On Jul. 2, 2025, UK Treasury published The Multinational Top-up Tax (Pillar Two Territories, Qualifying Domestic Top-up Taxes and Accredited Qualifying Domestic Top-up Taxes) (Amendment) Regulations 2025, StIn 2025/783.
The Regulations amend the Multinational Top-up Tax (Pillar Two Territories, Qualifying Domestic Top-up Taxes and Accredited Qualifying Domestic Top-up Taxes) Regulations 2025, Stln 2025/406 (the 2025 Regulations) and come into force on Jul. 24, 2025.
The 2025 Regulations specify territories as pillar two territories, and taxes as qualifying domestic top-up taxes and accredited qualifying domestic top-up taxes.
Regulation 2 amends regulations 2, 3, and 4 of the 2025 Regulations to enable a specification made under 2025 Regulations to have effect on/from date before made.
This amendment is authorized by sections 241(3), 256(4) of, and paragraph 2(1C) of Schedule 16A to, the Finance (No. 2) Act 2023.
On Jul. 18, UK HMRC issued draft rules on multinational top-up tax.
UK HMRC issued policy paper, draft legislation, explanatory note on multinational top-up tax, including UK's adoption of undertaxed profits rule (UTPR), other amendments.
Measure is part of two-pillar solution to reform international tax framework, developed by G20/OECD Inclusive Framework on Base Erosion and Profit Shifting (BEPS) project.
Taxes are UK’s adoption of income inclusion rule and domestic minimum top-up tax rule, as referenced in the Pillar 2 Global Anti-Base Erosion rules (GloBE).
Undertaxed profits rule (UTPR) ensures that any top-up taxes that are not paid under another jurisdiction’s Pillar 2 rules are brought into charge in the UK.
Other amendments ensure UK legislation remains consistent with agreed model rules, commentary and administrative guidance agreed by G20/OECD inclusive framework.
Further amendments may be introduced to reflect subsequent administrative guidance.
Effectiveness
UTPR provisions have effect as appointed by the Treasury in regulations, which will not be before accounting periods beginning on or after Dec. 31, 2023.
Sep. 27, 2023 Update
On Sep. 27, 2023, UK HMRC updated measure to include more amendments, including some affecting domestic top-up tax, to reflect the latest administrative guidance issued by the G20 OECD inclusive framework.
Nov. 2023 Policy Paper
On Nov. 22, 2023, UK HMRC issued tax information and impact note describing the amendments being made to the multinational top-up tax and domestic top-up tax, which were brought in as part of the UK's implementation of Pillar 2.
Follows UK GVT Jul. 2023 issued final version Finance (No. 2) Act 2023, see #179344.
Document dated Nov. 22, 2023, was received on Dec. 11, 2023 due to a fixed feed.
Measure is comprised of amendments identified from stakeholder consultation and necessary to ensure UK legislation remains consistent with administrative guidance to the GloBE rules agreed by the UK and other members of the Inclusive Framework.
Multinational top-up tax and domestic top-up tax were introduced in Finance (No. 2) Act 2023 and will have effect in respect of accounting periods on/after Dec. 31, 2023.
In Dec. 2023, UK HMRC issued consultation on draft top-up tax guide, see #196108.
In May 2024, UK HMRC issued registration notice for Pillar 2 top-up tax, see #212672.
Mar. 2025 Statutory Instrument
On Mar. 31, 2025, UK Treasury issued Multinational top-up tax (pillar two territories, qualifying domestic top-up taxes, accredited qualifying domestic top-up taxes) regs.
Regulations (StIn 2025/406) specify territories as pillar two territories, and taxes as qualifying domestic top-up taxes and accredited qualifying domestic top-up taxes.
Regulations 2, 3, and 4 have effect from a date before these regulations commence.
Authorized by s 241(3), 256(4), para 2(1C), Schedule 16A, Finance (No. 2) Act 2023.
Regulations 2, 3, 4 give effect to Schedules which provide: table in Schedule 1 lists territories specified as Pillar Two territories along with date from which they specified.
Table in Schedule 2 lists the taxes specified as qualifying domestic top-up taxes along with the date from which they are specified as such.
Table in Schedule 3 lists qualifying domestic top-up taxes that are accredited for the purposes of an election in accordance with Schedule 16A, Finance (No. 2) Act 2023.
Along with the date from which they are so accredited.
Regulations 2, 3 and 4 also provide for HMRC Commissioners to specify further territories as Pillar Two territories, and taxes as qualifying domestic top-up taxes and accredited qualifying domestic top-up taxes, by way of notice.
Regulations come into force on Apr. 21, 2025; have effect for accounting periods beginning on or after Dec. 31, 2023.
Apr. 1, 2025 UK HMRC Policy Paper on Regulations
On Apr. 1, 2025, UK HMRC issued a tax information and impact note describing the Multinational top-up tax (Pillar 2 territories, qualifying domestic top-up taxes and accredited qualifying domestic top-up taxes) Regulations 2025 (StIn 2025/406).
The note describes who is likely to be affected by the regulations, i.e. groups with annual global revenues exceeding €750 mn that have business activities in the UK.
Gives general description of regulations, policy objective, background, impacts.
Apr. 4, 2025 Policy Paper Update
On Apr. 4, 2025, UK HMRC updated information relating to date instrument was laid within the policy paper, to complete the details that are provided in the impact note.
Jul. 2025 Statutory Instrument
On Jul. 2, 2025, UK Treasury published The Multinational Top-up Tax (Pillar Two Territories, Qualifying Domestic Top-up Taxes and Accredited Qualifying Domestic Top-up Taxes) (Amendment) Regulations 2025, StIn 2025/783.
The Regulations amend the Multinational Top-up Tax (Pillar Two Territories, Qualifying Domestic Top-up Taxes and Accredited Qualifying Domestic Top-up Taxes) Regulations 2025, Stln 2025/406 (the 2025 Regulations) and come into force on Jul. 24, 2025.
The 2025 Regulations specify territories as pillar two territories, and taxes as qualifying domestic top-up taxes and accredited qualifying domestic top-up taxes.
Regulation 2 amends regulations 2, 3, and 4 of the 2025 Regulations to enable a specification made under 2025 Regulations to have effect on/from date before made.
This amendment is authorized by sections 241(3), 256(4) of, and paragraph 2(1C) of Schedule 16A to, the Finance (No. 2) Act 2023.
