The UK tax authority, His Majesty’s Revenue and Customs (HMRC), has released the Explanatory Notes outlining the government amendments, which focus on matters related to Pillar Two, to the Finance Bill 2024-25 on 19 December 2024.
The Explanatory Notes outline the amendments introduced in the Finance (No. 2) Act 2023, which establish the multinational top-up tax (MTT) and the domestic top-up tax (DTT).
The amendments to Schedule 4 include two parts: Part 2 introduces the “undertaxed profits rule” (UTPR) into UK law, while Part 3 updates the MTT and DTT legislation in the Finance (No. 2) Act 2023.
The amendments are made in Schedule 4 with two parts: Part 2 and Part 3.
Part 2 of the Schedule introduces the “undertaxed profits rule” (UTPR) into UK legislation. Part 3 of the Schedule makes other amendments to the MTT and DTT legislation in Finance (No. 2) Act 2023.
The legislation introduced in Part 2 of Schedule 4, implementing the UTPR, will take effect for accounting periods beginning on or after 31 December 2024.
Earlier, the HMRC released guidance on how and when to pay the Pillar Two top-up taxes, including domestic top-up tax and multinational top-up tax, on 20 November 2024.
