Legislation – Finance (No. 2) Act 2023

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Part 3Multinational top-up tax

Chapter 9Special provision for investment entities, joint venture groups and minority-owned members

Joint venture group

226Joint venture group

(1)

For the purposes of this Part “joint venture group” means a joint venture parent of a qualifying multinational group and its joint venture subsidiaries (together its “members”).

(2)

An entity is a joint venture parent of a multinational group F1for an accounting period of that entity if—

(a)

the financial results of that entity F2for all or any part of that period are reported under the equity method in the consolidated financial statements of the ultimate parent of that group,

(b)

the ultimate parent holds at least 50% of the ownership interests in the entity F3at any time in that period,

(c)

the entity is not the ultimate parent of a F4multinational group that meets condition A in section 129(2) for that accounting period (revenue threshold exceeded in at least 2 of previous 4 accounting periods),

(d)

the entity is not an excluded entity,

(e)

the entity is not an entity owned by an excluded entity—

(i)

that only carries out activities that are ancillary to the activities of the excluded entity,

(ii)

whose activities consist, wholly or almost wholly, of the holding of assets or the investment of funds for the benefit of the excluded entity, or

(iii)

whose income is, wholly or almost wholly, excluded dividends or excluded equity gains (or a mixture of both),

(f)

the multinational group F5referred to in paragraph (a) is not composed exclusively of excluded entities, and

(g)

the entity is not a joint venture subsidiary in relation to another joint venture parent.

(3)

An entity is a joint venture subsidiary of a joint venture parent if its assets liabilities, income, expenses and cash flows are included in the consolidated financial statements of the joint venture parent.

(4)

Where the main entity of a permanent establishment is a joint venture parent of a multinational group or a joint venture subsidiary, that permanent establishment is to be treated as a separate joint venture subsidiary of the same multinational group joint venture group.

227Application of Part to joint venture groups

(1)

This Part applies to a joint venture group as it applies to a multinational group, but F6in their application by virtue of this subsection Chapters 3 to 6 and 8 of this Part F7, this Chapter other than this section and section 226 and F8Schedules 16 and 16A F9have effect as if—

(a)

references to the ultimate parent were to the joint venture parent of that group,

(b)

references to a member of a multinational group were to the members of the joint venture group, and.

(c)

references to the filing member were to the filing member of F10each respective multinational group whose ultimate parent holds at least 50% of the ownership interests in the joint venture parent.

(2)

For the purposes of the other provisions of this F11Part (in its application by virtue of subsection (1)), the members of the joint venture group are treated as members of F12each multinational group whose ultimate parent directly or indirectly holds at least 50% of the ownership interests in the joint venture parent.

(3)

But F13(in the application of this Part by virtue of subsection (1)) no member of the joint venture group is to be regarded as an intermediate parent member or a partially owned parent member of F14the joint venture group.