111AK Transitional UTPR safe harbour

Summary

This section provides a transitional exclusion from the application of UTPR to a UPE and other group members located in the same jurisdiction as the UPE where the nominal rate of corporate income tax is at least 20%.

Details

Definitions

(1) Introduces definitions relating to transitional UTPR safe harbour:

“corporate income tax rate” means the nominal rate of corporate income tax (including any sub-national corporate income taxes) generally imposed on income in a jurisdiction;

“transition period fiscal year” means a fiscal year not exceeding twelve months in duration that begins on, or before, 31 December 2025 and ends before 31 December 2026.

Application

(2) For the purpose of section 111N(3) (calculation of the UTPR top-up tax amount), on the making of an election by the filing constituent entity, the top-up tax calculated for each low-taxed constituent entity of an MNE group or member of a joint venture group located in the jurisdiction of the ultimate parent entity of the MNE group or joint venture group concerned shall, where that jurisdiction has a corporate income tax rate that is equal to, or greater than, 20 per cent, be zero for a transition period fiscal year.

(3) A filing constituent entity shall not make both a transitional CbCR safe harbour election and transitional UTPR safe harbour election in respect of the same jurisdiction for the same fiscal year.

Relevant Date: Finance Act 2024