Section 266 | Qualifying entities

(1)An entity which is not a member of a joint venture group is qualifying for an accounting period if it is not a DTT excluded entity ..., it meets condition A for that period and—^F1F2

(a)if it is not a member of a group, it meets condition B for that period, or

(b)if it is a member of a group, it meets condition C for that period.

(1A)A member of a joint venture group is a qualifying entity for an accounting period if—^F3

(a)the member is not a DTT excluded entity,^F3

(b)the member meets condition A for that period, and^F3

(c)the revenue condition is met in relation to the group for that period.^F3

(1B)For the purposes of subsection (1A) the “revenue condition” is met in relation to a joint venture group for an accounting period if—^F3

(a)a single entity which directly or indirectly holds at least 50% of the ownership interests in the joint venture parent meets Condition A and Condition B for that period, or^F3

(b)the members of a group (the “relevant group”) whose ultimate parent directly or indirectly holds at least 50% of the ownership interests in the joint venture parent meet Condition C for that period and—^F3

(i)all of those members are located in the United Kingdom, or^F3

(ii)the relevant group is a multinational group (see section 126 in Part 3), and at least one of the members is located in a Pillar Two territory.^F3

(2)Condition A is met by an entity for an accounting period if it is located in the United Kingdom in that period (see section 239 in Part 3).

(3)Condition B is met by an entity for an accounting period if the entity has revenue that exceeds the threshold set out in subsection (6) in at least 2 previous accounting periods of the previous 4 accounting periods.

(4)For the purposes of condition B, the revenue of an entity that is not a member of a group is to be determined by reference to its qualifying financial statements.

(5)Condition C is met by a member of a group for an accounting period if the members of the group have revenue that exceeds the threshold set out in subsection (6) in at least 2 previous accounting periods of the previous 4 accounting periods.

(6)The threshold for an accounting period is the amount given by multiplying 750 million euros by the amount given by dividing the number of days in the accounting period by 365.

(7)For the purposes of condition C, the revenue of the members of a group for a period is to be determined by reference to the consolidated financial statements of the ultimate parent for that period (see sections 126(2) and 249 in Part 3).

(8)Sections 130 and 131 in Part 3 (change in composition of multinational groups) apply for the purpose of Condition C as if—

(a)references to “multinational group” were to “group”,

(b)in section 130—

(i)in subsection (1), for “condition A in section 129(2)” there were substituted “condition C in section 266(5)”,

(ii)in subsection (4), for “section 129(4)” there were substituted “section 266(6)”,

(c)in section 131(1)—

(i)for “section 129” there were substituted “section 266”,

(ii)for “subsection (2)” there were substituted “subsection (5)”,

(iii)for “condition A” there were substituted “condition C”, and

(iv)for “section 129(4)” there were substituted “section 266(6), and

(d)in section 131(2), for “condition A in section 129(2)” there were substituted “condition C in section 266(5)”

(9)References in this Part to a “group” (other than in the expression “multinational group”) means a consolidated group (see section 126(2) in Part 3).

(10)For the purposes of this Part “qualifying financial statements” in relation to an entity means—

(a)financial statements of the entity prepared in accordance with acceptable accounting standards, or

(b)where no such accounts were prepared, the statements that would have been prepared (whether or not the entity was required to prepare such statements) in accordance with an authorised accounting standard that is either—

(i)an acceptable accounting standard, or

(ii)a financial accounting standard whose application is adjusted to prevent material competitive distortions (see section 249(4)).