UK Issues First Tranche of Draft Guidance on Global Minimum Tax

  1. General
  2. Legislation
  3. Differences between the domestic top-up tax and the multinational top-up tax
  4. Protected cell companies
  5. Excluded entities & non-group entities
  6. Transitional CbC safe harbour
  7. Timing
  8. Calculation of ownership interest


On June 15, 2023, the UK issued draft guidance on the application of the multinational top-up tax which will apply for accounting periods beginning on or after December 31, 2023. It is subject to a consultation until September 12, 2023.

The draft guidance takes the form of three chapters of the HMRC guidance manual on multinational top-up tax.

The three chapters included in the draft guidance are:

– An introduction (which covers general chargeability).

– Scope (including excluded entities, the revenue threshold test, and the transitional CbCR safe harbour).

 – Administration

The majority of the guidance issued relates to the application of the administrative provisions (registration, filing, payments, record keeping, penalties, appeals etc).

The guidance on scope ties into much of what is stated in the OECD Commentary on the Model Rules. Nevertheless, there is useful clarity on a number of aspects. The draft guidance also specifically compares the treatment under the multinational top up tax (ie the GloBE IIR) and the domestic top-up tax (intended to be a QDMTT).

Further chapters covering many of the calculation aspects of the global minimum tax are to be issued in the future. These will include:

 – Calculating the Effective Tax Rate

 – The adjusted profits

 – The underlying profits

 – Covered Taxes

 – Calculating the top-up charge

 – Particular types of entity, structures, and adjustments

 – Index of terms


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