Taxes Consolidation Act 1997 section 111AO

Joint ventures

Section 111AO sets out how joint ventures and their affiliates are treated for the purposes of the Pillar Two top-up tax rules, including how top-up tax is calculated and allocated among parent entities.

• A joint venture is an entity at least 50% owned (directly or indirectly) by an ultimate parent entity whose results are reported under the equity method in consolidated financial statements, subject to specific exclusions for certain entity types.
• A joint venture and its affiliates are treated as if they were a separate MNE group or large-scale domestic group, with the joint venture acting as the ultimate parent entity for top-up tax calculation purposes.
• The IIR charging provisions (sections 111E to 111J) apply to a parent entity's allocable share of the top-up tax of any joint venture or joint venture affiliate in which it holds a direct or indirect ownership interest.
• The joint venture group top-up tax is reduced by each parent entity's allocable share already charged under a qualified IIR, and any remaining amount is added to the total UTPR top-up tax amount under section 111N(3).

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