MTT41620 - Particular entities and adjustments: Joint venture groups: Calculating top-up amounts
Source: gov.uk (2025-08-05)


The effective tax rate and top-up amounts of a joint venture group are calculated under the same provisions that apply to the consolidated group.

Those provisions of the legislation have effect for a joint venture group as if:
- references to an ultimate parent were to the joint venture parent,
- references to a member of a multinational group were to a member of the joint venture group, and
- references to the filing member were to the filing member of each multinational group whose ultimate parent holds (directly or indirectly) at least 50% of the ownership interests in the joint venture parent.
This is set out in section 227 of Finance (No.2) Act 2023.

Both owners in scope of MTT

A joint venture is brought into scope of MTT by virtue of its owner being in scope itself. The joint venture is brought into scope in relation to that owner and may be in scope in relation to both of its owners. This remains true in Domestic Top-up Tax, where the members of a joint venture group are qualifying entities.

Elections made by one owner in relation to the joint venture group will not apply for the other owner. This means that the ETR and top-up amounts of the joint venture group will be calculated separately for each owner and may not be the same, even though the joint venture group consists of the same entities for both groups.

Safe harbours

The qualifying domestic minimum top-up tax safe harbour election is made separately for joint venture groups and different disqualifying conditions apply in relation to joint venture groups (see MTT15130 (https://www.gov.uk/hmrc-internal-manuals/multinational-top-up-tax-and-domestic-top-up-tax/mtt15130)).

The transitional safe harbour is also made separately for joint venture groups. A notional Country-by-Country Report may be used if the joint venture group does not prepare an actual Report. See MTT15970 (https://www.gov.uk/hmrc-internal-manuals/multinational-top-up-tax-and-domestic-top-up-tax/mtt15970) for further guidance.

De minimis election

The de minimis election (see MTT30100 (https://www.gov.uk/hmrc-internal-manuals/multinational-top-up-tax-and-domestic-top-up-tax/mtt30100)) is made separately for joint venture groups and the consolidated group.

Example

ABC Group has a joint venture business with the XYZ Group, A-Z Co. The ultimate parents of each of those consolidated groups hold 50% of the direct ownership interests in A-Z Co.

Both consolidated groups are in scope of MTT. A-Z Co has no subsidiaries. Neither A-Z Co nor any member of either consolidated group is an excluded entity.

The financial results of A-Z Co, which do not meet the revenue threshold test, are reported under the equity method in the consolidated statements of both ABC Group and XYZ Group.

A-Z Co will be a joint venture parent in relation to both ABC Group and XYZ Group and is a joint venture group.

The effective tax rate and top-up amounts of A-Z Co will be calculated separately from the other members of each group, for the purposes of each group. Any election made by ABC Group relating to its JV group will have no effect for the calculation of any top-up due to XYZ group, and vice versa.

Amendment in Finance Act 2025

Section 227 was amended by FA25. This guidance page reflects the current version of the legislation. Consult FA25 for legislation applicable to prior periods if the retrospection election does not apply (see MTT09490 (https://www.gov.uk/hmrc-internal-manuals/multinational-top-up-tax-and-domestic-top-up-tax/mtt09490)).