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

CHAPTER 6 - CORPORATE RESTRUCTURINGS AND HOLDING STRUCTURES  

PART 6-4 - JOINT VENTURES  

SECTION 6-75   JOINT VENTURES  

6-75(1)    
This section applies to a Joint Venture of an MNE Group (the actual group ) and its JV Subsidiaries (if any).

6-75(2)    
For the purposes mentioned in subsection (3) :

(a)    treat the Joint Venture and its JV Subsidiaries (each of which is a JV Entity ) as Constituent Entities that comprise a separate MNE Group (the deemed group ); and

(b)    treat the Joint Venture as the Ultimate Parent Entity of the deemed group.

Note:

The JV Entities are not Constituent Entities of the actual group, as their assets, liabilities, income, expanses and cash flows are not included in the Consolidated Financial Statements of the Ultimate Parent Entity of the MNE Group. Therefore, they are not part of the actual group for which Effective Tax Rate and Jurisdictional Top-up Tax are computed.

6-75(3)    
The purposes are as follows:

(a)    computing the Top-up Tax of the JV Entities;

(b)    determining whether each of the JV Entities is a Low-Taxed Constituent Entity.

Note 1:

For paragraph (a) , to compute the Top-up Tax of a JV Entity, it is necessary to compute the Effective Tax Rate and Jurisdictional Top-up Tax of the deemed group for the jurisdiction in which it is located.

Note 2:

The Top-up Tax of a JV Entity is used to compute:

(a) the IIR Top-up Tax Amount of a Parent Entity of the actual group that holds an ownership interest in the JV entity (see subsection 2-5(4) ); and

(b) the Domestic Top-up Tax Amount of the JV Entity (see subsections 2-25(5) to (8) ); and

(c) the Total UTPR Top-up Tax Amount of the actual group (see paragraph 2-55(1)(b) ).

Note 3:

For paragraph (b) , to determine whether a JV Entity is a Low-Taxed Constituent Entity, it is necessary to compute the Effective Tax Rate and Net GloBE Income of the deemed group for the jurisdiction in which it is located (see section 3-195 ).