HMRC has published guidance requiring multinational enterprises (“MNEs”) with consolidated group annual revenues of 750 million euros or more to register in the UK for Pillar 2 top-up taxes. Group’s falling within the scope of Pillar 2 must register themselves with HMRC within 6 months of the end of their first accounting period that started on or after 31 December 2023.
What is Pillar 2?
Pillar 2 is part of the OECD/G20’s Inclusive Framework on Base Erosion and Profit Shifting (“BEPS”), a series of world-wide tax initiatives designed to ensure that MNEs pay their fair share of corporation tax to tax authorities around the world, including HMRC.
How Pillar 2 impacts MNE groups?
The Pillar 2 provisions introduce a global minimum tax rate of 15% for MNEs with global revenues of 750 million euros or more.
This is to ensure that MNEs pay a minimum level of tax on income in each jurisdiction where they operate, reducing tax avoidance and profit shifting. The rules include mechanisms to impose a top-up tax if the effective tax rate in a jurisdiction falls below the minimum rate of 15%.
Who is required to register in the UK?
A MNE group (including a single entity) with at least 1 entity located in the UK and which has consolidated group annual revenues of 750 million euros or more in 2 of the last 4 accounting periods must register in the UK for Pillar 2.
Registration must be completed through HMRC’s online service (Report Pillar 2 top-up taxes – GOV.UK).
There is currently no agent access available to support with registration, therefore the registration for Pillar 2 in the UK needs to be completed by MNE groups themselves using their Government Gateway user IDs. We however can provide support.
What are the details required for registration?
To register, the following information must be provided:
- Names and registered addresses of the ultimate parent entity (“UPE”) and the nominated filing member (if not the UPE)
- If the UPE or nominated filing member is a UK limited company or limited liability partnership, the company registration number and unique taxpayer reference
- Details regarding accounting periods, contact details of the relevant individuals in the MNE group for Pillar 2 and a contact postal address for the group
- Details of whether the MNE group has entities located only in the UK, or in the UK and other jurisdictions
When is the deadline for registration?
Registration must be completed within 6 months of the end of the first accounting period starting on or after 31 December 2023. Thus, for instance, in-scope MNE groups with an accounting period ending 31 December 2024 must register by the end of this month (June 2025).
For further information, please contact us.
