Finance (No. 2) Act 2023

Section 260

Schedule 16U.K.Multinational top-up tax: transitional provision

Part 1U.K.General transitional measures

Transitional relief for substance-based income exclusionU.K.

1(1)Section 195(4) (payroll carve-out amount) has effect for an accounting period that commences in a year listed in following table as if for “5%” there were substituted the specified percentage for that year—

YearSpecified percentage
202310%
20249.8%
20259.6%
20269.4%
20279.2%
20289.0%
20298.2%
20307.4%
20316.6%
20325.8%

(2)Section 195(5) (tangible asset carve-out amount) has effect for an accounting period that commences in a year listed in following table as if for “5%” there were substituted the specified percentage for that year—

YearSpecified percentage
20238%
20247.8%
20257.6%
20267.4%
20277.2%
20287.0%
20296.6%
20306.2%
20315.8%
20325.4%

Intra-group transfers before entry into regimeU.K.

2(1)Sub-paragraph (3) applies where—

(a)assets are transferred from one member of a multinational group to another member of that group,

[F1(b)the Pillar Two rules do not apply to the transferor for the accounting period in which the transfer takes place (but in determining this, section 255(4) has effect as if sub-paragraph (ii) of paragraph (b) were omitted),

(ba)a qualifying domestic top-up tax does not apply in relation to the transferor for that period, and]

(c)the transfer took place on or after 1 December 2021.

(2)But sub-paragraph (3) does not apply in relation to a transfer of assets manufactured, or of a class or description sold, in the course of carrying on a trade by the transferor or the transferee.

(3)Where this sub-paragraph applies, for the purposes of Part 3 of this Act—

(a)the value of the assets at the relevant time is the carrying value of the assets in the hands of the transferor immediately before the transfer, and

(b)any deferred tax asset that would arise in relation to the assets in the underlying profits of the transferee is limited to [F2the lesser of the cap amount and the sum of—

(i)the value of deferred tax assets that arose in relation to the assets before their transfer, and

(ii)]the tax paid amount in relation to the transfer of assets.

[F3(3A)For the purposes of determining the value of a deferred tax asset under sub-paragraph (3)(b)(i)—

(a)if the rate of tax in relation to that asset is greater than 15%, the value is to be adjusted so that it reflects the value it would be if the rate had been 15%, and

(b)exclude the impact of any valuation adjustments or accounting recognition adjustments.]

(4)For the purposes of this paragraph “the relevant time” means the later of—

(a)the date of the transfer, and

(b)the commencement of the first accounting period in which [F4the Pillar Two rules apply to the transferee.]

F5(i). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F5(ii). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5)Where the relevant time is after the date of the transfer—

(a)the value of the assets at the relevant time is to be adjusted to reflect—

(i)capitalised expenditure incurred in respect of the assets in the period between the date of the transfer and the relevant time, and

(ii)amortisation and depreciation of the assets that, had the transfer not occurred, would have been recognised by the transferor if the transferor had continued to use the accounting policies and rates for amortisation and depreciation of the assets previously used, and

(b)the tax paid amount in relation to the transfer of the assets [F6, and the value of deferred tax assets that arose in relation to the assets before their transfer, are] to be adjusted to reflect the matters referred to in paragraph (a)(i) and (ii).

(6)To determine the “tax paid amount” in relation to a transfer of assets take the following steps—

  • Step 1

    Determine the amount of the tax expense of the transferor in relation to the transfer of the assets that relates to covered taxes.

  • Step 2

    Determine the amount, if any, of qualifying current tax expense relating to the transfer of the assets that would have been allocated to the transferor as a result of section 177 or 179 (permanent establishments and controlled foreign company regimes) if—

    (a)

    [F7the ultimate parent had been located in the United Kingdom and the accounting period commenced on or after 31 December 2023, and]

    (b)

    section 179(2) (restriction of allocation of mobile income) were ignored.

  • Step 3

    Add together the amounts determined under Steps 1 and 2.

[F8(7)In determining the tax expense of the transferor in relation to the transfer of the assets—

(a)where any loss arising in the accounting period in which the transfer took place is offset against any taxable gain arising on the transfer, ignore that offsetting, and

(b)exclude the impact of any valuation adjustments or accounting recognition adjustments.]

