Global Daily Tax News, Finland Progresses Pillar Two Law Amendments, (Mar 9, 2026)

Finland is set to table in parliament legislative amendments to the nation's legislation governing multinational minimum top-up taxes to take into account the agreement among members of the BEPS Inclusive Framework on adaptions to the international P ...

The Government is targeting entry into force of the amendments by March 31, 2026. They would apply to financial periods beginning on or after January 1, 2026.

The so-called side-by-side arrangement notably includes an exemption for US-based multinational groups under Pillar Two. The deal provides that, despite the US not introducing a Pillar Two framework providing for the imposition of 15 percent tax on profits in each jurisdiction, other countries will cede the right to apply top-up tax on profits liable to US tax. Instead, the G7 said US parented groups will be exempt from the Income Inclusion Rule and the Undertaxed Profits Rule in recognition of the existing US minimum tax rules to which they are subject.

On January 5, 2026, BEPS Inclusive Framework members agreed on the future functioning of Pillar Two, including five innovations:

First, a series of simplification measures will reduce compliance burdens for multinational enterprises (MNEs) and tax authorities in calculating and reporting under the global minimum tax rules;
Second, the package further aligns the treatment of tax incentives globally through the introduction of a new "targeted substance-based tax incentive safe harbour";
Third, new safe harbors will be available to MNE Groups having an ultimate parent entity located in an eligible jurisdiction which meets minimum taxation requirements;
Fourth, the package includes an evidence-based stocktake process to ensure a level playing field is maintained for all Inclusive Framework members;
Fifth, the package reinforces the objective that qualified domestic minimum top-up tax regimes remain a primary mechanism in the global minimum tax framework for ensuring the protection of local tax bases, particularly in developing countries.

The legislative amendments proposed in Finland would also extend by one year the transitional country-by-country reporting safe harbor under Pillar Two.

The draft legislation has cleared the first hurdle towards enactment, having been approved by the Finance Committee on March 3, 2026. The legislation will now be forwarded for lawmakers' approval.

Global Daily Tax News, Finland Progresses Pillar Two Law Amendments, (Mar 9, 2026)

The Government is targeting entry into force of the amendments by March 31, 2026. They would apply to financial periods beginning on or after January 1, 2026.

On January 5, 2026, BEPS Inclusive Framework members agreed on the future functioning of Pillar Two, including five innovations:

First, a series of simplification measures will reduce compliance burdens for multinational enterprises (MNEs) and tax authorities in calculating and reporting under the global minimum tax rules;
Second, the package further aligns the treatment of tax incentives globally through the introduction of a new "targeted substance-based tax incentive safe harbour";
Third, new safe harbors will be available to MNE Groups having an ultimate parent entity located in an eligible jurisdiction which meets minimum taxation requirements;
Fourth, the package includes an evidence-based stocktake process to ensure a level playing field is maintained for all Inclusive Framework members;
Fifth, the package reinforces the objective that qualified domestic minimum top-up tax regimes remain a primary mechanism in the global minimum tax framework for ensuring the protection of local tax bases, particularly in developing countries.

The legislative amendments proposed in Finland would also extend by one year the transitional country-by-country reporting safe harbor under Pillar Two.

The draft legislation has cleared the first hurdle towards enactment, having been approved by the Finance Committee on March 3, 2026. The legislation will now be forwarded for lawmakers' approval.