The CIOT has responded to HMRC’s consultation on draft guidance destined for a new internal guidance manual on the multinational top-up tax (MTT) and domestic top-up tax (DTT) which were introduced in Finance (No 2) Act 2023. Key observations include:
Although designed to cover both MTT and DTT, it should be made clear throughout the guidance when a different application of the rules applies for MTT as compared to DTT.
The ‘mapping’ table in para 09990, which shows how the UK legislation aligns with the OECD Model Rules is helpful, as would a reverse table, mapping the OECD Model Rules back to the UK legislation.
Clarification of the section on chargeability in para 06010 would be helpful, to avoid giving the impression that each entity has a separate effective tax rate calculation for DTT (rather than calculating tax on an aggregated basis before allocating to individual entities).
The CIOT also highlights potential confusion around the meaning of ‘qualifying financial statements’ in F(No 2)A 2023 s 266(10).
The CIOT has responded to HMRC’s consultation on draft guidance destined for a new internal guidance manual on the multinational top-up tax (MTT) and domestic top-up tax (DTT) which were introduced in Finance (No 2) Act 2023. Key observations include:
Although designed to cover both MTT and DTT, it should be made clear throughout the guidance when a different application of the rules applies for MTT as compared to DTT.
The ‘mapping’ table in para 09990, which shows how the UK legislation aligns with the OECD Model Rules is helpful, as would a reverse table, mapping the OECD Model Rules back to the UK legislation.
Clarification of the section on chargeability in para 06010 would be helpful, to avoid giving the impression that each entity has a separate effective tax rate calculation for DTT (rather than calculating tax on an aggregated basis before allocating to individual entities).
The CIOT also highlights potential confusion around the meaning of ‘qualifying financial statements’ in F(No 2)A 2023 s 266(10).
