On March 23, 2023 the Spring Finance Bill and the accompanying Explanatory Notes have been published on the website of the UK Parliament. For international tax specialists the Bill as introduced in the House of Commons for a first reading is very interesting because it contains draft legislation to implement Pillar 2 (ensuring that large multinational enterprises pay a minimum level of tax) in the UK.

The UK intends to introduce a multinational top-up tax (an “Income Inclusion Rule” (IIR)), which will apply to accounting periods beginning on or after December 31, 2023, and a domestic top-up tax which will also apply to accounting periods beginning on or after December 31, 2023.

The very extensive draft legislation to introduce a multinational top-up tax can be found in Part 3 of the 2023 Spring Finance Bill, which starts on page 77. The Explanatory Notes per clause regarding the multinational top-up tax to be introduced in the UK can be found as of page 215 of the Explanatory Notes.

The draft legislation to introduce a 15% domestic top-up tax can be found in Part 4 of the 2023 the Spring Finance Bill, which starts on page 188. The Explanatory Notes per clause regarding the domestic top-up tax to be introduced in the UK can be found as of page 524 of the Explanatory Notes.

The 2023 the Spring Finance Bill as introduced in the House of Commons can be found here.

The accompanying Explanatory Notes can be found here.

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