UK government has published partial draft technical guidance setting out additional information on administration, chargeability, and scope for multinational top-up tax and domestic top-up tax legislation.
These measures constitute the UK’s adoption of a qualifying Income Inclusion Rule and a Qualifying Domestic Minimum Top-up Tax (part of the Pillar 2 or GloBE rules).
Multinational top-up tax is a new tax on multinational enterprise groups with annual revenue of €750m or more. A top-up tax will be charged on UK parent members when a subsidiary is located in a non-UK jurisdiction, and the group’s profits arising in that jurisdiction are taxed at a rate below the minimum effective tax rate of 15%.
Domestic top-up tax applies the rules of multinational top-up tax to the UK operations of groups and certain entities, to ensure that UK entities will be taxed at the minimum rate.
The guidance provides additional information on which groups will be in scope, and on how the taxes will be administered and charged.
Comments must be received by September 12.