MTT30010 - Calculating top-up amounts: Overview
Source: gov.uk (2025-08-11)


The MTT charge represents a top-up of tax where the effective tax rate in a territory is below 15%. The amount to be charged is called a top-up amount.

To determine a top-up amount, the effective tax rate of a territory must first be determined (see MTT20000+ (https://www.gov.uk/hmrc-internal-manuals/multinational-top-up-tax-and-domestic-top-up-tax/mtt20000%20)).

The aggregate adjusted profits for the territory are then determined, and the substance based income exclusion amount (see MTT32000+) is deducted. This amount is then multiplied by the effective tax rate of the territory to determine the total top-up amount for the territory (see MTT31010 (https://www.gov.uk/hmrc-internal-manuals/multinational-top-up-tax-and-domestic-top-up-tax/mtt31010%20)).

QDT credits may then be deducted from the total top-up amount for the territory (see MTT31020 (https://www.gov.uk/hmrc-internal-manuals/multinational-top-up-tax-and-domestic-top-up-tax/mtt31020%20)).

The top-up amount of each individual member in the territory can then be determined (see MTT31000 (https://www.gov.uk/hmrc-internal-manuals/multinational-top-up-tax-and-domestic-top-up-tax/mtt31000%20)).

When the top-up amount of a member has been determined, the amount is then attributed to the responsible members who are chargeable for the top-up amount of that member, if any. The responsible member will typically be the ultimate parent. See MTT61040 (https://www.gov.uk/hmrc-internal-manuals/multinational-top-up-tax-and-domestic-top-up-tax/mtt61040) for guidance on attributing top-up amounts to responsible members.

In some cases, there will be no responsible member to charge a top-up amount. That amount becomes an untaxed amount and will be brought into charge under the Undertaxed Profits Rule. See MTT62000 (https://www.gov.uk/hmrc-internal-manuals/multinational-top-up-tax-and-domestic-top-up-tax/mtt62000) for guidance on the Undertaxed Profits Rule.

De minimis election

Where the de minimis election applies, the total top-up amount for a territory is treated as being nil. See MTT30100 (https://www.gov.uk/hmrc-internal-manuals/multinational-top-up-tax-and-domestic-top-up-tax/mtt30100) for further guidance.

Investment entities

Top-up amounts for investment entities are calculated under separate rules, in accordance with section 220 of the Act. See MTT45120 (https://www.gov.uk/hmrc-internal-manuals/multinational-top-up-tax-and-domestic-top-up-tax/mtt45120) for further guidance.

Minority owned members

The top-up amounts of minority owned members are calculated in the same way as they are for standard members, but they are calculated separately to the top-up amounts for standard members.

See MTT41510 (https://www.gov.uk/hmrc-internal-manuals/multinational-top-up-tax-and-domestic-top-up-tax/mtt41510) for further guidance on minority owned members.

Joint venture groups

The top-up amounts are determined for members of a joint venture group as though it was a separate group. Amounts are then attributed to responsible members as they are with members of the multinational group.

Domestic Top-up Tax

The mechanism for allocating the top-up amount of a territory to each member is different for DTT compared to MTT. This alternate method allocates amounts to members in proportion to their respective contributions to the total top-up amount for the territory.

Under DTT, when determining the top-up amount of a standard member that is a qualifying entity, top-up amounts and additional top-up amounts of investment entities in the UK are to be included in the total top-up amount for the territory.

This is because investment entities cannot be qualifying entities for DTT purposes, so top-up amounts are allocated to the standard members. Where there are no standard members in the UK, DTT top-up amounts of investment entities are not brought into charge.

See MTT31100 (https://www.gov.uk/hmrc-internal-manuals/multinational-top-up-tax-and-domestic-top-up-tax/mtt31100) for further guidance.

Additional top-up amounts

An additional top-up amount can arise in two different scenarios:
- where there is a negative covered tax balance that exceeds 15% of a loss in the adjusted profits, or
- where a recalculation of a prior period results in an increase to the top-up tax for that period.
See MTT33000+ (https://www.gov.uk/hmrc-internal-manuals/multinational-top-up-tax-and-domestic-top-up-tax/mtt33000) for guidance on additional top-up amounts.