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

CHAPTER 2 - LIABILITY AMOUNTS  

PART 2-4 - DOMESTIC TOP-UP TAX AMOUNT  

SECTION 2-35   COMPUTING TOP-UP TAX FOR THE PURPOSES OF SECTION 2-30 - PRINCIPLES  

2-35(1)    
This section sets out principles for the purposes of section 2-30 .

2-35(2)    
Assume that the amount of Domestic Top-up Tax referred to in section 5-30 , for the Fiscal Year mentioned in subsection 2-25(1) or (5) , were zero.

2-35(3)    

If a Constituent Entity of an MNE Group is a Securitisation Entity for a Fiscal Year:

(a)    treat the GloBE Income of the Constituent Entity for the Fiscal Year as being zero for the purposes of the following:

(i) the definition of Aggregate GloBE Income of all CEs in subsection 5-40(2) ;

(ii) the definition of Aggregate GloBE Income of all CEs for prior year in subsection 5-40(5) (including that definition as it applies for the purposes of subsection 5-40(7) );

(iii) the definition of GloBE Income of the CE in subsection 5-40(2) ;

(iv) the definition of GloBE Income of the CE for prior year in subsection 5-40(5) (including that definition as it applies for the purposes of subsection 5-40(7) ); and

(b)    for those purposes, do not apply paragraph 5-40(7)(b) in relation to the GloBE Income of the Constituent Entity for the Fiscal Year.

2-35(4)    
Subsection (3) does not apply if the only Constituent Entities of the MNE Group that are located in Australia are Securitisation Entities.

2-35(5)    

If subsection (3) applies and no Constituent Entity of the MNE Group that is located in Australia and is not a Securitisation Entity has GloBE Income for the Fiscal Year:

(a)    treat the GloBE Income of each such Constituent Entity as being one Euro for the Fiscal Year, for the purposes of the following:

(i) the definition of Aggregate GloBE Income of all CEs in subsection 5-40(2) ;

(ii) the definition of Aggregate GloBE Income of all CEs for prior year in subsection 5-40(5) (including that definition as it applies for the purposes of subsection 5-40(7) );

(iii) the definition of GloBE Income of the CE in subsection 5-40(2) ;

(iv) the definition of GloBE Income of the CE for prior year in subsection 5-40(5) (including that definition as it applies for the purposes of subsection 5-40(7) ); and

(b)    for those purposes, do not apply paragraph 5-40(7)(b) in relation to the GloBE Income of the Constituent Entity for the Fiscal Year.

2-35(6)    
Assume that the following provisions did not apply in relation to the allocation of an amount in respect of Covered Taxes to a Constituent Entity covered by subsection (7) :

(a)    section 4-45 (Allocation of amounts from Constituent Entity to Permanent Establishment);

(b)    section 4-55 (Allocation of amounts from Constituent Entity-owner to CFC);

(c)    section 4-65 (Allocation of amounts from Constituent Entity-owner to Hybrid Entity or Reverse Hybrid Entity);

(d)    

section 4-70 (Amounts accrued in financial accounts of Constituent Entity-owner on distribution from Constituent Entity to Constituent Entity-owner - allocation to Constituent Entity), unless the amount in respect of Covered Taxes is an amount in respect of withholding tax (within the meaning of the Income Tax Assessment Act 1997 ).

2-35(7)    
For the purposes of subsection (6) , this subsection covers any of the following:

(a)    a Constituent Entity that is located in Australia;

(b)    a Constituent Entity that is a Stateless Constituent Entity 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.

2-35(8)    
Assume that section 4-75 (Allocation of amounts in respect of Passive Income) were omitted.