[World Tax News] UK Releases Statutory Guidance on Pillar 2 Top-up Tax Registration and More

Editorial Team – [2024] 162 taxmann.com 758 (Article)

World Tax News provides a weekly snippet of tax news from around the globe. Here is a glimpse of the tax happening in the world this week.

1. UK releases statutory guidance on Pillar 2 top-up tax registration

The HM Revenue & Customs, UK, on May 20, 2024, released a notice for registration on Pillar 2 top-up taxes. This notice outlines the registration deadline, who needs to register, how to make changes to registration details and the rights and obligations of the taxpayers.

(a) Who needs to register

A group or single entity who:

• has at least 1 entity located in the UK
• has made consolidated group annual revenues of €750 million or more within 2 of the last 4 accounting periods
  then such entity must use the online service to register and report for Pillar 2 top-up taxes in the UK

(b) What you need to be able to register

To register, the filing member will need to provide HMRC with:

• the name and registered address for the Ultimate Parent Entity (UPE);
• the name and registered address for the filing member if it is not the UPE;
• if either of these is a UK limited company or limited liability partnership, the company registration number (CRN) and Unique Taxpayer Reference (UTR) must be provided;
• whether the group one is registering only has entities located in the UK or in the UK and other jurisdictions;
• the start and end date of the group’s accounting period;
• contact details and preferences for one or 2 individuals or teams in the group;
• a contact postal address for the group.

(c) Registration Deadline

If the group meets the eligibility criteria, it must register using the online service within six months of the end date of the first accounting period in which the criteria is met.

Source: Statutory guidance, dated 20-05-2024

2. Australia specifies withholding tax requirements on interest, dividend & royalty payments to NR

On May 19, 2024, the Australian Taxation Office (ATO) published a notice specifying the obligations of the taxpayers who have paid interest, dividends or royalties, subject to withholding tax, to a non-resident. The taxpayers have the following obligations:

• Lodge a Pay as you go (PAYG) withholding from interest, dividend and royalty payments to non-residents – annual report by October 31 each year and/or;
• lodge an Annual investment income report by October 31 each year if the taxpayer is an investment body making interest payments to non-resident investors (or lodge a nil return), and
• pay withholding tax to the ATO unless a withholding exemption or tax treaty relief applies.

Further, the taxpayers are advised to review their records to ensure that they have lodged any overdue annual reports, correctly classified and claimed deductions in their tax return, withheld the correct amount of tax and paid that amount.

In addition, it was provided that the ATO will be focussing on arrangements where:

• Entities defer their interest to avoid or defer withholding tax while continuing to claim income tax deductions on an accrual basis.
• Offshore-related entities are used to facilitate the avoidance of withholding tax in relation to interest expenses deducted from Australian-sourced income and paid to non-residents.

Sources: Notice dated 19-05-2024

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