Pillar Two in the United Kingdom
The United Kingdom implemented OECD Pillar Two through Finance (No. 2) Act 2023 and has refined the regime through Finance Acts 2024, 2025, and 2026. The UK IIR (locally named Multinational Top-up Tax) and the UK QDMTT (locally named Domestic Top-up Tax) apply from 2023-12-31, and the UTPR applies from 2024-12-31, in each case to accounting periods beginning on or after the date shown.
Implementation Timeline
Each rule applies to accounting periods beginning on or after the date shown.
Quick reference
| Rule | Effective date | Status |
|---|---|---|
| IIR — Income Inclusion Rule Local name: Multinational Top-up Tax (MTT) | Accounting periods beginning on or after 2023-12-31 | In force OECD qualified |
| UTPR — Undertaxed Profits Rule | Accounting periods beginning on or after 2024-12-31 | In force OECD review pending |
| QDMTT — Qualified Domestic Minimum Top-up Tax Local name: Domestic Top-up Tax (DTT) | Accounting periods beginning on or after 2023-12-31 | In force OECD qualified |
| QDMTT Safe Harbour | Available alongside the QDMTT | Case-by-case |
Implementing legislation
- Finance (No. 2) Act 2023, Part 3 & Schedules 14, 15, 16, 16A, 17 — Multinational Top-up Tax (IIR)
- Finance (No. 2) Act 2023, Part 4 & Schedules 14, 15, 16, 16A, 17, 18 — Domestic Top-up Tax (QDMTT)
- Finance Act 2024 — technical corrections and incorporation of further OECD Administrative Guidance
- Finance Act 2025 — introduces the UTPR (effective for accounting periods beginning on or after 2024-12-31)
- Finance Act 2026 — incorporates the January 2025 OECD Administrative Guidance and other technical amendments
Practical implications
MNE groups parented in the UK are subject to the Multinational Top-up Tax (IIR) for accounting periods beginning on or after 2023-12-31. Where a subsidiary's jurisdictional effective tax rate (ETR) falls below 15%, top-up tax is computed and paid in the UK (as the jurisdiction of the parent entities).
MNE groups with constituent entities in the UK are subject to the UK Domestic Top-up Tax (QDMTT) for accounting periods beginning on or after 2023-12-31. The UK QDMTT is included in the OECD Central Record as qualified from inception; where the QDMTT Safe Harbour conditions are met, the IIR/UTPR computation at the parent jurisdictions may be exempted.
UTPR deferred by one year. The UK UTPR applies from accounting periods beginning on or after 2024-12-31 — one year later than the IIR/QDMTT — reflecting the EU/UK political alignment around UTPR introduction.
Recent legislative developments
- 2026: Finance Act 2026 — incorporates the January 2025 OECD Administrative Guidance and technical amendments
- 2025: Finance Act 2025 — UTPR introduced (effective 2024-12-31), incorporating the June 2024 Administrative Guidance
- 2024: Finance Act 2024 — incorporates the July and December 2023 OECD Administrative Guidance
- 2023-07-11: Finance (No. 2) Act 2023 enacted — introduces the Multinational Top-up Tax (IIR) and Domestic Top-up Tax (QDMTT)
Related terms
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- OECD Inclusive Framework — Updated Central Record for Purposes of the Global Minimum Tax, approved 2026-05-11 (current as at 2026-05-01). OECD Global Minimum Tax
- UK Legislation — Finance (No. 2) Act 2023 and Finance Acts 2024 · 2025 · 2026. legislation.gov.uk
- HM Revenue & Customs (HMRC) — guidance on the Multinational Top-up Tax and Domestic Top-up Tax. gov.uk/HMRC
- HM Treasury — Pillar Two policy statements and ministerial statements
Disclaimer
This page is reference information prepared as of 2026-05-28 by synthesising the primary sources listed above, and is not legal or tax advice. Before applying any of this material in practice, please:
- Verify the latest Finance Act and HMRC guidance
- Obtain review by a qualified Pillar Two specialist
- Reassess applicability against the specific facts and circumstances of the group
Translation note. The authoritative version of this page is the Korean original (국가별 현황 › 영국). This English version is provided for accessibility and may not capture every nuance of the UK legislation. Where precision matters, please refer to the original legislation.