HMRC has recently advised that a new package of Administrative Guidance on Pillar Two, agreed by the Inclusive Framework on BEPS, was published by the OECD last month. HMRC has also commenced its latest series of educational comms on the UK’s Pillar Two rules.
The latest OECD administrative guidance on Pillar Two features the following:
- Use of deferred tax assets and liabilities in the calculation of the effective tax rate (application of the recapture rule, and clarifications in cases of divergences between GloBE and accounting carrying value)
- Cross-border allocation of current and deferred taxes
- Allocation of profits and taxes on certain flow-through tax structures
- Treatment of securitisation vehicles.
Further work remains ongoing on the Inclusive Framework on several fronts and a further update will be provided in due course.
The latest communication from HMRC on Pillar 2 is the third in the current series. This is being sent to taxpayers which HMRC considers to be in scope of the new Multi-national Top-up (MTT) and Domestic Top-up ( DTT) taxes, as well as those who have asked to be on this mailing list and other interested agents.
This update, delayed from its original intended issue date due to the general election, is happening via the following channels:
- Directly to some large businesses through their Customer Compliance Managers (CCMs) if they have one
- A bulk email to other large businesses who do not have a CCM and to wealthy/mid-sized taxpayers who have subscribed to receive updates on Pillar Two
- A letter going to other businesses not already signed-up to receive updates but likely to be in scope.
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