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For inclusion in Finance Bill 2022/23, the United Kingdom has released draft legislation to introduce the OECD’s Pillar Two Model Rules into UK law. The draft legislation includes an Income Inclusion Rule (IIR), to be known in the UK as the Multinational Top-up Tax, which will apply to accounting periods beginning on or after 31 December 2023. The UK government also stated its intention to introduce an Undertaxed Profit Rule (UTPR), although the final decision on its timing will be confirmed at a later date. The overall approach to drafting the legislation has been to closely follow the intent of the Model Rules, while also adapting the structure and drafting in places to achieve clarity.

Noted below are a few areas where the draft legislation potentially differs from the Model Rules or the associated commentary.


Find out more about Pillar 2, including the key actions for groups that fall within the scope of the new rules, on our Pillar 2 webpage.