Multinational Top-up Tax and Domestic Top-up Tax

MTT21020 - Calculating the effective tax rate: Adjusted profits: Wholly domestic groups - Alternative basis for determining underlying profits

A wholly domestic group can elect for UK GAAP to be used as an alternative basis for determining underlying profits for the purposes of DTT calculations.

This election provides an additional method by which a group may use an alternative basis to determine its underlying profits. See MTT21010 for guidance on the ordinary criteria under which any group may use an alternative basis to determine its underlying profits, for MTT and DTT purposes.

The election for wholly domestic groups is set out in section 272(8)(a) of F(No.2)A 2023, which amends the application of the alternative basis of determining accounting profits that are set out in section 134 of Part 3 F(no.2)A 2023.

Wholly domestic group

A group is a wholly domestic group for a period if all of its members are located in the UK for that period.

Election

An election made under deemed section 134(3A) is a long term election. See MTT52200 for guidance on making elections.