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

CHAPTER 7 - TAX NEUTRALITY AND DISTRIBUTION REGIMES  

PART 7-2 - ULTIMATE PARENT ENTITY SUBJECT TO DEDUCTIBLE DIVIDEND REGIME  

SECTION 7-25   ULTIMATE PARENT ENTITY SUBJECT TO DEDUCTIBLE DIVIDEND REGIME - REDUCE GloBE INCOME AND COVERED TAXES OF OTHER CONSTITUENT ENTITIES  

7-25(1)    
This section applies if:

(a)    the Ultimate Parent Entity of an MNE Group is subject to a Deductible Dividend Regime; and

(b)    the Ultimate Parent Entity holds:

(i) a Direct Ownership Interest in a Constituent Entity of the MNE Group; or

(ii) an Indirect Ownership Interest in a Constituent Entity of the MNE Group through a chain of other Constituent Entities of the MNE Group; and

(c)    the Constituent Entity is (or all of the Constituent Entities in the chain are) subject to the Deductible Dividend Regime; and

(d)    the Constituent Entity is (or all of the Constituent Entities in the chain are) located in the same jurisdiction as the Ultimate Parent Entity.

7-25(2)    
Subsection (3) applies if:

(a)    the Constituent Entity distributes an amount (the dividend amount ) in respect of its GloBE Income for a Fiscal Year as a Deductible Dividend within 12 months after the end of the Fiscal Year; and

(b)    the Constituent Entity distributes some or all of the dividend amount to the Ultimate Parent Entity (directly or through the chain); and

(c)    the Ultimate Parent Entity distributes some or all of the dividend amount as a Deductible Dividend within 12 months after the end of the Fiscal Year; and

(d)    the condition in paragraph 7-20(2)(a) , (b) or (c) is satisfied in relation to the recipient of the dividend distributed by the Ultimate Parent Entity.

7-25(3)    
Subsections 7-20(2) , (3) , (4) , (5) , (6) and (7) apply to the Constituent Entity in the same way that they apply to an Ultimate Parent Entity.