Policy paper

Introduction of the new multinational top-up tax and domestic top up tax

In line with the agreement on a two Pillar solution to reform the international tax system, these measures will help to ensure large groups operating within the UK pay a global minimum level of tax.

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Details

The multinational top-up tax will introduce a new tax on UK parent members within a multinational enterprise group.

A tax will be charged where a UK parent member has an interest in entities located in a non-UK jurisdiction, and the group’s profits arising in that jurisdiction are taxed at below the minimum rate of 15%.

The charge is a top-up tax; the amount brought into charge is that required to achieve a 15% minimum rate. No additional tax will arise in respect of jurisdictions where the group’s profits are taxed at 15% or more.

The domestic top-up tax will introduce a new tax on UK members within a domestic or multinational enterprise group. A top-up tax will be charged when the group’s profits arising in the UK are taxed at below the minimum rate of 15%.

These measures are in accordance with the agreement to reform the international tax framework made by the G20/OECD Inclusive Framework on Base Erosion and Profit Shifting (BEPS) on 8 October 2021.

Updates to this page

Published 15 March 2023

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