Legislation – Finance (No. 2) Act 2023
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Schedule 16Multinational top-up tax: transitional provision
Part 1General transitional measures
Transitional relief for substance-based income exclusion
1
(1)
Section 195(4) (payroll carve-out amount) has effect for an accounting period that commences in a year listed in following table as if for “5%” there were substituted the specified percentage for that year—
|
Year |
Specified percentage |
|---|---|
|
2023 |
10% |
|
2024 |
9.8% |
|
2025 |
9.6% |
|
2026 |
9.4% |
|
2027 |
9.2% |
|
2028 |
9.0% |
|
2029 |
8.2% |
|
2030 |
7.4% |
|
2031 |
6.6% |
|
2032 |
5.8% |
(2)
Section 195(5) (tangible asset carve-out amount) has effect for an accounting period that commences in a year listed in following table as if for “5%” there were substituted the specified percentage for that year—
|
Year |
Specified percentage |
|---|---|
|
2023 |
8% |
|
2024 |
7.8% |
|
2025 |
7.6% |
|
2026 |
7.4% |
|
2027 |
7.2% |
|
2028 |
7.0% |
|
2029 |
6.6% |
|
2030 |
6.2% |
|
2031 |
5.8% |
|
2032 |
5.4% |
Intra-group transfers before entry into regime
2
(1)
Sub-paragraph (3) applies where—
(a)
assets are transferred from one member of a multinational group to another member of that group,
F1(b)
the Pillar Two rules do not apply to the transferor for the accounting period in which the transfer takes place (but in determining this, section 255(4) has effect as if sub-paragraph (ii) of paragraph (b) were omitted),
(ba)
a qualifying domestic top-up tax does not apply in relation to the transferor for that period, and
(c)
the transfer took place on or after 1 December 2021.
(2)
But sub-paragraph (3) does not apply in relation to a transfer of assets manufactured, or of a class or description sold, in the course of carrying on a trade by the transferor or the transferee.
(3)
Where this sub-paragraph applies, for the purposes of Part 3 of this Act—
(a)
the value of the assets at the relevant time is the carrying value of the assets in the hands of the transferor immediately before the transfer, and
(b)
any deferred tax asset that would arise in relation to the assets in the underlying profits of the transferee is limited to F2the lesser of the cap amount and the sum of—
(i)
the value of deferred tax assets that arose in relation to the assets before their transfer, and
(ii)
the tax paid amount in relation to the transfer of assets.
F3(3A)
For the purposes of determining the value of a deferred tax asset under sub-paragraph (3)(b)(i)—
(a)
if the rate of tax in relation to that asset is greater than 15%, the value is to be adjusted so that it reflects the value it would be if the rate had been 15%, and
(b)
exclude the impact of any valuation adjustments or accounting recognition adjustments.
(4)
For the purposes of this paragraph “the relevant time” means the later of—
(a)
the date of the transfer, and
(5)
Where the relevant time is after the date of the transfer—
(a)
the value of the assets at the relevant time is to be adjusted to reflect—
(i)
capitalised expenditure incurred in respect of the assets in the period between the date of the transfer and the relevant time, and
(ii)
amortisation and depreciation of the assets that, had the transfer not occurred, would have been recognised by the transferor if the transferor had continued to use the accounting policies and rates for amortisation and depreciation of the assets previously used, and
(b)
the tax paid amount in relation to the transfer of the assets F6, and the value of deferred tax assets that arose in relation to the assets before their transfer, are to be adjusted to reflect the matters referred to in paragraph (a)(i) and (ii).
(6)
To determine the “tax paid amount” in relation to a transfer of assets take the following steps—
-
Step 1
Determine the amount of the tax expense of the transferor in relation to the transfer of the assets that relates to covered taxes.
