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

CHAPTER 3 - COMPUTATION OF GloBE INCOME OR LOSS  

PART 3-3 - INTERNATIONAL SHIPPING INCOME EXCLUSION  

SECTION 3-230   MEANING OF QUALIFIED ANCILLARY INTERNATIONAL SHIPPING INCOME, ETC.  

3-230(1)    
The Qualified Ancillary International Shipping Income of a Constituent Entity of an MNE Group located in a jurisdiction for a Fiscal Year is:

(a)    if paragraphs (b) and (c) do not apply - the Constituent Entity ' s Ancillary International Shipping Income for the Fiscal Year ( CE ' s AISI ); or

(b)    if one, but not the other, of the following numbers is a negative number - zero:

(i) the aggregate of the amounts of Ancillary International Shipping Income of each Constituent Entity of the MNE Group that is located in the jurisdiction ( Aggregate AISI );

(ii) the aggregate of the amounts of International Shipping Income of those Constituent Entities ( Aggregate ISI ); or

(c)    if paragraph (b) does not apply and the absolute value of Aggregate AISI is greater than 50% of the absolute value of Aggregate ISI - the amount computed in accordance with the following formula:

CE ' s AISI	×	Cap
Aggregate AISI

where:

Aggregate AISI
and CE ' s AISI
have the same meanings as in paragraphs (a) and (b) .

Cap
means Aggregate ISI multiplied by 50%.

3-230(2)    
The Ancillary International Shipping Income of a Constituent Entity of an MNE Group for a Fiscal Year is:

(a)    the Constituent Entity ' s Ancillary International Shipping Income Revenue for the Fiscal Year;

reduced by:

(b)    the Constituent Entity ' s Ancillary International Shipping Income Costs for the Fiscal Year.

3-230(3)    
The Ancillary International Shipping Income Revenue of a Constituent Entity of an MNE Group for a Fiscal Year means the revenue obtained by the Constituent Entity for the Fiscal Year from the following activities, to the extent they are performed primarily in connection with transporting passengers or cargo by ships in international traffic (each an Ancillary International Shipping Activity ):

(a)    leasing a ship on a bareboat charter basis to another shipping enterprise that is not a Constituent Entity of the MNE Group, if the charter:

(i) does not exceed 3 years; and

(ii) is not part of a series of leases, or leases and other transactions, that result in the charter being in effect for an aggregate period exceeding 3 years;

(b)    selling tickets issued by other shipping enterprises for the domestic leg of an international voyage;

(c)    leasing and short-term storage of a container (including levying detention charges for the late return of a container);

(d)    providing services to other shipping enterprises by engineers, maintenance staff, cargo handlers, catering staff, and customer services personnel;

(e)    investing, where the investment that generates the income is made as an integral part of the carrying on the business of operating the ships in international traffic.

3-230(4)    
The Ancillary International Shipping Income Costs , of a Constituent Entity for a Fiscal Year, means the amount computed in accordance with the following formula:

where:

direct costs
is the total costs incurred by the Constituent Entity for the Fiscal Year that are directly attributable to the Constituent Entity ' s performance of Ancillary International Shipping Activities.

indirect costs
is the total costs incurred by the Constituent Entity for the Fiscal Year that are indirectly attributable to the Constituent Entity ' s performance of Ancillary International Shipping Activities.

shipping revenue
is the Constituent Entity ' s Ancillary International Shipping Income Revenue for the Fiscal Year.

total revenue
is the Constituent Entity ' s total revenue for the Fiscal Year.