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

CHAPTER 7 - TAX NEUTRALITY AND DISTRIBUTION REGIMES  

PART 7-3 - ELIGIBLE DISTRIBUTION TAX SYSTEMS  

Note:

SECTION 7-50   EFFECT OF ELECTION - AMOUNT IN RESPECT OF DEEMED DISTRIBUTION TAX ADDED TO ADJUSTED COVERED TAXES  

7-50(1)    
This section applies if an election under subsection 7-40(1) applies to:

(a)    a jurisdiction that has an Eligible Distribution Tax System; and

(b)    Constituent Entities of an MNE Group that are located in the jurisdiction; and

(c)    a Fiscal Year.

7-50(2)    
For the purposes of paragraph 5-5(2)(a) , increase the sum of the Adjusted Covered Taxes for the Fiscal Year of each Constituent Entity of the MNE Group located in the jurisdiction by the lesser of the following:

(a)    the amount by which that sum would need to be increased to raise the Effective Tax Rate of the MNE Group for the jurisdiction for the Fiscal Year to the Minimum Rate;

(b)    the amount of Tax that would have been due under the Eligible Distribution Tax System if the Constituent Entities of the MNE Group located in the jurisdiction had distributed all of their income that was subject to the Eligible Distribution Tax System during the Fiscal Year.

7-50(3)    
At the end of the Fiscal Year:

(a)    a Deemed Distribution Tax Recapture Account is established for the Fiscal Year for the jurisdiction for the MNE Group; and

(b)    the balance of the Deemed Distribution Tax Recapture Account is the amount of the increase under subsection (2) .