-
Step 2
Determine the amount, if any, of qualifying current tax expense relating to the transfer of the assets that would have been allocated to the transferor as a result of section 177 or 179 (permanent establishments and controlled foreign company regimes) if—
- (a)
F7the ultimate parent had been located in the United Kingdom and the accounting period commenced on or after 31 December 2023, and
- (b)
section 179(2) (restriction of allocation of mobile income) were ignored.
- (a)
-
Step 3
Add together the amounts determined under Steps 1 and 2.
F8(7)
In determining the tax expense of the transferor in relation to the transfer of the assets—
(a)
where any loss arising in the accounting period in which the transfer took place is offset against any taxable gain arising on the transfer, ignore that offsetting, and
(b)
exclude the impact of any valuation adjustments or accounting recognition adjustments.
(8)
The “cap amount” in relation to a transfer of assets is the amount given by—
(a)
dividing—
(i)
the amount of tax expense determined under Step 1 in sub-paragraph (6), by
(ii)
the nominal rate of tax to which that expense relates, and
(b)
multiplying the result of paragraph (a) by 15%.
(9)
Where F9the sum of the tax paid amount F10and the value of deferred tax assets that arose in relation to the assets before their transfer is greater than the cap amount F11…, the filing member may elect that sub-paragraph (3) does not apply in relation to the transfer of assets.
(10)
Paragraph 2 of Schedule 15 (annual elections) applies to an election under sub-paragraph (9).
(11)
For the purposes of this paragraph,
F12(a)
“a transfer of assets” includes a transaction that relates to assets that does not result in a change in their ownership if the transaction has F13a similar effect for accounting purposes to a change in ownership of those assets;
F14(b)
a qualifying domestic top-up tax is not to be taken as applying to a member of a multinational group if provision for a QDMTT Safe Harbour (within the meaning of the Pillar Two rules) applies to it.
F15(12)
Where assets are transferred from one member of a multinational group to another member of that group as a result of a series of transfers that—
(a)
fall within sub-paragraph (1), but
(b)
do not fall within sub-paragraph (2),
that series is to be treated as a single transfer of assets that falls within sub-paragraph (1).
(13)
This paragraph applies to that single transfer as if—
(a)
the reference to the transferor in sub-paragraph (3)(a) were to the transferor in relation to the first transfer in the series,
(b)
the references in sub-paragraph (3)(b) to the cap amount, the value of deferred tax assets that arose in relation to the assets before their transfer and the tax paid amount were to the aggregate of each such amount or value as determined for the purpose of each transfer that makes up the series,
(c)
the reference to the date of the transfer in sub-paragraph (4)(a) were to the date of the last transfer in the series, and
(d)
the references to the transferee in sub-paragraph (4)(b) were to the transferee in relation to the last transfer in the series.
Part 2Transitional safe harbour
Chapter 1F16General transitional safe harbour election
Election
3
F17(1)
The filing member of a multinational group may make a transitional safe harbour election F18under this paragraph for an accounting period in respect of a territory.
(1A)
The effect of the election is that all of the standard members of the group located in the territory are to be treated as not having top-up amounts or additional top-up amounts for the purpose of determining the liability of any member of the group to multinational top-up tax.
(2)
An election may only be made for an accounting period if—
(a)
the period commences on or before 31 December 2026 and ends on or before 30 June 2028,
(b)
a qualifying country-by-country report has been prepared in relation to the territory for the period,
(c)
F19a transitional safe harbour election has been made in respect of the territory for each preceding accounting period—
(i)
that commenced on or after 31 December 2023, and
(ii)
in which the Pillar Two rules F20would, ignoring any transitional safe harbour election, have applied to any member of the group in the territory,
(d)
an election under section 189 (deemed distribution tax election) has not been made in respect of the territory for the accounting period, and
(e)
at least one of the following tests are met for the territory in accounting period—
(i)
the threshold test (see paragraph 7),
(ii)
the simplified effective tax rate test (see paragraph 8), or
(iii)
the routine profits test (see paragraph 9).
