Multinational Top-up Tax and Domestic Top-up Tax

MTT10120 - Scope: Definitions: Meaning of 'entity'

For MTT purposes, ‘entity’ means:

• a company, or
• any arrangement that results in the preparation of separate financial accounts in respect of the activities carried out under the arrangement (such as a partnership or trust).

This is set out in section 231 of Finance (No.2) Act 2023.

Entity that is part of a government

An entity will not be regarded as an entity if it is, or is part of, a national, regional, or local government.

An entity that is owned by a government will be regarded as an entity, but may be an excluded entity where the conditions are met. See MTT10240 for guidance on the definition of ‘governmental entity’.

Permanent establishments to be treated as an entity

For MTT purposes, a permanent establishment is treated as an entity that is distinct from its main entity.

See MTT10130 for guidance on the definition of ‘permanent establishment’ and ‘main entity’.

Protected cell companies and other sub-divided entities

See MTT10140 for guidance on whether a protected cell company or its components are entities for MTT purposes.

See MTT10150 for guidance on other sub-divided entities.

Investment funds

The definition of entity is extremely wide.  One impact is that funds, however structured, will typically be regarded as entities, as funds will typically prepare separate financial accounts.