Taxation (Multinational - Global and Domestic Minimum Tax) Rules 2024

CHAPTER 3 - COMPUTATION OF GloBE INCOME OR LOSS  

PART 3-2 - ADJUSTMENTS TO DETERMINE GloBE INCOME OR LOSS  

Division 2 - Other Article 3.2 adjustments  

SECTION 3-100   ADJUSTMENT - ARM ' S LENGTH PRINCIPLE AND TRANSACTIONS BETWEEN CONSTITUENT ENTITIES LOCATED IN THE SAME JURISDICTION  

3-100(1)    
In computing the GloBE Income or Loss of a Constituent Entity of an MNE Group for a Fiscal Year, adjust the Constituent Entity ' s Financial Accounting Net Income or Loss for the Fiscal Year in accordance with the following subsections.

3-100(2)    
Subsection (3) applies if:

(a)    the amount of a transaction that is between Constituent Entities of the MNE Group that are located in the same jurisdiction:

(i) is not recorded in the financial accounts of both Constituent Entities in the same amount; or

(ii) is not recorded in the financial accounts of both Constituent Entities consistently with the Arm ' s Length Principle; or

(iii) is not recorded at all in the financial accounts of both Constituent Entities; and

(b)    if subparagraph (a)(ii) applies - any of the following conditions are satisfied:

(i) the transaction is a sale or other transfer of an asset, that gives rise to a loss that is included in the computation of the GloBE Income or Loss of one of the Constituent Entities;

(ii) one of the Constituent Entities is an Investment Entity or Insurance Investment Entity, but the other is not;

(iii) one of the Constituent Entities is a Minority-Owned Constituent Entity, but the other is not.

3-100(3)    
For the purposes of subsection (1) , adjust the amount in which the transaction is recorded in the financial accounts of each Constituent Entity so as to be consistent with the Arm ' s Length Principle.

Note:

Part 3-4 sets out rules for allocating income or loss between a Main Entity and its Permanent Establishments.