(3)
An election may not be made in respect of the territory of the ultimate parent of a multinational group for an accounting period if the ultimate parent is a flow-through entity unless, were the adjusted profits of the ultimate parent determined for that period in accordance with Part 3—
(a)
its adjusted profits would be nil as a result of the application of section 170 (adjustments for ultimate parent that is a flow-through entity), or
(b)
all of the ultimate parent’s adjusted profits would be attributable to one or more permanent establishments (see section 159) and no amount of income or expense of any permanent establishment would be treated, as a result of section 160 (attribution of losses between permanent establishment and main entity), as income or expense of the ultimate parent.
F21(4)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(5)
Paragraph 2 of Schedule 15 (annual elections) applies to an election under this paragraph.
(6)
The information return in which the election is made must set out which of the tests referred to in sub-paragraph (2)(e) are being relied on and include evidence of how any that is relied on is met.
F22(7)
For the purposes of this Part of this Schedule, a country-by-country report in relation to a territory is “qualifying” if F23all relevant information relating to the territory is prepared on the basis of qualified financial statements of the multinational group (see paragraph 4).
F24(7A)
For the purposes of sub-paragraph (7), “all relevant information” means all of the information described in paragraphs (a) to (d) of paragraph 4(3).
(8)
Where there is no requirement under the law of any territory for a country-by-country report to be prepared and filed in respect of a multinational group, the filling member may include, in the information return in which the election is made, the information that would have been in such a report—
(a)
prepared in accordance with legislation implementing the OECD’s guidance on country-by-country reporting under the law of the territory of the ultimate parent, or
(b)
where there is no such legislation, prepared in accordance with that guidance.
(9)
Where such information has been included in that information return, that information is to be treated as if it were a country-by-country report in relation to the territory for the purposes of this Chapter (and where that information complies with sub-paragraph (7), the condition in sub-paragraph (2)(b) is to be treated as met).
F25(10)
An election under this paragraph may not be made in respect of the nominal territory of a stateless member of a multinational group.
Qualified financial statements and basis of calculations
4
(1)
For the purposes of this Part of this Schedule “qualified financial statements” of a multinational group means—
(a)
F28(b)
financial statements of members of the group provided—
(i)
they are prepared in accordance with acceptable accounting standards or an authorised accounting standard, and
(ii)
the information contained in those statements is reliable and is maintained in a manner that is consistent with its use under the accounting standard used in preparing those statements.
F29(1A)
But see also paragraph 4A in cases where those accounts or statements reflect purchase price accounting adjustments.
(2)
Where a member of a multinational group is not included in consolidated financial statements of any member of the group on a line-by-line basis solely due to size or materiality grounds, the financial accounts of that member that are used for preparation of the group’s country-by-country report are to be regarded as forming part of the qualified financial statements of the group.
(3)
For the purposes of establishing whether the tests in paragraphs 7 to 9 are met in relation to members of a multinational group in a territory, the basis for that determination is to be the information derived from qualified financial statements as to—
(a)
revenue,
(b)
profit (loss) before income tax, F30…
(c)
qualifying income tax expense (see paragraph 5) F31, and
(d)
qualified substance based income F32exclusion amount (see paragraph 9(2)).
(4)
Information derived from qualified financial statements as to revenue or profit (loss) before income tax must be adjusted—
(a)
as the information was adjusted for the purposes of its inclusion in a qualifying country-by-country report in relation to the territory, or
(b)
if the information was not included in such a report, as it would have been adjusted had it been included in such a report.
See also F33paragraphs 6 to 6B which provides for circumstances in which further adjustments are required to profit (loss) before income tax and circumstances in which adjustments are required to qualifying income tax expense.
(5)
The information described in sub-paragraph (3)(a) to F34(d) that must be used to determine whether the tests in paragraphs 7 to 9 are met in relation to members of a multinational group in a territory must be derived from whichever of the following was used to prepare the qualifying country-by-country report in relation to the territory—
(a)
qualified financial statements falling within sub-paragraph (1)(a), along with any financial accounts treated as qualified financial statements as a result of sub-paragraph (2), or
(b)
qualified financial statements falling within sub-paragraph (1)(b), along with any financial accounts treated as qualified financial statements as a result of sub-paragraph (2).
