Pillar Two ― overview of the UK’s multinational top-up tax

Produced by a Tolley Corporation Tax expert

Corporation Tax

Guidance

Finance Act 2024 amends certain aspects of the multinational top-up tax and domestic top-up tax rules contained in Finance (No 2) Act 2023. The amendments have retrospective effect for accounting periods beginning on or after 31 December 2023. The original draft legislation for Finance Bill 2024 contained provisions implementing the Under Taxed Profits Rule (UTPR) which is due to have effect for accounting periods beginning on or after 31 December 2024 at the earliest. However, it was confirmed at Autumn Statement 2023 that this will be introduced in a later Finance Bill, even though the effective date will remain the same. The Government will abolish the ‘offshore receipts in respect of intangible property’ (ORIP) rules for income arising from 31 December 2024 alongside the introduction of the UTPR.

Origins of the Pillar Two multinational top-up tax

In October 2021, over 135 jurisdictions signed up to a ‘two-pillar’ solution to reform the international taxation rules. The main aim is to ensure that large multinational enterprises (MNEs) pay a fair share of tax, no

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