MTT62120 - Charging mechanisms: Undertaxed Profits Rule: Chargeability for joint venture groups
Members of a joint venture group have different provisions for determining whether they are undertaxed and whether they have an untaxed amount for UTPR.
The potentially undertaxed condition does not apply for members of a joint venture group.
Instead, members of a joint venture group have an untaxed top-up amount where they are undertaxed in relation to a multinational group and where the ultimate parent of the multinational group is not subject to a Pillar Two Income Inclusion Rule.
This is set out in section 229I Finance (No.2) Act 2023.
Undertaxed members of a joint venture group
A member of a joint venture group is undertaxed if:
- the sum of the top-up amount and additional top-up amounts of the joint venture group that would be attributed to the ultimate parent if it were subject to a Pillar Two Income Inclusion Rule,
is greater than
- the amount of the top-up and additional top-up amounts attributed to responsible members in respect of the joint venture group.
The untaxed amount is the difference between those two amounts.
Allocation of untaxed amounts of a joint venture group
Any untaxed amounts of a joint venture group are then allocated to qualifying members of the multinational group via the same allocation mechanism as for any other untaxed amounts of the multinational group (see MTT62310+).