over national implementation.

The Explanatory Notes to the Minimum Tax Act confirm that GloBE implementation in Finland is as a completely new and separate type of tax.  As such, all provisions related to the GloBE rules will be in a standalone law. This includes administrative and procedural provisions which are not included in the Taxation Procedures Act but are included in the Minimum Tax Act.

Sections 23/25 of Chapter 1 of the Law provide that the definition of a Qualifying Income Inclusion Rule (QIIR) and Qualified Domestic Minimum Top-Up Tax (QDMTT) is based on the OECD Peer Review Process. As such the jurisdictions qualifying for transitional qualified status in the Central Record of Legislation, issued by the OECD on January 15, 2025 will be treated as having QIIRs and QDMTTs for Finnish GloBE purposes.

Administrative Guidance

Whilst the EU Directive and the Finnish Minimum Tax Act state that administrative guidelines issued by the OECD are to be used as a source of interpretation, most of the detailed provisions of the OECD Administrative Guidance are not included in the original Minimum Tax Act. However, the December 2024 Amendment Law includes numerous aspects of the OECD Administrative Guidance.

The only aspects of the First Set of OECD Administrative Guidance included in the original Minimum Tax Act are:

-Excess negative tax carry-forward guidance (Article 2.7);

-Substitute loss carry-forwards (Article 2.8);

-Provisions on restricted tier one capital for insurance companies (Article 3.3); and

-The application of the tax transparency election to mutual insurance companies (Article 3.6)

The December 2024 Amendment Law includes:

-Deemed consolidation test (Article 1.2)

-Sovereign wealth funds and the definition of Ultimate Parent Entity (Article 1.4)

-Excluded Equity Gains or Loss and hedges of investments in foreign operations (Article 2.2)

-Excluded Dividends – Asymmetric treatment of dividends and distributions (Article 2.3)

-Debt release Election (Article 2.4)

-Equity Gain or loss inclusion election (Article 2.9)

-Allocation of taxes arising under a Blended CFC Tax Regimes (Article 2.10)

-Liabilities related to Excluded Dividends and Excluded Equity Gain or Loss from securities held on behalf of policyholders (Article 3.4)

-Simplification for Short-term Portfolio Shareholdings (Article 3.5)

There are no provisions of the Second Set of OECD Administrative Guidance included in the original Minimum Tax Act (aside from for QDMTT purposes), however the December 2024 Amendment Law includes:

-Tax Credits Guidance (MTTCs) (Article 2)

-SBIE (foreign rules and operating leases) (Article 3)

No aspects of the Third Set of OECD Administrative Guidance are included in the original Minimum Tax Act, however the December 2024 Amendment Law includes:

-Additional provisions for the Transitional CbCR Safe Harbour

-Additional Blended CFC Rules

-Provisions for mismatches between Fiscal Years of the UPE and another Constituent Entity

The Fourth Set of OECD Administrative Guidance is not included in the law, and the Explanatory Notes to the December 2024 Amendment Law states that further legislation will be issued to provide for this.

The Tax Authority Guidance issued on March 12, 2025, includes the following additional aspects of the OECD Administrative Guidance:

-Covered Taxes on deemed distributions (Article 2.6 of AG1)

– Excess Negative Tax Carry-forward guidance (Article 2.7 of AG1)

– Substitute Loss carry forwards (Article 2.8 of AG1)

– Deferred tax assets with respect to tax credits under Article 9.1.1 (Article 4.1 of AG1)

– Applicability of Article 9.1.3 to transactions similar to asset transfers (Article 4.2 of AG1)

– Asset carrying value and deferred taxes under 9.1.3 (Article 4.3 of AG1)

– 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)

On November 3, 2025, Finland issued a draft law to amend its Minimum Tax Act for the June 2024 and January 2025 OECD Administrative Guidance. Aside from the above, the following are included:

-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.

Safe Harbour and Penalty Relief Guidance

The Minimum Tax Act includes the Transitional CbCR Safe Harbour. The QDMTT Safe Harbour and the Transitional UTPR Safe Harbour are not included in the original enacted law but are included in the December 2024 Amendment Law.

The revised Chapter 9, Section 10 of the Law provides that the QDMTT Safe Harbour is based on the OECD Peer Review Process. As such the jurisdictions qualifying for transitional qualified status in the Central Record of Legislation, issued by the OECD on January 15, 2025 will be treated as qualifying for the QDMTT Safe Harbour for Finnish GloBE purposes (unless an entity is not subject to domestic top-up tax in the jurisdiction or that has been denied its obligation to pay top-up tax other than because of a domestic top-up tax provision).

Transitional penalty relief is also included in Section 4, Chapter 9 of the Minimum Tax Act.

Simplified calculations for Non-Material Constituent Entities are included in the December 2024 Amendment Law.

The December 2024 Amendment Law also includes additional rules for the Transitional CbCR Safe Harbour, as provided in the Third Set of OECD Administrative Guidance:

-Transitional CbCR – Purchase Accounting Adjustments (consistent reporting condition, goodwill impairment adjustment) (Article 1)

-Transitional CbCR – JVs (Article 2.2.1)

-Transitional CbCR – Same Financial Statements/Local Financial Statements for Statutory Reporting (Article 2.3.1)

-Transitional CbCR – Using different accounting standards (Article 2.3.2)

-Transitional CbCR – Adjustments to Qualified Financial Statements/Dividend Mismatches (Article 2.3.3)

-Transitional CbCR – MNEs not required to file CbC Reports (Article 2.3.4)

-Transitional CbCR – Qualified Financial Statements for Pes (Article 2.3.5)

-Transitional CbCR – Treatment of hybrid arbitrage arrangements (Article 2.6)

ELECTIONS

Elections in the OECD Model Rules

The Minimum Tax Act includes all of the key elections as provided in the EU Minimum Tax Directive, including:

-Excluded Entity Election

-Election to use the Realization Method

-Stock-Based Compensation Election

-Election to Spread Capital Gains

-Consolidation Election

-GloBE Loss Election

-Tax Transparency Election

-Taxable distribution Election

-Unclaimed Accrual Election

-Distribution Tax Regime Election

-Substance-Based Income Exclusion Election

-Prior Year Adjustment Election

-De minimis Election

Elections in the Administrative Guidance

Only the Excess Negative Tax Carry-Forward Election is included from the OECD Administrative Guidance in the original Minimum Tax Act.