(6)
Where that information in respect of a territory is not available in qualified financial statements of a multinational group, no election may be made in respect of that territory.
F35Accounts or statements reflecting purchase price accounting adjustments
4A
(1)
This paragraph applies in relation to accounts or financial statements (“the relevant statements”) in relation to a multinational group in a territory that—
(a)
fall within paragraph (a) or (b) of paragraph 4(1), and
(b)
reflect purchase price accounting adjustments.
(2)
If—
(a)
a country-by-country report has been submitted in respect of the group in that territory in respect of a period commencing on or after 1 January 2023 and concluding before the commencement of the accounting period for which the transitional safe harbour election is being made,
(b)
the financial accounts used for the preparation of that report did not reflect purchase price accounting adjustments, and
(c)
there is no requirement to reflect purchase price adjustments in the relevant statements under the law of the territory that applies in relation to the preparation of those statements,
the relevant statements are not qualified financial statements.
(3)
Sub-paragraph (4) applies if—
(a)
the relevant statements are qualified financial statements, and
(b)
an impairment of goodwill in relation to a transaction entered into on or after 1 December 2021 is reflected in a member’s profit (loss) before income tax.
(4)
Adjust the profit (loss) before income tax of the member so that it does not reflect that impairment for the purposes of determining—
(a)
in a case where the condition in sub-paragraph (5) is not met, whether the simplified effective tax rate test is met (see paragraph 8), and
(b)
in any case, whether the routine profits test is met (see paragraph 9).
(5)
The condition in this sub-paragraph is that the relevant statements reflect—
(a)
a reversal of deferred tax liability in relation to the goodwill, or
(b)
the recognition or increase of a deferred tax asset in relation to it.
Qualifying income tax expense
5
F36(1)
In this Part of this Schedule, “qualifying income tax expense” means income tax expense adjusted to exclude—
(a)
any amount that does not relate to covered taxes, and
(b)
any amount that relates to an uncertain tax position.
F37(2)
For the purposes of this Part of this Schedule, any amount of qualifying income tax expense that is in respect of profits of a permanent establishment and that is incurred in the territory of the permanent establishment is to be regarded as the expense of that permanent establishment (rather than of the main entity).
Adjustments
6
(1)
Sub-paragraph (2) applies where the adjusted profits of the ultimate parent of a multinational group for an accounting period would be reduced as a result of section 171(1) (ultimate parent subject to deductible dividend regime).
(2)
Where this sub-paragraph applies the profit (loss) before income tax of the ultimate parent for that period is to be reduced (but not below nil) by the amount referred to in section 171(1).
(3)
Sub-paragraph (4) applies where—
(a)
the standard members of a multinational group in a territory have a net unrealised fair value loss for an accounting period, and
(b)
that loss exceeds 50 million euros.
(4)
Where this sub-paragraph applies, those losses are to be excluded from the aggregate profit (loss) before income tax of those members.
(5)
For the purposes of sub-paragraph (3), the standard members of a multinational group in a territory have a net unrealised fair value loss for an accounting period to the extent their losses that arise from changes in fair value of relevant ownership interests exceed gains arising from changes in fair value of relevant ownership interests.
(6)
An ownership interest in an entity is relevant F38unless, at the end of the accounting period, the members of the multinational group do not between them have ownership interests that entitle them to 10% or more of the entity’s —
(a)
profits,
(b)
capital,
(c)
reserves, and
(d)
voting rights.
(7)
Amounts of profits and qualifying tax expense allocated, for the purposes of Part 3, to a member of a multinational group from an investment entity as a result of an election under section 213 (investment entity tax transparency election) are to be reflected (to the extent they are not already) in the member’s profit (loss) before income tax and qualifying tax expense used for the purposes of applying the tests in paragraphs 7 to 9.
