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

PART 5 - INTERPRETATION  

Division 3 - Ownership Interests and Ownership Interest Percentages  

SECTION 39   MEANINGS OF OWNERSHIP INTEREST PERCENTAGE, DIRECT OWNERSHIP INTEREST PERCENTAGE AND INDIRECT OWNERSHIP INTEREST PERCENTAGE  

39(1)    
The Ownership Interest Percentage of an Entity (the holding entity ) in another Entity (the test entity ) is equal to the sum of:

(a)    the holding entity ' s Direct Ownership Interest Percentage in the test Entity; and

(b)    the holding entity ' s Indirect Ownership Interest Percentages in the test Entity.

39(2)    
Compute the Direct Ownership Interest Percentage of an Entity (the holding entity ) in another Entity (the test entity ) as follows:

(a)    compute the following:

(i) the profits of the test entity (the relevant test entity profits ) to which holders of Direct Ownership Interests in the test entity are entitled;

(ii) the capital of the test entity (the relevant test entity capital ) to which holders of Direct Ownership Interests in the test entity are entitled;

(iii) the reserves of the test entity (the relevant test entity reserves ) to which holders of Direct Ownership Interests in the test entity are entitled;

(b)    compute the sum of the following:

(i) the percentage of the relevant test entity profits to which the holding entity is entitled because of the Direct Ownership Interests that it holds in the test entity;

(ii) the percentage of the relevant test entity capital to which the holding entity is entitled because of the Direct Ownership Interests that it holds in the test entity;

(iii) the percentage of the relevant test entity reserves to which the holding entity is entitled because of the Direct Ownership Interests that it holds in the test entity;

(c)    if the test Entity issued Direct Ownership Interests that give rise to only 1 of the kinds of entitlement mentioned in subparagraphs (a)(i) , (ii) and (iii) - the Direct Ownership Interest Percentage is the result of paragraph (b) ;

(d)    if the test Entity issued Direct Ownership Interests that give rise to only 2 of those kinds of entitlement - the Direct Ownership Interest Percentage is the result of paragraph (b) divided by 2;

(e)    if the test Entity issued Direct Ownership Interests that give rise to all 3 of those kinds of entitlement - the Direct Ownership Interest Percentage is the result of paragraph (b) divided by 3.

39(3)    
Compute the Indirect Ownership Interest Percentage of an Entity (the holding entity ) in another Entity (the test entity ) by multiplying:

(a)    the holding entity ' s Direct Ownership Interest Percentage in another Entity (the intermediate entity ) at that time;

by:

(b)    the sum of:

(i) the intermediate entity ' s Direct Ownership Interest Percentage in the test entity; and

(ii) the intermediate entity ' s Indirect Ownership Interest Percentage in the test entity (as worked out under one or more other applications of this section).

39(4)    
Despite subsection (3) , if there is more than one intermediate entity to which paragraph (3)(a) applies, the holding entity ' s Indirect Ownership Interest Percentage in the test entity is the sum of the percentages worked out under subsection (3) in relation to each of those intermediate entities.

39(5)    
Treat a reference in this section to an Entity as being a reference to an Entity or a Permanent Establishment (unless the Entity is a holding entity mentioned in this section).

39(6)    
Subsection (7) applies if, as a result of subsection (5) :

(a)    the holding entity mentioned in subsection (2) is the Main Entity in respect of a Permanent Establishment; and

(b)    the test entity mentioned in subsection (2) is the Permanent Establishment.

Note:

The Main Entity is taken to hold a Direct Ownership Interest in the Permanent Establishment: see subsection 38(4) .

39(7)    
Despite subsection (2) , treat the holding entity ' s Direct Ownership Interest Percentage in the test entity as being 100%.