MTT15130 - Scope: Safe harbours: QDMTT safe harbour: Joint ventures, investment entities and minority owned members
Source: gov.uk (2025-08-05)


A QDMTT safe harbour election is made separately for standard members, non-standard members (investment entities and minority owned members), and joint venture groups in each territory.

In general, the normal rules (see MTT15120 (https://www.gov.uk/hmrc-internal-manuals/multinational-top-up-tax-and-domestic-top-up-tax/mtt15120)) apply when making the election in respect of these sub-groups. However, the disqualifying conditions vary.

This is set out in Chapter 2 of Schedule 16A to Finance (No.2) Act 2023.

Example

Group A is a multinational group which has members located in Territory A. These members include standard members, investment entities, minority owned entities and members of a joint venture group (all of which are standard members).

For the QDMTT safe harbour in respect of Territory A, Group A would make four separate elections for each of these types of member.

Joint venture groups

For joint venture groups, there is an additional disqualifying condition.

Disqualifying condition E:

This disqualifying condition is met if the QDMTT that applies in the territory:
- does not generally impose a charge on members of the group that are members of a joint venture group, and
- does not include a provision for a charge to be imposed on such members in circumstances where there would otherwise be an amount of tax that was not charged to any member of the group in that territory.
This condition exists because a QDMTT may be accredited for the safe harbour even though it does not impose a charge on joint venture groups, even where this would result in an amount of tax not being charged at all. The conditions “switch off” the safe harbour for joint venture groups where this outcome may arise.

Note that this condition relates to the design of the QDMTT and does not depend on the particular facts relating to the group.

Investment entities – disqualifying condition D

For investment entities, the reference to 'standard members' in disqualifying condition D should be read as referring to investment entities.

Investment entities – disqualifying condition E

For investment entities, there is an additional disqualifying condition.

Condition E:

This disqualifying condition is met if the QDMTT that applies in the territory:
- does not generally impose a charge on members of the group that are investment entities, and
- does not include a provision for a charge to be imposed on such members in circumstances where there would otherwise be an amount of tax that was not charged to any member of the group in that territory.
This condition exists because a QDMTT may be accredited for the safe harbour even though it does not impose a charge on investment entities, even where this would result in an amount of tax not being charged at all. The conditions “switch off” the safe harbour for joint venture groups where this outcome may arise.

Note that this condition relates to the design of the QDMTT and does not depend on the particular facts relating to the group.

Domestic Top-up Tax, the UK’s QDMTT, is subject to this switch-off.

Minority owned members

The conditions for minority owned members are the same as they are for standard members, except that the reference in disqualifying condition D to 'standard members' should be read as referring to minority owned members.