UK Introduces draft of side-by-side Package and Amendments to Multinational top-up tax and Domestic top-up tax

MNE groups with UK constituent entities should assess whether their ultimate parent jurisdiction qualifies for the SbS or UPE Safe Harbour and evaluate the resulting impact on their UK Pillar Two obligations. SW recommends reviewing group structures against the eligibility criteria for the new safe harbours, monitoring the OECD’s Central Record of qualifying jurisdictions, and conducting a comprehensive assessment of the technical amendments, particularly those affecting cross-border tax allocation, the de minimis election, and reference-territory calculations. As most of the technical amendments apply to accounting periods beginning on or after 31 December 2026, businesses should incorporate the necessary system and data updates into their compliance plans well in advance while continuing to monitor the progress of the draft legislation through Finance Bill 2026.