Finance (No. 2) Act 2023

Chapter 11 U.K. General and miscellaneous provision

[F1 260 Transitional provision and safe harbours U.K.

(1) Schedule 16 contains transitional provision and provision about a general transitional safe harbour.

(2) Schedule 16A contains provision about other safe harbours.]

Textual Amendments

F1 S. 260 substituted (22.2.2024 with effect for accounting periods beginning on or after 31.12.2023 in accordance with Sch. 12 para. 1(2) of the amending Act) by Finance Act 2024 (c. 3), Sch. 12 para. 41(3)

261 Index of defined expressions U.K.

Schedule 17 contains a table that lists terms defined for this Part and the provisions that define or explain them.

262 Power to amend to ensure consistency with Pillar Two U.K.

(1) Where the Treasury consider it necessary for the purpose of ensuring consistency with the Pillar Two rules, the Treasury may by regulations—

(a) make further provision about the application of provisions of this Part [F2 , Part 4 or any of Schedules 14 to 16A and 18], or

(b) amend this Part [F3 , Part 4 or any of Schedules 14 to 18].

[F4 (1A) The provision that may be made by regulations under subsection (1) includes provision designed to secure the effective implementation of the Pillar Two rules including—

(a) provision to ensure consistency with commentaries or guidance published by the OECD that has effect from a time before the commentary or guidance was published;

(b) provision that the Treasury consider necessary to secure the effective operation of multinational top-up tax or domestic top-up tax (see Part 4) where—

(i) the provision does not, at the time of making it, reflect the Pillar Two rules, but

(ii) it is reasonable for the Treasury to believe that changes will be made to the rules that are consistent with, or are similar to, the provision.

(1B) Provision made by regulations under subsection (1) may not have effect—

(a) in the case of provision falling within subsection (1A)(a), in relation to accounting periods ending before the commentary or guidance was published, or

(b) in the case of any other provision, in relation to accounting periods ending before the regulations are made.

(1C) Provision that has effect in relation to accounting periods that begin before the regulations are made may only be made if the Treasury consider that the provision is generally beneficial to—

(a) persons affected by the implementation of the Pillar Two rules, or

(b) persons affected by the provision.

(1D) The reference in subsection (1C) to provision being generally beneficial includes the provision being beneficial by reference to it—

(a) simplifying, or reducing the costs of, compliance with—

(i) multinational top-up tax or domestic top-up tax, or

(ii) taxes imposed under the law of a territory outside the United Kingdom that correspond to multinational top-up tax or domestic top-up tax;

(b) generally (but not necessarily in every case) resulting in a reduction or elimination of a liability to—

(i) multinational top-up tax or domestic top-up tax, or

(ii) taxes imposed under the law of a territory outside the United Kingdom that correspond to multinational top-up tax or domestic top-up tax.]

(2) The power in this section may not be exercised after 31 December 2026.

Textual Amendments

F2 Words in s. 262(1)(a) substituted (22.2.2024 with effect for accounting periods beginning on or after 31.12.2023 in accordance with Sch. 12 para. 1(2) of the amending Act) by Finance Act 2024 (c. 3), Sch. 12 para. 47(1)(a)

F3 Words in s. 262(1)(b) substituted (22.2.2024 with effect for accounting periods beginning on or after 31.12.2023 in accordance with Sch. 12 para. 1(2) of the amending Act) by Finance Act 2024 (c. 3), Sch. 12 para. 47(1)(b)

F4 S. 262(1A)-(1D) inserted (22.2.2024 with effect for accounting periods beginning on or after 31.12.2023 in accordance with Sch. 12 para. 1(2) of the amending Act) by Finance Act 2024 (c. 3), Sch. 12 para. 36

263 Regulations U.K.

(1) A power to make regulations under this Part includes a power to make consequential, supplementary, incidental, transitional or saving provision.

(2) Regulations under this Part are to be made by statutory instrument.

(3) A statutory instrument containing (whether alone or with other provision) regulations made under section 262(1)(b) is subject to the made affirmative procedure.

(4) Otherwise, a statutory instrument containing regulations under this Part is subject to annulment in pursuance of a resolution of the House of Commons.

(5) Where a statutory instrument is subject to “the made affirmative procedure”—

(a) it must be laid before the House of Commons after being made, and

(b) it ceases to have effect at the end of the period of 28 sitting days beginning with the day on which the instrument is made, unless within that period the instrument is approved by a resolution of the House of Commons.

(6) Where regulations cease to have effect as a result of subsection (5), that does not—

(a) affect anything previously done under the regulations, or

(b) prevent the making of new regulations.

(7) In this section, “sitting day” means a day on which the House of Commons is sitting (and a day is only a day on which the House of Commons is sitting if the House begins to sit on that day).

264 Multinational top-up tax to apply from 31 December 2023 U.K.

This Part has effect in relation to accounting periods commencing on or after 31 December 2023.