Other elections included in the OECD Administrative Guidance are included in the December 2024 Amendment Law. As such, the following are included:

-Foreign Exchange Hedge Election;

-Portfolio Shareholding Election;

-Debt Release Election;

-Equity Investment Inclusion Election;

-QDMTT Safe Harbour Election;

– Transitional UTPR Safe Harbour Election.

DEVIATIONS FROM THE OECD MODEL RULES/EU GLOBAL MINIMUM TAX DIRECTIVE

As expected, the Minimum Tax Act closely follows the EU Directive. There are very few options given to member states in the EU Directive in terms of flexibility over national implementation.

The key differences are with the OECD model rules. ie:

-The Minimum Tax Act extends the GloBE rules to include large scale, purely domestic groups,

-Finland applies the IIR to not only foreign subsidiaries but also to all domestic constituent entities. This is permitted but not mandatory under the GloBE Model Rules.

The OECD Model Rules allow flexibility as to how to apply the UTPR. Finland’s approach is to apply a UTPR top-up tax rather than a denial of deduction.

As such the carry forward provisions in Article 2.4.2 of the Model Rules for UTPR amounts not sufficient to provide for the additional cash tax expense are not relevant and these rules are not included in the Minimum Tax Act.

On March 12, 2025, the Finnish Tax Authority issued guidance on adjusted covered taxes under the Global Minimum Tax rules.

Under the Model GloBE Rules, the amount of tax to be taken into account is based on the taxable income of the financial year recorded in the accounting result. Section 9.1 of the Guidance clarifies that this is interpreted so that even if the tax has been recorded for the next accounting period (as tax for the previous period), it is considered part of the taxes to be taken into account for the previous period (when it is based on the determined profit or loss for the previous accounting period) providing the GIR has not been filed. Where tax adjustments are accounted for after the filing of the GIR, the guidance confirms that the standard rules in Article 4.6 of the Model Rules applies.

Chapter 8, Section 31 of the November 2025 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.

DOMESTIC MINIMUM TAX

General

Sections 12-19 of Chapter 2 of the Minimum Tax Act provide for a QDMTT (or at least a domestic minimum tax that is intended to be classed as a QDMTT) as of December 31, 2023.

QDMTT Design Features

Section 13 of Chapter 2 of the Minimum Tax Act provides that the method of calculation is to take the general top-up tax calculation. This is then subject to a number of specific amendments.

As provided in the OECD Administrative Guidance,  CFC taxes are not pushed down when considering the QDMTT ETR under Section 16 of Chapter 3 of the Minimum Tax Act. Sections 17-18 prohibit the pushdown of taxes for PEs, and Hybrid entities. This ties in with the Second Set of OECD Administrative Guidance. The December 2024 Amendment Law extends this pushdown restriction to taxes on profit distributions (aside from Finnish withholding taxes).

Under Section 14 of Chapter 3, top-up Tax under a QDMTT in respect of Joint Ventures and Minority-Owned Constituent Entities is the whole amount irrespective of the fact that the UPE would only be subject to tax on its share of the Top-up Tax arising from Joint Ventures, JV subsidiaries, MOCEs.

The Finnish QDMTT applies the general GloBE rules to determine the accounting standard used. As such, the domestic minimum tax is calculated using the financial accounting standard of the UPE, and, if that is not practicable, on the basis of an accepted accounting standard or an approved accounting standard, if:

                -the constituent entity’s financial statements are prepared in accordance with that standard,

                 -the information contained in the financial statements is reliable; and

                 -permanent differences of more than EUR 1 million are conformed with the UPEs accounting standard.

Chapter 2, Section 15 of the Law provides that if the DMTT 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.

Registration

There are no registration provisions in the law.

Filing

The relevant aspects of the submission of a GloBE Information Return (GIR) are included, as provided in the EU Directive.

The approach is that every Constituent Entity located in Finland will have an obligation to file a GIR in Finland. However, this obligation can be discharged if the GIR is filed by:

-The Ultimate Parent Entity, or

-The Designated Filing Entity.

Where the GIR is being filed by either the Ultimate Parent Entity or the Designated Filing Entity, the Constituent Entity, must file a notification with the Revenue.

The notification must contain:

-Details of the entity that is filing the GIR, and

-The jurisdiction in which such an entity is located.

Where the GIR is filed by the Designated Local Entity it needs to outline the Constituent Entities that it is filing on behalf of.

Both the GIR and associated notifications must be filed no later than 15 months after the end of the fiscal year (with an 18-month deadline for the Transition Year).

The Minimum Tax Act also requires submission of an additional self- assessment return (referred to as a ‘GloBE Top-Up Tax Return’). The filing deadline is the same as the GIR.

Payment

Top-Up Tax is payable in accordance with the Tax Collection Act, however, the payment deadline is not stated in the Minimum Tax Act.

Penalties

Detailed penalty provisions are included in the law. A late filing penalty of between 1,000 EUR and 5,000 EUR applies.  A tax related penalty of between 10%-25% of the underpaid Top-Up Tax can also apply depending on the nature of the error.

None Issued