Finland’s Tax Administration has released updated guidance on applying the Minimum Tax Act (1308/2023) to large groups, clarifying how profits, losses and relevant taxes must be allocated across entities in complex Pillar Two scenarios. The revised document, published on 25 November 2025, incorporates OECD administrative guidance to June 2024 and includes 42 practical examples.
Finland’s Tax Administration has issued an updated version of its guidance on the Law on Minimum Tax by Large Groups (Laki suurten konsernien vähimmäisverosta), providing fresh clarification on how profits, losses and taxes should be allocated among different entities within multinational and large domestic groups under the Pillar 2 rules.
Released on 25 November 2025, the update focuses on several special situations where the allocation of income and taxes deviates from straightforward jurisdictional blending. Under the minimum tax system, a group’s effective tax rate is assessed separately for each jurisdiction based on the accounting income and taxes of the units located there. However, particular structures require redistribution of those amounts across group units.
Key areas addressed
The guidance examines the allocation of profits or losses and relevant taxes in three main scenarios:
- Permanent establishments (Chapter 2)
- Intermediate or controlled foreign corporation–type entities (Chapter 3)
- Flow-through and hybrid entities (Chapter 4)
These areas are among the most challenging in implementing a jurisdiction-by-jurisdiction minimum tax calculation. To support taxpayers, the Tax Administration has included 42 illustrative examples, demonstrating how the rules apply in practice.
Alignment with OECD administrative guidance
The updated guidance has been drafted to reflect the OECD’s administrative guidance on Pillar 2 published up to June 2024. According to the Government’s proposal HE 98/2024 vp, Finland’s implementation of the EU Minimum Tax Directive (2022/2523) requires incorporating OECD administrative guidance into national legislation—including where legislative amendments are necessary.
The Tax Administration notes that aspects of the OECD guidance not yet addressed in legislative materials may still be refined as Finland’s legislative process continues. Consequently, the guidance will be updated further as needed.
This document forms part of a comprehensive suite of guidance on the Minimum Tax Act issued by the Tax Administration. The updated guidance relies on the Government proposals HE 77/2023 vp and HE 98/2024 vp and key OECD materials, including the 2023 consolidated commentary and the OECD’s June 2024 administrative guidance.
