On 15 June 2023, the HMRC has published partial draft guidance on multinational top-up tax and domestic top-up tax, following their introduction in the Spring 2023 Finance Bill.
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 the United Kingdom (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.
This guidance provides additional information on which groups will be in scope, and on how the taxes will be administered and charged.
HMRC invites comments from stakeholders on this draft guidance.