(8)The “cap amount” in relation to a transfer of assets is the amount given by—

(a)dividing—

(i)the amount of tax expense determined under Step 1 in sub-paragraph (6), by

(ii)the nominal rate of tax to which that expense relates, and

(b)multiplying the result of paragraph (a) by 15%.

(9)Where [F9the sum of] the tax paid amount [F10and the value of deferred tax assets that arose in relation to the assets before their transfer is greater than] the cap amount F11..., the filing member may elect that sub-paragraph (3) does not apply in relation to the transfer of assets.

(10)Paragraph 2 of Schedule 15 (annual elections) applies to an election under sub-paragraph (9).

(11)For the purposes of this paragraph,

[F12(a)]a transfer of assets” includes a transaction that relates to assets that does not result in a change in their ownership if the transaction has [F13a similar effect for accounting purposes to] a change in ownership of those assets;

[F14(b)a qualifying domestic top-up tax is not to be taken as applying to a member of a multinational group if provision for a QDMTT Safe Harbour (within the meaning of the Pillar Two rules) applies to it.]

[F15(12)Where assets are transferred from one member of a multinational group to another member of that group as a result of a series of transfers that—

(a)fall within sub-paragraph (1), but

(b)do not fall within sub-paragraph (2),

that series is to be treated as a single transfer of assets that falls within sub-paragraph (1).

(13)This paragraph applies to that single transfer as if—

(a)the reference to the transferor in sub-paragraph (3)(a) were to the transferor in relation to the first transfer in the series,

(b)the references in sub-paragraph (3)(b) to the cap amount, the value of deferred tax assets that arose in relation to the assets before their transfer and the tax paid amount were to the aggregate of each such amount or value as determined for the purpose of each transfer that makes up the series,

(c)the reference to the date of the transfer in sub-paragraph (4)(a) were to the date of the last transfer in the series, and

(d)the references to the transferee in sub-paragraph (4)(b) were to the transferee in relation to the last transfer in the series.]

Textual Amendments

F1Sch. 16 para. 2(1)(b)(ba) substituted for Sch. 16 para. 2(1)(b) (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. 34(2)(a)

F2Words in Sch. 16 para. 2(3)(b) 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. 38(2)

F3Sch. 16 para. 2(3A) 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. 38(3)

F4Words in Sch. 16 para. 2(4)(b) 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. 34(2)(b)(i)

F5Sch. 16 para. 2(4)(b)(i)(ii) omitted (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 virtue of Finance Act 2024 (c. 3), Sch. 12 para. 34(2)(b)(ii)

F6Words in Sch. 16 para. 2(5)(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. 38(4)

F7Words in Sch. 16 para. 2(6) 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. 34(2)(c)

F8Sch. 16 para. 2(7) 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. 38(5)

F9Words in Sch. 16 para. 2(9) 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. 38(6)(a)

F10Words in Sch. 16 para. 2(9) 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. 38(6)(b)

F11Words in Sch. 16 para. 2(9) omitted (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 virtue of Finance Act 2024 (c. 3), Sch. 12 para. 38(6)(c)

F12Words in Sch. 16 para. 2(11) renumbered as Sch. 16 para. 2(11)(a) (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. 34(2)(d)(i)

F13Words in Sch. 16 para. 2(11) 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. 38(7)

F14Sch. 16 para. 2(11)(b) 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. 34(2)(d)(ii)

F15Sch. 16 para. 2(12)(13) 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. 38(8)

Part 2U.K.Transitional safe harbour

Chapter 1U.K.Transitional safe harbour election

ElectionU.K.

3[F16(1)The filing member of a multinational group may make a transitional safe harbour election for an accounting period in respect of a territory.

(1A)The effect of the election is that all of the standard members of the group located in the territory are to be treated as not having top-up amounts or additional top-up amounts for the purpose of determining the liability of any member of the group to multinational top-up tax.]

(2)An election may only be made for an accounting period if—

(a)the period commences on or before 31 December 2026 and ends on or before 30 June 2028,

(b)a qualifying country-by-country report has been prepared in relation to the territory for the period,

(c)the election has been made in respect of the territory for each preceding accounting period—

(i)that commenced on or after 31 December 2023, and

(ii)in which the Pillar Two rules [F17would, ignoring any transitional safe harbour election, have applied to any member] of the group in the territory,

(d)an election under section 189 (deemed distribution tax election) has not been made in respect of the territory for the accounting period, and

(e)at least one of the following tests are met for the territory in accounting period—

(i)the threshold test (see paragraph 7),

(ii)the simplified effective tax rate test (see paragraph 8), or

(iii)the routine profits test (see paragraph 9).

