HMRC has launched a consultation on the national implementation of Pillar 2 of the OECD’s international corporate tax framework.
EU member states reached agreement in principle to implement at EU level the minimum taxation component, known as Pillar 2, in 2022. At the time the OECD said: “Effective implementation of the directive will limit the race to the bottom in corporate tax rates.
“The profit of the large multinational and domestic groups or companies with a combined annual turnover of at least €750 million will be taxed at a minimum rate of 15%. The new rules will reduce the risk of tax base erosion and profit shifting and ensure that the largest multinational groups pay the agreed global minimum rate of corporate tax.”
HMRC said it has contacted groups with a UK presence that may be in scope of Pillar 2. It said: “We have provided key information about the new international tax framework and where they can find further guidance.
“We’ll be providing regular updates on Pillar 2 developments to support business with the upcoming change. We’ve set up a new Pillar 2 Compliance team. The team will work with the adviser community, to help us understand any problems groups may have, and what action we can take to overcome them.” The Pillar 2 Compliance team can be contacted at pillar2mailbox@hmrc.gov.uk.
The tax authority added: “We also published draft technical guidance on multinational top-up tax and Domestic top-up tax, following their introduction in the Finance Bill 2022/23. This guidance provides additional information on which groups will be in scope, and how the taxes will be administered and charged. We are encouraging stakeholders to share their comments on the draft manual and any additional material that the manual should cover, for example, specific parts of the legislation that where further guidance would be beneficial.
Stakeholders can provide comments by emailing pillar2.consultation@hmrc.gov.uk and including ‘HMRC guidance manual’ in the subject line. The consultation closes on 12 September 2023.
