Minimum tax rate for large-scale groups (OECD Pillar Two)

CURRENT INFORMATION

OECD has published new administrative guidance that includes a central record of legislation with transitional qualified status for purposes of the Global Minimum Tax. The record also includes information on whether the domestic top-up tax of a jurisdiction meets the conditions of the safe harbour rule on the dometic top-up tax. The Finnish income inclusion rule and domestic top-up tax have been considered to meet the criteria, also as regards the safe harbour rule on dometic top-up tax.
- Global Anti-Base Erosion Model Rules (Pillar Two) | OECD
OECD has released a new version of the international standard regarding the content of the information return on top-up tax, GloBE Information Return (January 2025), and an XML schema that will be used in the reporting of information and in the exchange of information between authorities.
- Tax Challenges Arising from the Digitalisation of the Economy – GloBE Information Return (January 2025) | OECD
- GloBE Information Return (Pillar Two) XML Schema | OECD
The OECD has released a new commentary to the Model Rules: International tax reform: OECD/G20 Inclusive Framework on BEPS taking further steps on the implementation of the Two-Pillar Solution - OECD
The newly published Consolidated Commentary to the Global Anti-Base Erosion Model Rules incorporates all guidance released up until December 2023.
The act on the minimum tax rate for large-scale corporate groups (Laki suurten konsernien vähimmäisverosta 1308/2023) entered into force on 1 January 2024, and it is applied to accounting periods beginning on or after 31 December 2023.
If you have any questions, please send email to: Minimivero(a)vero.fi

General information about Pillar Two

Starting from tax year 2024, large-scale corporate groups’ excess profit is subject to a minimum tax rate of 15%, regardless of the constituent entities’ country of location. The effective tax level is considered country by country. If the effective tax rate in a country where a constituent entity is located is less than 15%, the minimum tax rate is achieved by imposing an additional amount of tax, i.e. a top-up tax. The top-up tax is imposed as a Qualified Domestic Minimum Top-up Tax (QDMTT) of a low-taxed country, or it is imposed based on the Income Inclusion rule (IIR) of the parent entity’s country or the Undertaxed Profits rule (UTPR) of countries where other constituent entities are located.

Filing

All the information needed for calculating the group's top-up tax is filed in an information return on top-up tax.
Information on a foreign filer is filed in a notification regarding the filer of the information return on top-up tax.
Information needed for the collection of a top-up tax or domestic top-up tax in Finland is filed in a top-up tax return.
The returns for tax year 2024 must be filed by 30 June 2026.

Detailed guidance

The Tax Administration’s detailed guidance documents will be published as soon as they are completed.

Topics discussed in the guidance documents:

Minimum tax rate system applied to large-scale groups (overall view)
Group identification, and allocation of profit to constituent entities
Calculation of the qualifying income or loss
Calculation of adjusted covered taxes
Calculation of effective tax rate and top-up tax
Tax rule application, and allocation of top-up tax
Special circumstances regarding permanent establishments
Safe harbour rules
Filing and tax assessment procedure in Finland