(8)
Amounts that are to be included or otherwise taken account of, for the purposes of Part 3, in the adjusted profits and covered tax balance of a member of a multinational group as a result of an election under section 214 (taxable distribution method election) are to be reflected (to the extent they are not already) in the member’s profit (loss) before income tax and qualifying tax expense used for the purposes of applying the tests in paragraphs 7 to 9.
F39Deduction and non-inclusion arrangements and duplicate loss arrangements
6A
(1)
Where the aggregate profit (loss) before income tax of the standard members of a multinational group in a territory reflects disqualified expense, the aggregate profit (loss) before income tax is to be adjusted to exclude it.
(2)
Disqualified expense means any expense or loss of a member of a multinational group reflected in the financial statements of the member arising as a result of qualifying arrangements that involve another member of the group—
(a)
to the extent that the expense or loss is a result of the member directly or indirectly being provided credit by the other member or the other member otherwise making an investment in the member under the arrangements and—
(i)
the credit or investment is not reflected as an increase in the revenue, or a gain, in the financial statements of the other member that corresponds to the expense or loss, or
(ii)
it is not reasonable to expect that the credit or investment will be reflected as an increase in the taxable income of the other member over the life of the arrangements that corresponds to the expense or loss, or
(b)
to the extent that—
(i)
the expense or loss is also included as an expense or loss in the financial statements of another member of the group, or
(ii)
the expense or loss is mirrored by an amount that can be deducted from the taxable income of another member of the group that is located in a different territory to the member.
(3)
But—
(a)
an expense or a loss is not disqualified expense as a result of sub-paragraph (2)(a) if it is solely referable to the provision of qualifying tier one capital,
(b)
an expense or loss is not disqualified expense as a result of sub-paragraph (2)(b)(i) to the extent it is offset against revenue that is included in the financial statements of each member whose financial statements reflect the expense or loss, and
(c)
an expense or loss is not disqualified expense as a result of sub-paragraph (2)(b)(ii) to the extent that it is offset against revenue or income that is included in both—
(i)
the financial statements that reflect the expense or loss, and
(ii)
the taxable income from which the amount that mirrors the expense or loss can be deducted.
(4)
An expense or loss included in the financial statements of a member of a multinational group is to be ignored to the extent that the expense or loss is included in the financial statements of another member of the group as a result of—
(a)
the other member having a direct or indirect ownership interest in the member, and
(b)
the member being regarded as tax transparent in the territory in which the other member is located.
(5)
Where as a result of sub-paragraph (2)(b)(i) more than one standard member in a territory has disqualified expense in respect of the same expense or loss, sub-paragraph (1) applies to all but one of those amounts of disqualified expense.
(6)
For the purposes of sub-paragraph (2)(a)(ii), ignore any increase in the taxable income of the other member—
(a)
that is offset by a devalued tax attribute, or
(b)
where—
(i)
the payment that gives rise to the expense or loss in question also results in a taxable deduction or loss of a further member of the group located in the same territory as the other member, and
(ii)
that deduction or loss is not reflected in the aggregate profit (loss) before income tax for that territory for the purposes of determining whether an election under paragraph 3 that applies in relation to that further member can be made.
(7)
For the purposes of sub-paragraph (6)(a), a “devalued tax attribute” means a tax attribute of a member of a multinational group—
(a)
whose value is reflected in financial statements of the member at less than the amount of the attribute multiplied by the tax rate that applies to the member, or
(b)
whose value would be so reflected if the qualifying arrangements that result in disqualified expense or disqualified tax expense (see paragraph 6B) were ignored.
(8)
For the purposes of this paragraph and paragraph 6B, arrangements are “qualifying” if—
(a)
they were entered into on or after 16 December 2022, or
(b)
they were entered into before that date, but—
(i)
the arrangements are amended on or after that date (including by way of a substitution of one or more of the parties),
(ii)
the performance of rights or obligations under the arrangements is altered on or after that date (for example where payments under the arrangements are reduced or ceased), or
(iii)
the accounting treatment of the arrangements is varied on or after that date.
