Revenue eBrief No. 045/25

17 February 2025

Global Minimum Level of Taxation for Multinational Enterprise Groups and Large-Scale Domestic Groups in the Union

Tax and Duty Manual Part 04A-01-02- Global Minimum Level of Taxation for Multinational Enterprise Groups and Large-Scale Domestic Groups in the Union has been updated to reflect certain amendments, made to Part 4A by Finance Act 2024.

The changes reflected include, but are not limited, to the following:

• Amendments to section 8.5 with respect to the application of a number of rules relating to deferred tax, including an order of utilisation rule when determining the total deferred tax adjustment amount for a fiscal year in relation to a loss deferred tax asset.
• Amendments to section 8.7 to provide for the allocation of certain covered taxes to a constituent entity that is a hybrid entity or a reverse hybrid entity, and to allow for an election to exclude the allocation of certain deferred tax expenses and benefits to a jurisdiction.
• Amendments to section 9.8 with respect to the transitional CbCR safe harbour, including anti-avoidance provisions with respect to “hybrid arbitrage arrangements”.
• The insertion of a new section 9.10, which provides guidance on the rules to be used by eligible groups for non-material constituent entities to be applied under the “Simplified Calculations Safe Harbour”.
• Amendments to section 13.2 to reflect the amendments to section 111AAB which provide that standalone investment undertakings, as defined in section 246 of the TCA 1997, shall not be chargeable to the domestic top-up tax.
• Amendments to section 13.3 to reflect the amendments to section 111AAC which provide for the domestic top-up tax liability in respect of a securitisation entity to be imposed on another constituent entity of the MNE group or, where the top-up tax liability cannot be otherwise collected, on the securitisation entity itself.
• Amendments to section 13.4 in relation to the calculation of domestic top-up tax, to clarify the operation of this provision.

A number of other amendments have been reflected throughout the TDM to clarify a number of technical adjustments enacted by Finance Act 2024 to ensure that the Pillar Two legislation operates as intended.

Appendix 1 (Correlation Table) has also been updated to reflect all required references.