Multinational Top-up Tax and Domestic Top-up Tax

MTT25230 - Calculating the effective tax rate: Covered tax balance: Refundable imputation tax

An amount of tax that is disqualified refundable imputation tax will not be regarded as covered tax and must be excluded from the covered tax balance, in accordance with section 173(2)(d) of Finance (No.2) Act 2023.

A refundable tax credit that arises in respect of a refundable imputation tax (whether qualified or disqualified) will not be a qualifying refundable tax credit, in accordance with section 148(3) of the Act. See MTT21410 for guidance on qualifying refundable tax credits.

The meanings of ‘disqualified refundable imputation tax’ and ‘qualified refundable imputation tax’ are set out in section 253(1) and (2) of the Act.

See MTT18010 for guidance on determining the location of an entity.