[World Tax News] UK Publishes Guidance on Payment of Pillar 2 Top-Up Taxes and More

Editorial Team – [2024] 168 taxmann.com 650 (Article)

World Tax News provides a weekly snippet of tax news from around the globe. Here is a glimpse of the tax happening in the world this week.

1. UK publishes guidance on payment of Pillar 2 top-up taxes

UK HMRC has published guidance on how to pay Pillar 2 top-up taxes, including Domestic Top-up Tax and Multinational Top-up Tax. The Pillar 2 ID reference (a 15-character reference number starting with X) is required to make payment to HMRC.

Payments must be made no later than:

• 30 June 2026, if the first accounting period the group is required to report Pillar 2 Top-up Taxes ends on or before 31 December 2024
• 18 months after the last day of the group’s accounting period, if the first accounting period the group is required to report Pillar 2 top-up taxes ends after 31 December 2024
• the later of 30 June 2026 and 15 months after the last day of the group’s accounting period for all other periods

If the deadline is on a weekend or bank holiday, the payment must reach HMRC by the end of the previous working day.

Further, the guide also enlists the account numbers for receiving payment of taxes in both cases where the tax payment is made by using a UK or Overseas Bank Account.

Source: Guidance by UK HMRC

2. Australian Senate greenlights multinational tax reforms to introduce Pillar 2

On November 26, 2024, the Australian Senate passed the Taxation (Multinational—Global and Domestic Minimum Tax) Imposition Bill 2024, which the House of Representatives had previously approved in August 2024. This legislation introduces the Pillar 2 top-up taxes in Australia, including the Australian Domestic Minimum Tax (DMT), the Australian Income Inclusion Rule (IIR) tax, and the Australian Undertaxed Profits Rule (UTPR) tax.

The DMT and IIR taxes will apply to multinational enterprise (MNE) groups with annual global revenues of at least EUR 750 million, starting from fiscal years beginning on or after January 1, 2024. Meanwhile, the UTPR tax will take effect for fiscal years starting on or after January 1, 2025.

In addition to the Imposition Bill, two other bills are currently before the Senate and remain pending approval as of this writing:

(a) The Assessment Bill: Taxation (Multinational—Global and Domestic Minimum Tax) Bill 2024

(b) The Consequential Bill: Treasury Laws Amendment (Multinational—Global and Domestic Minimum Tax) (Consequential) Bill 2024

The Assessment Bill establishes the framework for implementing top-up taxes under the Domestic Minimum Tax (DMT), Income Inclusion Rule (IIR), and Undertaxed Profits Rule (UTPR) in alignment with the GloBE Rules. The Consequential Bill includes additional and miscellaneous provisions required for administering these top-up taxes, aligning with Australia’s existing tax law framework and the GloBE Rules.

Both bills have been amended to exempt Securitisation Entities from joint and several liability for the top-up tax obligations of other entities within a multinational enterprise (MNE) group.

Source: Taxation (Multinational—Global and Domestic Minimum Tax) Imposition Bill 2024

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