On 19 October 2023, the Government of Finland formally introduced domestic legislation in parliament for implementing the European Union’s (EU) Minimum Tax Directive-Pillar 2.
According to this directive, large multinational (MNE) groups must pay a corporate tax rate of 15% on their profits, provided that the consolidated annual turnover of the group is at least EUR 750 million. The rules apply to all domestic and international groups with a parent company or subsidiary in an EU member state.
If the country where the subsidiary company is based does not impose a minimum effective rate, the member state of the parent company can impose a “top-up” tax.
The directive carries provisions to ensure the adequate taxation of entities, even when the parent company is headquartered outside the EU, specifically in countries identified as low-tax jurisdictions that do not have equivalent rules. The directive must be incorporated into each member state’s national legal framework by 2023.
