New guidance issued 13 April 2026 outlines transitional relief and safe harbour mechanisms for large groups navigating global minimum tax rules, including five-year exemptions for qualifying multinationals, simplified reporting options, and the Side-by-Side package enabling coordination with parallel tax systems like the US. 

RF Report

Finland’s Tax Administration issued a comprehensive guidance on simplified tax calculation provisions under the Minimum Tax Act (1308/2023) on 13 April 2026, offering significant relief to large multinational and domestic groups navigating complex reporting requirements.

The provisions, which incorporate OECD guidelines updated through January 2026, aim to reduce the administrative burden during the early implementation phases of global minimum taxation.

Five-year relief for early-stage international groups

Under Chapter 9, Section 2 of the Minimum Tax Act, multinational groups in early stages of international operations and large domestic groups can benefit from a five-year transitional period where supplementary tax is reduced to zero in most domestic situations.

To qualify, multinational groups must meet two criteria: operate in a maximum of six jurisdictions during the financial period, and maintain tangible assets with a total net book value not exceeding EUR 50 million outside their reference jurisdiction. The reference jurisdiction is determined as the location where group entities hold the highest total value of tangible assets in the first year the group falls under the Act’s scope.

For large domestic groups, the only requirement is that the relief applies during the first five financial years after becoming subject to minimum taxation. However, this provision does not eliminate reporting obligations—groups must still submit supplementary tax information returns within specified periods.

Importantly, the transitional provision does not exempt parent entities from applying profit inclusion rules to foreign group entities subject to low taxation. Finnish entities with parent entities applying profit inclusion rules also remain liable for domestic supplementary tax.

Transitional country-by-country reporting safe harbour

The temporary Country-by-Country Reporting (CbCR) Safe Harbour applies to financial periods beginning on or before 31 December 2027 and ending no later than 30 June 2029. Groups can elect to apply this provision annually on a jurisdiction-by-jurisdiction basis.

The safe harbour offers three alternative pathways to achieve zero supplementary tax:

  • De minimis rule: Applies when total group revenue in a jurisdiction falls below EUR 10 million and profit before income taxes is less than EUR 1 million, based on qualifying CbC tax reports.
  • Simplified effective tax rate rule: The jurisdiction’s supplementary tax is deemed zero if the simplified effective tax rate meets or exceeds the transitional threshold—15% for financial years beginning in 2023-2024, 16% for 2025, and 17% for 2026-2027.
  • Substance-based deduction rule: Supplementary tax is considered zero when the jurisdiction’s profit before income taxes equals or falls below the substance-based deduction calculated under minimum tax rules. Groups not required to file CbC reports can still utilise these provisions by completing the presumption rule section in their supplementary tax return using information from qualifying financial statements.

Qualifying financial statements requirements

For the CbCR safe harbour provisions to apply, information must derive from qualifying financial statements. These include financial statements used in preparing consolidated financial statements, separate financial statements prepared under acceptable or approved accounting standards, or accounting records for immaterial entities excluded from consolidation solely for size reasons.

The guidance emphasises consistency—groups must use the same source of qualifying financial statements for all entities in a jurisdiction, with limited exceptions for permanent establishments and immaterial entities. Purchase price allocation (PPA) adjustments from acquisitions can disqualify financial statements unless consistently included since financial periods starting 31 December 2022.

Additional safe harbour provisions

Under-taxed profits rule safe harbour: For financial periods beginning on or before 31 December 2025 and ending before 31 December 2026, supplementary tax related to the under-taxed profits rule is deemed zero if the ultimate parent entity’s jurisdiction applies a corporate tax rate of at least 20%.

Domestic Supplementary tax presumption: When a jurisdiction’s qualifying domestic supplementary tax meets specific conditions and has been approved through OECD peer review, groups can avoid profit inclusion rule calculations. Finland’s domestic supplementary tax has received this approval.

Immaterial group entity safe harbour: This permanent provision allows simplified calculations for entities excluded from consolidated financial statements due to immateriality. The supplementary tax is deemed zero if the entity meets the routine income, minor activity, or effective tax rate tests using simplified calculations.

Substance-based tax incentive safe harbour

Effective from 1 January 2026, this permanent provision reduces supplementary tax to the extent it arises from qualifying substance-based tax incentives. Qualifying incentives include generally available tax benefits calculated based on incurred expenses or production volume of tangible assets.

The incentive amount is limited by a substance-based cap—the higher of 5.5% of qualifying payroll costs or depreciation of qualifying tangible assets. Alternatively, groups can elect to use 1% of tangible assets’ acquisition cost (excluding land) through a five-year election.

Side-by-Side system provisions

The Side-by-Side package, published by the OECD in January 2026, introduces a “parallel model” designed to coordinate different tax systems. The package includes the Side-by-Side Safe Harbour and the UPE (Ultimate Parent Entity) Safe Harbour, both of which generally apply to financial years starting on or after 1 January 2026.

This system excludes group units from minimum taxation if their ultimate parent unit is located in a jurisdiction with a qualifying “parallel system” and that jurisdiction does not apply a domestic supplementary tax. When this presumption applies, the supplementary tax related to both the profit and loss rule and the undertaxed profits rule is considered to be zero.

Jurisdictions are deemed qualifying through a special peer review by the OECD and G20 Inclusive Framework. As of the drafting of these guidelines, the US is listed in the OECD’s central system as having a qualifying parallel system.

The Side-by-Side package also contains instructions for a Simplified Effective Tax Rate (ETR) Safe Harbour, which is set to apply from financial periods starting on 1 January 2027.

Even under the parallel model, Finnish group units must still fulfil reporting obligations, including submitting a supplementary tax information return for Finnish domestic supplementary tax.