Last consultation before guidance manual will be published in late spring 2025
HM Revenue and Customs (HMRC) on January 28, 2025, released for consultation supplementary draft guidance regarding the UK's Pillar Two global minimum tax rules.
This is the fourth tranche of HMRC draft guidance regarding the UK multinational top-up tax (MTT) and domestic top-up tax (DTT); previous tranches were published in June 2023, December 2023, and September 2024.
Consultation responses have been invited on both the latest and previously released draft guidance (as well as suggestions for any other content that might be helpful) on or before April 8, 2025, following which the guidance manual will be published in full in late spring 2025. HMRC has confirmed that this will be the last draft guidance document released as a consultation document, but comments on guidance after publication of the manual would still be welcome via HMRC’s Pillar Two dedicated inbox.
New content included in this release of the draft guidance includes:
The draft guidance also indicates certain areas where the UK is moving unilaterally. For example, under the UK Pillar Two legislation, each part of a protected cell company (PCC) is to be treated as an entity distinct from the other parts. This treatment extends to foreign PCCs incorporated under an equivalent foreign law. The model Pillar Two rules do not expressly consider this matter, so there is some ambiguity around the treatment of PCCs.
HMRC has also confirmed that several changes are intended to be made to the guidance manual before it is published:
HMRC is not intending to publish pages on eligible distribution tax systems, deductible dividend regimes, or multi-parent groups as these regimes and entities are not found in the UK.
Read a February 2025 report prepared by the KPMG member firm in the United Kingdom