(3)An election may not be made in respect of the territory of the ultimate parent of a multinational group for an accounting period if the ultimate parent is a flow-through entity unless, were the adjusted profits of the ultimate parent determined for that period in accordance with Part 3

(a)its adjusted profits would be nil as a result of the application of section 170 (adjustments for ultimate parent that is a flow-through entity), or

(b)all of the ultimate parent’s adjusted profits would be attributable to one or more permanent establishments (see section 159) and no amount of income or expense of any permanent establishment would be treated, as a result of section 160 (attribution of losses between permanent establishment and main entity), as income or expense of the ultimate parent.

F18(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5)Paragraph 2 of Schedule 15 (annual elections) applies to an election under this paragraph.

(6)The information return in which the election is made must set out which of the tests referred to in sub-paragraph (2)(e) are being relied on and include evidence of how any that is relied on is met.

[F19(7)For the purposes of this Part of this Schedule, a country-by-country report in relation to a territory is “qualifying” if the information relating to the territory is prepared on the basis of qualified financial statements of the multinational group (see paragraph 4).

(8)Where there is no requirement under the law of any territory for a country-by-country report to be prepared and filed in respect of a multinational group, the filling member may include, in the information return in which the election is made, the information that would have been in such a report—

(a)prepared in accordance with legislation implementing the OECD’s guidance on country-by-country reporting under the law of the territory of the ultimate parent, or

(b)where there is no such legislation, prepared in accordance with that guidance.

(9)Where such information has been included in that information return, that information is to be treated as if it were a country-by-country report in relation to the territory for the purposes of this Chapter (and where that information complies with sub-paragraph (7), the condition in sub-paragraph (2)(b) is to be treated as met).]

Textual Amendments

F16Sch. 16 para. 3(1)(1A) substituted for Sch. 16 para. 3(1) (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. 39(2)

F17Words in Sch. 16 para. 3(2)(c)(ii) 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. 34(3)(a)

F18Sch. 16 para. 3(4) omitted (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 virtue of Finance Act 2024 (c. 3), Sch. 12 para. 34(3)(b)

F19Sch. 16 para. 3(7)-(9) substituted for Sch. 16 para. 3(7)(8) (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. 29(2)

Qualified financial statements and basis of calculationsU.K.

4(1)For the purposes of this Part of this Schedule “qualified financial statements” of a multinational group means—

(a)the accounts used to prepare the consolidated financial statement of the ultimate parent, or

(b)financial statements of members of the group prepared in accordance with acceptable accounting standards or an authorised accounting standard.

(2)Where a member of a multinational group is not included in consolidated financial statements of any member of the group on a line-by-line basis solely due to size or materiality grounds, the financial accounts of that member that are used for preparation of the group’s country-by-country report are to be regarded as forming part of the qualified financial statements of the group.

(3)For the purposes of establishing whether the tests in paragraphs 7 to 9 are met in relation to members of a multinational group in a territory, the basis for that determination is to be the information derived from qualified financial statements as to—

(a)revenue,

(b)profit (loss) before income tax, F20...

(c)qualifying income tax expense (see paragraph 5) [F21, and

(d)qualified substance based income amount (see paragraph 9(2)).]

(4)Information derived from qualified financial statements as to revenue or profit (loss) before income tax must be adjusted—

(a)as the information was adjusted for the purposes of its inclusion in a qualifying country-by-country report in relation to the territory, or

(b)if the information was not included in such a report, as it would have been adjusted had it been included in such a report.

See also paragraph 6 which provides for circumstances in which further adjustments are required to profit (loss) before income tax and circumstances in which adjustments are required to qualifying income tax expense.

