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

CHAPTER 4 - COMPUTATION OF ADJUSTED COVERED TAXES  

PART 4-3 - ALLOCATION OF COVERED TAXES FROM ONE CONSTITUENT ENTITY TO ANOTHER CONSTITUENT ENTITY  

SECTION 4-75   ALLOCATION OF AMOUNTS IN RESPECT OF PASSIVE INCOME - INCLUSION IN CONSTITUENT ENTITY ' S ADJUSTED COVERED TAXES  

4-75(1)    
If an amount in respect of Covered Taxes for a Fiscal Year is allocated to a Constituent Entity of an MNE Group under section 4-55 or 4-65 in respect of Passive Income, the lesser of the following amounts is included in the Constituent Entity ' s Adjusted Covered Taxes for the Fiscal Year:

(a)    the amount in respect of Covered Taxes allocated in respect of the Passive Income;

(b)    the amount that is:

(i) the Top-up Tax Percentage for the Fiscal Year of the MNE Group for the jurisdiction in which the Constituent Entity is located (computed disregarding the amount in respect of Covered Taxes allocated to the Constituent Entity under section 4-55 or 4-65 in respect of Passive Income);

multiplied by:

(ii) the Constituent Entity ' s Passive Income for the Fiscal Year, to the extent that is includible under any Controlled Foreign Company Tax Regime or fiscal transparency rule.

4-75(2)    
If, because of subsection (1) , the amount in respect of Covered Taxes for the Fiscal Year allocated to the Constituent Entity falls short of what it would be disregarding subsection (1) , do not allocate the shortfall to the Constituent Entity under sections 4-55 or 4-65 .