United Kingdom: Adopted United Kingdom Implementation of Pillar Two in Finance (No. 2) Bill

On 4 July 2023, the Finance (No. 2) Bill, which includes the UK implementation of the top-up tax envisioned by Pillar 2 of the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS), was adopted by the UK Parliament and now awaits royal assent. As agreed in the Inclusive Framework, the tax will apply to parent members of a multinational enterprise group if a subsidiary located in another jurisdiction is taxed at below 15%. The rules would apply to covered enterprise groups with fiscal years starting on or after 31 December 2023.