On November 7, 2024, the Finance Bill 2024-2025 was introduced to Parliament. This includes provisions to enact the UTPR (and associated rules such as the Transitional UTPR Safe Harbour and Initial Phase of International Activity Exemption), and other Pillar 2 amendments, including elements of the December 2023 and June 2024 OECD Administrative Guidance.

In this article we look at the key Pillar 2 aspects of the Finance Bill including:

-UTPR Allocation Election and other UTPR aspects

-PEs as Excluded Entity’s

-Aspects of the December 2023 OECD Administrative Guidance Included

-Aspects of the June 2024 OECD Administrative Guidance Included

–Blended CFC Rules and the Transitional CbCR Safe Harbour

-The Amended QDMTT Allocation Mechanism

-Asset Holding Companies

-Removal of the Election not to apply the Substance Based Income Exclusion

-Provisions enabling territories to be recognised as Pillar Two territories for the purposes of a qualifying IIR, for a DMT to be a QDMTT and for a QDMTT to have qualifying status for the QDMTT Safe Harbour

-Commencement Dates