Taxes Consolidation Act 1997 section 111N

Calculation and allocation of UTPR top-up tax amount

Section 111N explains how the Under-Taxed Profit Rule (UTPR) top-up tax is calculated and allocated among the constituent entities of a multinational enterprise (MNE) group located in the State.

• The UTPR top-up tax allocated to the State is determined by comparing the MNE group's employees and tangible assets in the State to those in all jurisdictions with a qualified UTPR, with each factor weighted at 50 per cent.
• The State's share is then divided among individual constituent entities using a similar employee-and-asset formula, though all domestic entities may instead agree an alternative allocation provided the full amount is paid by the specified return date.
• The total UTPR top-up tax for the group equals the sum of top-up tax for each low-taxed entity, reduced or eliminated where a parent entity already applies a qualified Income Inclusion Rule (IIR) in respect of that entity.
• A jurisdiction's UTPR percentage is set to zero for a fiscal year if the UTPR tax allocated to it in a prior year did not result in an equivalent additional cash tax expense for the group's entities in that jurisdiction.

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