(5)The information described in sub-paragraph (3)(a) to [F22(d)] that must be used to determine whether the tests in paragraphs 7 to 9 are met in relation to members of a multinational group in a territory must be derived from whichever of the following was used to prepare the qualifying country-by-country report in relation to the territory—

(a)qualified financial statements falling within sub-paragraph (1)(a), along with any financial accounts treated as qualified financial statements as a result of sub-paragraph (2), or

(b)qualified financial statements falling within sub-paragraph (1)(b), along with any financial accounts treated as qualified financial statements as a result of sub-paragraph (2).

(6)Where that information in respect of a territory is not available in qualified financial statements of a multinational group, no election may be made in respect of that territory.

Textual Amendments

F20Word in Sch. 16 para. 4(3) omitted (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 virtue of Finance Act 2024 (c. 3), Sch. 12 para. 39(3)(a)(i)

F21Sch. 16 para. 4(3)(d) and word 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. 39(3)(a)(ii)

F22Word in Sch. 16 para. 4(5) 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. 39(3)(b)

Qualifying income tax expenseU.K.

5In this Part of this Schedule, “qualifying income tax expense” means income tax expense adjusted to exclude—

(a)any amount that does not relate to covered taxes, and

(b)any amount that relates to an uncertain tax position.

AdjustmentsU.K.

6(1)Sub-paragraph (2) applies where the adjusted profits of the ultimate parent of a multinational group for an accounting period would be reduced as a result of section 171(1) (ultimate parent subject to deductible dividend regime).

(2)Where this sub-paragraph applies the profit (loss) before income tax of the ultimate parent for that period is to be reduced (but not below nil) by the amount referred to in section 171(1).

(3)Sub-paragraph (4) applies where—

(a)the standard members of a multinational group in a territory have a net unrealised fair value loss for an accounting period, and

(b)that loss exceeds 50 million euros.

(4)Where this sub-paragraph applies, those losses are to be excluded from the aggregate profit (loss) before income tax of those members.

(5)For the purposes of sub-paragraph (3), the standard members of a multinational group in a territory have a net unrealised fair value loss for an accounting period to the extent their losses that arise from changes in fair value of relevant ownership interests exceed gains arising from changes in fair value of relevant ownership interests.

(6)An ownership interest in an entity is relevant [F23unless], at the end of the accounting period, the members of the multinational group do not between them have ownership interests that entitle them to 10% or more of the entity’s —

(a)profits,

(b)capital,

(c)reserves, and

(d)voting rights.

(7)Amounts of profits and qualifying tax expense allocated, for the purposes of Part 3, to a member of a multinational group from an investment entity as a result of an election under section 213 (investment entity tax transparency election) are to be reflected (to the extent they are not already) in the member’s profit (loss) before income tax and qualifying tax expense used for the purposes of applying the tests in paragraphs 7 to 9.

(8)Amounts that are to be included or otherwise taken account of, for the purposes of Part 3, in the adjusted profits and covered tax balance of a member of a multinational group as a result of an election under section 214 (taxable distribution method election) are to be reflected (to the extent they are not already) in the member’s profit (loss) before income tax and qualifying tax expense used for the purposes of applying the tests in paragraphs 7 to 9.

Textual Amendments

F23Word in Sch. 16 para. 6(6) 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. 39(4)

Threshold testU.K.

7(1)The threshold test is met for a territory in an accounting period if—

(a)the revenue of the standard members in that territory for the period is less than 10 million euros, and

(b)the aggregate profit (loss) before income tax of those members for that period is less than 1 million euros.

(2)Where those members include members that are held for sale and the revenue of those members is not otherwise included in the amount determined for the purposes of sub-paragraph (1)(a), that revenue is to be so included.

Simplified effective tax rate testU.K.

8(1)The simplified effective tax rate test is met for a territory in an accounting period if the simplified effective tax rate of the standard members of the group in that territory is—

(a)in the case of an accounting period beginning before 1 January 2025, at least 15%,

(b)in the case of an accounting period beginning in 2025, at least 16%, or

(c)in the case of an accounting period beginning on or after 1 January 2026, at least 17%.

(2)The simplified effective tax rate of the standard members of a multinational group in a territory in an accounting period is the amount (expressed as a percentage) given by dividing—

(a)the aggregate qualifying income tax expense of those members for that period, by

(b)the aggregate profit (loss) before income tax of those members for that period.

Routine profits testU.K.

