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

CHAPTER 2 - LIABILITY AMOUNTS  

PART 2-4 - DOMESTIC TOP-UP TAX AMOUNT  

SECTION 2-25   MEANING OF DOMESTIC TOP-UP TAX AMOUNT  
Constituent Entities generally

2-25(1)    
Subsection (2) applies if a Low-Taxed Constituent Entity for a Fiscal Year of an Applicable MNE Group for the Fiscal Year:

(a)    is located in Australia for the Fiscal Year; or

(b)    is a Stateless Constituent Entity of the Applicable MNE Group that:

(i) is created in Australia; or

(ii) is a Stateless Constituent Entity under subsection 41(3) or 42(3) of the Act; or

(iii) is a Permanent Establishment in relation to which paragraph 19(1)(d) of the Act applies, and is a place of business (including a deemed place of business) in Australia.

2-25(2)    
The Low-Taxed Constituent Entity has a Domestic Top-up Tax Amount for the Fiscal Year if it has Top-up Tax for the Fiscal Year.

Note:

If the Low-Taxed Constituent Entity is a Securitisation Entity, its Domestic Top-up Tax Amount for the Fiscal Year will be zero (see subsection 2-35(3) ) unless the only Constituent Entities of the MNE Group located in Australia are Securitisation Entities (see subsection 2-35(4) ).

Permanent Establishments

2-25(3)    
Subsection (4) applies if:

(a)    a Low-Taxed Constituent Entity for a Fiscal Year of an Applicable MNE Group for the Fiscal Year is a Permanent Establishment of a Main Entity; and

(b)    the Low-Taxed Constituent Entity is located in Australia for the Fiscal Year; and

(c)    the Main Entity is not located in Australia for the Fiscal Year.

2-25(4)    
If the Low-Taxed Constituent Entity has Top-up Tax for the Fiscal Year:

(a)    despite subsection (2) , the Low-Taxed Constituent Entity does not have a Domestic Top-up Tax Amount for the Fiscal Year; and

(b)    the Main Entity has a Domestic Top-up Tax Amount for the Fiscal Year in respect of the Low-Taxed Constituent Entity.

Joint Ventures and JV Subsidiaries

2-25(5)    
Subsection (6) applies if:

(a)    a Joint Venture of an MNE Group, or a JV Subsidiary of a Joint Venture of an MNE Group, is located in Australia for a Fiscal Year; and

(b)    the MNE Group is an Applicable MNE Group for the Fiscal Year; and

(c)    the Joint Venture, or the JV Subsidiary, is a Low-Taxed Constituent Entity for the Fiscal Year.

Note:

For the purposes of determining whether a Joint Venture or its JV Subsidiaries are Low-Taxed Constituent Entities, treat them as comprising a separate MNE Group, of which the Joint Venture is the Ultimate Parent Entity: see paragraph 6-75(3)(b) .

2-25(6)    
The Joint Venture, or the JV Subsidiary, has a Domestic Top-up Tax Amount for the Fiscal Year if it has Top-up Tax for the Fiscal Year.

2-25(7)    
Subsection (8) applies if:

(a)    a JV Subsidiary of a Joint Venture of an MNE Group is a Permanent Establishment of a Main Entity that is:

(i) the Joint Venture; or

(ii) another JV Subsidiary of the Joint Venture; and

(b)    the JV Subsidiary is a Low-Taxed Constituent Entity for the Fiscal Year; and

(c)    the JV Subsidiary is located in Australia for the Fiscal Year; and

(d)    the Main Entity is not located in Australia for the Fiscal Year.

2-25(8)    
If the JV Subsidiary has Top-up Tax for the Fiscal Year:

(a)    despite subsection (6) , the JV Subsidiary does not have a Domestic Top-up Tax Amount for the Fiscal Year; and

(b)    the Main Entity has a Domestic Top-up Tax Amount for the Fiscal Year in respect of the JV Subsidiary.