(9)
In this paragraph and in paragraph 6B reference to the financial statements of a member of a multinational group is—
(a)
in relation to an accounting period in which an election under paragraph 3 that applies in relation to the member was made, or for the purposes of determining whether such an election can be made, to the financial statements, or financial accounts, that form the basis of qualified financial statements in relation to the member for the purposes of this Part of this Schedule, or
(b)
otherwise, to the underlying profits accounts of that member (see section 136).
Duplicate tax recognition arrangements
6B
(1)
Where the aggregate qualifying income tax expense of the standard members of a multinational group in a territory reflects disqualified tax expense, the aggregate qualifying income tax expense is to be adjusted to exclude it.
(2)
Disqualified tax expense means any qualifying income tax expense of a member of a multinational group reflected in the financial statements of the member that, as a result of qualifying arrangements, is also reflected in—
(a)
the covered tax balance of one or more other members of the group, or
(b)
the qualifying income tax expense of one or more other members of the group.
(3)
But qualifying income tax expense is not to be regarded as disqualified tax expense—
(a)
if the income to which the tax expense relates is reflected in the financial statements of each member of the group falling within sub-paragraph (2)(a) and (b) to at least the same extent to which the tax expense is reflected in the covered tax balance, or qualifying income tax expense, of each of those members;
(b)
to the extent that the duplication of the tax expense would not arise if the adjustments that would have been made in determining the member’s covered tax balance (and that are not required to be made for the purpose of determining the member’s qualifying income tax expense) had been made.
Threshold test
7
(1)
The threshold test is met for a territory in an accounting period if—
(a)
the revenue of the standard members in that territory for the period is less than 10 million euros, and
(b)
the aggregate profit (loss) before income tax of those members for that period is less than 1 million euros.
(2)
Where those members include members that are held for sale and the revenue of those members is not otherwise included in the amount determined for the purposes of sub-paragraph (1)(a), that revenue is to be so included.
Simplified effective tax rate test
8
(1)
The simplified effective tax rate test is met for a territory in an accounting period if the simplified effective tax rate of the standard members of the group in that territory is—
(a)
in the case of an accounting period beginning before 1 January 2025, at least 15%,
(b)
in the case of an accounting period beginning in 2025, at least 16%, or
(c)
in the case of an accounting period beginning on or after 1 January 2026, at least 17%.
(2)
The simplified effective tax rate of the standard members of a multinational group in a territory in an accounting period is the amount (expressed as a percentage) given by dividing—
(a)
the aggregate qualifying income tax expense of those members for that period, by
(b)
the aggregate profit (loss) before income tax of those members for that period.
Routine profits test
9
(1)
The routine profits test is met for a territory in an accounting period if—
(a)
the qualified substance based income exclusion amount for that territory for that period is equal to or greater than the aggregate profit (loss) before income tax for that period of the standard members of the group located in that territory, or
(b)
the aggregate profit (loss) before income tax of those members for that period is nil or reflects an overall loss.
(2)
The “qualified substance based income exclusion amount” for a territory for an accounting period is the substance based exclusion determined for the territory for the period in accordance with section 195 (and see also paragraph 1 of this Schedule) ignoring any payroll carve-out amount or tangible asset carve-out amount of any standard member of the group in that territory—
(a)
that is not regarded as a constituent entity of the multinational group for the purposes of the group’s country-by-country report, or
(b)
that is not regarded as located in the territory for the purposes of that report.
