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 3-190   MEANING OF LOW-TAX ENTITY AND HIGH-TAX COUNTERPARTY  

3-190(1)    
A Constituent Entity of an MNE Group is a Low-Tax Entity for a Fiscal Year if:

(a)    the Constituent Entity is located in a jurisdiction for the Fiscal Year; and

(b)    the jurisdiction:

(i) is a Low-Tax Jurisdiction in respect of the MNE Group for the Fiscal Year; or

(ii) would be a Low-Tax Jurisdiction in respect of the MNE Group for the Fiscal Year if the Effective Tax Rate of the MNE Group for the jurisdiction for the Fiscal Year were determined without regard to any income or expense accrued by the Constituent Entity in respect of an Intragroup Financing Arrangement.

3-190(2)    
A Constituent Entity of an MNE Group is a High-Tax Counterparty for a Fiscal Year if:

(a)    the Constituent Entity is located in a jurisdiction for the Fiscal Year; and

(b)    the jurisdiction:

(i) is not a Low-Tax Jurisdiction in respect of the MNE Group for the Fiscal Year; or

(ii) would not be a Low-Tax Jurisdiction in respect of the MNE Group for the Fiscal Year if the Effective Tax Rate of the MNE Group for the jurisdiction for the Fiscal Year were determined without regard to any income or expense accrued by the Constituent Entity in respect of an Intragroup Financing Arrangement.