On 28 December 2023, Finland’s Ministry of Finance declared that it passed the bill HE 77/2023 vp. This bill enacts the implementation of the Pillar 2 global minimum tax by Council Directive (EU) 2022/2523 of 14 December 2022.
On 19 October 2023, Finland formally introduced the legislation for implementing the European Union’s (EU) Minimum Tax Directive-Pillar 2.
This includes the introduction of the Pillar 2 income inclusion rule (IIR) and the undertaxed payment/profit rule (UTPR) to ensure a minimum corporate tax of 15% for large multinational (MNE) groups with annual consolidated revenue of at least EUR 750 million in at least two of the preceding four fiscal years. The rules apply to all domestic and international groups with a parent company or subsidiary in an EU member state. The bill also proposes implementing a qualified domestic minimum top-up tax (QDMTT) for members of in-scope groups, referred to as a domestic supplemental tax by Finland.
The IIR and QDMTT apply for financial periods beginning on or after 31 December 2023, while the UTPR generally applies for financial periods beginning on or after 31 December 2024. However, where another EU Member State has made the election to not apply the IIR and the UTPR for six consecutive fiscal years beginning from 31 December 2023 (Article 50 of the Directive), then the UTPR applies for financial periods beginning on or after 31 December 2023 in respect of MNE groups parented in such other Member State.