9(1)The routine profits test is met for a territory in an accounting period if—

(a)the qualified substance based income exclusion amount for that territory for that period is equal to or greater than the aggregate profit (loss) before income tax for that period of the standard members of the group located in that territory, or

(b)the aggregate profit (loss) before income tax of those members for that period is nil or reflects an overall loss.

(2)The “qualified substance based income exclusion amount” for a territory for an accounting period is the substance based exclusion determined for the territory for the period in accordance with section 195 (and see also paragraph 1 of this Schedule) ignoring any payroll carve-out amount or tangible asset carve-out amount of any standard member of the group in that territory—

(a)that is not regarded as a constituent entity of the multinational group for the purposes of the group’s country-by-country report, or

(b)that is not regarded as located in the territory for the purposes of that report.

Chapter 2U.K.Application to joint ventures etc

Application in the case of joint venture groupU.K.

10 [F24(1)] For the purpose of applying Chapter 1 of this Part of this Schedule to a joint venture group (see [F25section 227] which applies this Schedule generally, with modifications, to joint venture groups) [F26, that Chapter has effect as if]

(a)paragraph [F273(2)(b)] were omitted (requirement for qualifying country-by-country report),

(b)the reference in paragraph 4(2) to “the financial accounts of that member that are used for preparation of the group’s country-by-country report” were to the financial accounts that would be used if a qualifying country-by-country report had been prepared in respect of the joint venture group, and

(c)in paragraph 9(2), the words from “ignoring” to the end were omitted.

[F28(2)For that purpose ignore section 227(1)(a) (reference to ultimate parent treated as reference to joint venture parent).

(3)Accordingly, the filing member of a multinational group may make a separate transitional safe harbour election in respect of joint venture members of a joint venture group in a territory.]

Textual Amendments

F24Sch. 16 para. 10 renumbered as Sch. 16 para. 10(1) (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. 58(3)(a)

F25Words in Sch. 16 para. 10(1) 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. 58(3)(b)(i)

F26Words in Sch. 16 para. 10(1) 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. 58(3)(b)(ii)

F27Word in Sch. 16 para. 10(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. 58(3)(c)

F28Sch. 16 para. 10(2)(3) 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. 58(3)(d)

Application to investment entities in same territory as ownersU.K.

11(1)Subsection (2) applies where—

(a)an investment entity that is a member of a multinational group, and

(b)all of the members of a multinational group with direct ownership interests in it,

are located in the same territory.

(2)The investment entity is to be treated as a standard member of that group for the purposes of this Part of this Schedule.

Minority owned membersU.K.

12For the purposes of this Part of this Schedule, references to the standard members of a multinational group include minority owned members.

[F29Part 3U.K.Transitional reporting election

Textual Amendments

F29Sch. 16 Pt. 3 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. 40(1)

Transitional reporting electionU.K.

13(1)HMRC may publish a notice that provides for alternative requirements for the information that must be contained in an information return in respect of members of a multinational group to which an election under sub-paragraph (3) applies.

(2)Where—

(a)HMRC have published a notice under paragraph (1) containing alternative requirements, and

(b)an election under sub-paragraph (3) applies to members of a multinational group for an accounting period,

paragraph 10 of Schedule 14 applies to the filing member of the group for that period subject to the notice.

(3)An election under this sub-paragraph—

(a)is to be made in respect of all of the members of a multinational group in a territory,

(b)is to be made by the filing member of the group,

(c)may only have effect in relation to an accounting period that begins on or before 31 December 2028 and ends before 1 July 2030, and

(d)may only be made if condition A, B or C is met.

(4)Condition A is that none of the members in the territory have top-up amounts or additional top-up amounts for the accounting period to which the election is to apply.

(5)Condition B is that—

(a)there is only one responsible member responsible for all of the members in the territory for the accounting period to which the election is to apply, and

(b)the sum of amounts attributed under Chapter 7 of Part 3 to that responsible member for that period in respect of those members’ top-up amounts and additional top-up amounts is equal to the sum of the members’ top-up amount and additional top-up amounts.

(6)Condition C is that—

(a)there is more than one responsible member responsible for the members of the group in the territory for the accounting period to which the election is to apply, and

(b)each responsible member is responsible for every member of the group in the territory and has the same inclusion ratio for each member it is responsible for.

(7)Paragraph 2 of Schedule 15 (annual elections) applies to an election under this paragraph.]