Finance (No. 2) Act 2023

[F1 Cross-border allocation of deferred tax expense U.K.

Textual Amendments

F1 S. 181B and cross-heading inserted (with effect in accordance with Sch. 4 para. 72(4) of the amending Act) by Finance Act 2025 (c. 8), Sch. 4 paras. 28, 72(4)

181B Cross-border allocation of deferred tax assets and liabilities U.K.

(1) Deferred tax assets and liabilities are to be allocated between standard members of a multinational group in one territory and standard members of the group in another territory in accordance with the deferred taxes methodology.

(2) The “deferred taxes methodology” means—

(a) provisions of regulations made under section 262(1)(a) (power to make further provision about the application of provisions of this Part etc) identified in the regulations as the deferred taxes methodology, or

(b) where no deferred taxes methodology is identified in any such regulations, the methodology described in the cross-border deferred taxes guidance.

(3) The “cross-border deferred taxes guidance” means Chapter 4.2 of Tax Challenges Arising from the Digitalisation of the Economy – Administrative Guidance on the Global Anti-Base Erosion Model Rules (Pillar Two), June 2024 published by the OECD on 17 June 2024.

(4) Where subsection (2)(b) applies, the cross-border deferred taxes guidance has effect as deferred taxes methodology with all necessary modifications for that purpose (for example, reference to a Five-Year Election is to be read as an election to which paragraph 1 of Schedule 15 (long term elections) applies).

(5) This Chapter is to have effect with such modifications as are necessary to give effect to the deferred taxes methodology.]