Chapter 2Application F40of Chapter 1 to joint ventures etc
Application in the case of joint venture group
10
F41(1)
For the purpose of applying Chapter 1 of this Part of this Schedule to a joint venture group (see F42section 227 which applies this Schedule generally, with modifications, to joint venture groups) F43, that Chapter has effect as if—
(a)
paragraph F443(2)(b) were omitted (requirement for qualifying country-by-country report),
(b)
the reference in paragraph 4(2) to “the financial accounts of that member that are used for preparation of the group’s country-by-country report” were to the financial accounts that would be used if a qualifying country-by-country report had been prepared in respect of the joint venture group, and
(c)
in paragraph 9(2), the words from “ignoring” to the end were omitted.
F45(2)
For that purpose ignore section 227(1)(a) (reference to ultimate parent treated as reference to joint venture parent).
(3)
Accordingly, the filing member of a multinational group may make a separate transitional safe harbour election in respect of joint venture members of a joint venture group in a territory.
Application to investment entities in same territory as owners
11
(1)
Subsection (2) applies where—
(a)
an investment entity that is a member of a multinational group, and
(b)
all of the members of a multinational group with direct ownership interests in it,
are located in the same territory.
(2)
The investment entity is to be treated as a standard member of that group for the purposes of this Part of this Schedule.
Minority owned members
12
For the purposes of this Part of this Schedule, references to the standard members of a multinational group include minority owned members.
F46Part 2AUTPR transitional safe harbour election
Election
12A
(1)
The filing member of a multinational group may elect for an accounting period that in the territory of the ultimate parent—
(a)
no member of the group located in the territory has an untaxed amount relating to that period, and
(b)
no joint venture group whose joint venture parent is located in the territory has an untaxed amount in relation to the multinational group relating to that period.
(2)
An election may only be made for an accounting period if—
(a)
the minimum corporate tax rate for the territory of the ultimate parent is equal to, or in excess of, 20%, and
(b)
the accounting period—
(i)
commenced on or before 31 December 2025 and ends before 31 December 2026, and
(ii)
is not longer than 12 months.
(3)
The “minimum corporate tax rate” for a territory means—
(a)
in the case of a territory in which corporate income tax may be imposed by subdivisions of that territory as well as by a national authority, the sum of—
(i)
the nominal national rate that generally applies, and
(ii)
the lowest nominal rate that generally applies that is imposed by a subdivision of that territory (and where one or more subdivisions do not impose corporate income tax, that rate will be zero), or
(b)
otherwise, the nominal rate that generally applies.
F47Part 3Transitional reporting election
Transitional reporting election
13
(1)
HMRC may publish a notice that provides for alternative requirements for the information that must be contained in an information return in respect of members of a multinational group to which an election under sub-paragraph (3) applies.
(2)
Where—
(a)
HMRC have published a notice under paragraph (1) containing alternative requirements, and
(b)
an election under sub-paragraph (3) applies to members of a multinational group for an accounting period,
paragraph 10 of Schedule 14 applies to the filing member of the group for that period subject to the notice.
(3)
An election under this sub-paragraph—
(a)
is to be made in respect of all of the members of a multinational group in a territory,
(b)
is to be made by the filing member of the group,
(c)
may only have effect in relation to an accounting period that begins on or before 31 December 2028 and ends before 1 July 2030, and
(d)
may only be made if condition A, B or C is met.
(4)
Condition A is that none of the members in the territory have top-up amounts or additional top-up amounts for the accounting period to which the election is to apply.
(5)
Condition B is that—
(a)
there is only one responsible member responsible for all of the members in the territory for the accounting period to which the election is to apply, and
(b)
the sum of amounts attributed under Chapter 7 of Part 3 to that responsible member for that period in respect of those members’ top-up amounts and additional top-up amounts is equal to the sum of the members’ top-up amount and additional top-up amounts.
(6)
Condition C is that—
(a)
there is more than one responsible member responsible for the members of the group in the territory for the accounting period to which the election is to apply, and
(b)
each responsible member is responsible for every member of the group in the territory and has the same inclusion ratio for each member it is responsible for.
(7)
Paragraph 2 of Schedule 15 (annual elections) applies to an election under this paragraph.