Finland has transposed the OECD/G20 Pillar Two Global Anti-Base Erosion (GloBE) rules into domestic law, introducing a 15% minimum effective tax rate for multinational enterprise (MNE) groups with consolidated revenues exceeding EUR 750 million. The legislation, effective for fiscal years starting on or after 31 December 2025, implements the Income Inclusion Rule (IIR) and the Undertaxed Profits Rule (UTPR) to ensure that top-up tax is collected where the group’s effective tax rate falls below the minimum. The Finnish Tax Administration has issued detailed guidance on the calculation of covered taxes, qualifying income, and the application of transitional safe harbors (CbCR safe harbor, routine profits test).
Key Takeaways
- Scope and Threshold: The rules apply to MNE groups with annual consolidated revenue of at least EUR 750 million in at least two of the four preceding fiscal years. Both Finnish-headquartered groups and foreign groups with a Finnish constituent entity are within scope.
- Top-Up Tax Mechanism: Where a jurisdiction’s GloBE effective tax rate is below 15%, a top-up tax is imposed. The IIR allocates top-up tax to the ultimate parent entity (UPE) jurisdiction; the UTPR serves as a backstop for low-tax jurisdictions that do not implement a qualified IIR.
- Transitional Safe Harbors and Filing: For fiscal years 2026–2028, groups may apply the CbCR safe harbor to simplify compliance. The Finnish Tax Administration requires a GloBE Information Return to be filed within 18 months of the fiscal year-end (15 months after the first year).
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement