Section 167 Underlying profits of hybrids

United Kingdom

(1)

This section applies where a member of a multinational group (“M”)—

(a)

is not regarded as tax transparent in the territory in which it is located, and

(b)

is regarded as tax transparent in a territory in which a member of the group with an ownership interest in it (“G”) is located.

(2)

Where—

(a)

the adjusted profits of G reflect profits of M, and

(b)

the basis for the profits of M being so reflected is that M (along with any other entities through which G holds that interest) is regarded as tax transparent in the territory in which G is located,

such profits as are reflected on that basis are to be allocated to M (and included in the adjusted profits of M to the extent not already included) and excluded from the adjusted profits of G.

Notes on Part 3

Modifications

C1: Pt. 3 modified (2.12.2025) by Finance Act 2026 (c. 11), Sch. 8 paras. 32, 53(3)