Section 229A Meaning of potentially undertaxedF1

(1)

The top-up amount and additional top-up amounts of a member (“M”) of a multinational group for an accounting period are “potentially undertaxed” if—

(a)

M is the ultimate parent or is located in the same territory as the ultimate parent, or

(b)

the ultimate parent is not a responsible member.

(2)

Subsection (1) does not apply if—

(a)

the ultimate parent is not a responsible member,

(b)

none of the ownership interests of the ultimate parent in M are direct ownership interests, and

(c)

every indirect ownership interest the ultimate parent has in M is derived from an ownership interest the ultimate parent has in a responsible member.

(3)

Subsection (1) also does not apply if—

(a)

the ultimate parent is located in a territory in which a DIIR is in force and is a responsible member, and

(b)

M is located in the same territory as the ultimate parent.

(4)

This section and section 229B do not apply to members of a joint venture group (but see section 229I for alternative provision).

Annotations

F1: Pt. 3 Ch. 9A inserted (in relation to accounting periods commencing on or after 31.12.2024) by Finance Act 2025 (c. 8), Sch. 4 paras. 5, 10

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