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

CHAPTER 7 - TAX NEUTRALITY AND DISTRIBUTION REGIMES  

PART 7-6 - TAXABLE DISTRIBUTION METHOD ELECTION  

SECTION 7-160   MEANING OF UNDISTRIBUTED NET GloBE INCOME ACCOUNT  

7-160(1)    
This section applies if:

(a)    an election under subsection 7-145(1) applies to:

(i) an Investment Entity that is a Constituent Entity of an MNE Group; and

(ii) a Fiscal Year (the tested year ); and

(b)    the Investment Entity has GloBE Income for the tested year.

7-160(2)    
At the end of the tested year, an Undistributed Net GloBE Income Account is established for the Investment Entity for the tested year.

7-160(3)    
At the end of the tested year, the balance of the Undistributed Net GloBE Income Account is the Investment Entity ' s GloBE Income for the tested year, reduced (but not below zero) by applying the following against that balance:

(a)    the Investment Entity ' s Covered Taxes (if any) for the tested year;

(b)    distributions and deemed distributions in the tested year to shareholders other than Constituent Entities that are Investment Entities.

7-160(4)    
For the purposes of subsection (5) , this subsection covers a Fiscal Year if the Fiscal Year is the first, second or third Fiscal Year after the tested year.

7-160(5)    
At the end of a Fiscal Year covered by subsection (4) , reduce the balance of the Undistributed Net GloBE Income Account for the Investment Entity for the tested year (but not below zero) by applying the following against that balance:

(a)    the Investment Entity ' s Covered Taxes (if any) for the Fiscal Year;

(b)    distributions and deemed distributions in the Fiscal Year to shareholders other than Constituent Entities that are Investment Entities;

(c)    if the Investment Entity has a GloBE Loss for the Fiscal Year - the GloBE Loss;

(d)    if the Investment Entity has a GloBE Loss for a previous Fiscal Year covered by subsection (3) - the GloBE Loss, to the extent that it has not been applied under a previous operation of paragraph (c) or this paragraph.

7-160(6)    
For the purposes of subsection (5) :

(a)    apply an amount mentioned in paragraph (5)(a) before applying an amount mentioned in paragraph (5)(b) ; and

(b)    apply an amount mentioned in paragraph (5)(b) before applying an amount mentioned in paragraph (5)(c) ; and

(c)    apply an amount mentioned in paragraph (5)(c) before applying an amount mentioned in paragraph (5)(d) .

7-160(7)    
For the purposes of paragraph (5)(d) , apply a GloBE Loss for an earlier Fiscal Year before applying a GloBE Loss for a later Fiscal Year.