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

CHAPTER 3 - COMPUTATION OF GloBE INCOME OR LOSS  

PART 3-4 - ALLOCATION OF INCOME OR LOSS BETWEEN A MAIN ENTITY AND A PERMANENT ESTABLISHMENT  

SECTION 3-240   MEANING OF FINANCIAL ACCOUNTING NET INCOME OR LOSS - PERMANENT ESTABLISHMENT  

3-240(1)    
If a Constituent Entity is a Permanent Establishment because of paragraph 19(1)(a) , (b) or (c) of the Act, the Financial Accounting Net Income or Loss for a Fiscal Year of the Constituent Entity is:

(a)    the net income or loss reflected in the separate financial accounts of the Permanent Establishment, if those financial accounts are prepared in accordance with an Acceptable Financial Accounting Standard, or in accordance with an Authorised Financial Accounting Standard and subject to adjustments to prevent any Material Competitive Distortions; or

(b)    if the Permanent Establishment does not have separate financial accounts described in paragraph (a) of this subsection - the amount that would be the net income or loss of that Permanent Establishment reflected in separate financial accounts prepared on a standalone basis in accordance with the accounting standard used in the preparation of the Consolidated Financial Statements of the Ultimate Parent Entity.

3-240(2)    
If a Constituent Entity is a Permanent Establishment because of paragraph 19(1)(d) of the Act, the Financial Accounting Net Income or Loss for a Fiscal Year of the Constituent Entity is the net income or loss of that Permanent Establishment computed on the assumptions that:

(a)    the only income of the Permanent Establishment is its income that:

(i) is exempted from Tax in the jurisdiction in which the Main Entity in respect of the Permanent Establishment is located; and

(ii) is attributable to operations conducted or activities carried on outside the jurisdiction in which the Main Entity is located; and

(b)    the only expenses of the Permanent Establishment are its expenses that:

(i) are attributable to the operations described in subparagraph (a)(ii) of this subsection; and

(ii) are not deducted for tax purposes in the jurisdiction in which the Main Entity is located.