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

CHAPTER 8 - ADMINISTRATION AND SAFE HARBOURS  

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PART 8-2 - SAFE HARBOURS  

Division 2 - Transitional CbCR Safe Harbour  

Subdivision F - Special rules for particular circumstances  

SECTION 8-95   TRANSITIONAL CbCR SAFE HARBOUR - SPECIAL RULES FOR INVESTMENT ENTITIES AND THEIR CONSTITUENT ENTITY-OWNERS  

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8-95(1)    
Subsections (3) , (4) and (5) apply in relation to a Fiscal Year if:

(a)    one or more Constituent Entities of an MNE Group that are Investment Entities are CbCR Residents of a jurisdiction for the Fiscal Year; and

(b)    subsection (6) does not apply in relation to the Investment Entities and the Fiscal Year.

8-95(2)    
Subsections (3) , (4) and (6) apply in relation to a Fiscal Year if:

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

(b)    all of the following are satisfied in relation to the Investment Entity:


(i) an election under subsection 7-125(1) (Investment Entity Transparency Election) does not apply to the Investment Entity and the Fiscal Year;

(ii) an election under subsection 7-145(1) (Taxable Distribution Method Election) does not apply to the Investment Entity and the Fiscal Year;

(iii) each Constituent Entity-owner of the Investment Entity is a CbCR Resident of the same jurisdiction as the Investment Entity; and

(c)    subsection 8-10(1) applies in relation to the MNE Group, the jurisdiction and the Fiscal Year.

Allocation of amounts between Investment Entity and Constituent Entity-owner

8-95(3)    
For the purposes of section 8-10 , apply the principles in subsection (4) of this section in computing the MNE Group ' s:

(a)    Profit (Loss) before Income Tax; and

(b)    Total Revenue; and

(c)    Simplified Covered Taxes;

for the Fiscal Year for each of the following jurisdictions (the relevant jurisdictions ):

(d)    each jurisdiction of which an Investment Entity mentioned in subsection (1) or (2) is a CbCR Resident;

(e)    each jurisdiction of which a Constituent Entity-owner of an Investment Entity mentioned in subsection (1) or (2) is a CbCR Resident.

8-95(4)    
For the purposes of subsection (3) , the principles are as follows:

(a)    include an amount of each Investment Entity ' s profit or loss before income tax for the Fiscal Year in the profit or loss before income tax for the Fiscal Year of each Constituent Entity-owner of the Investment Entity in proportion to the Ownership Interests in the Investment Entity held by the Constituent Entity-owner;

(b)    include an amount of each Investment Entity ' s total revenues for the Fiscal Year in the total revenues for the Fiscal Year of each Constituent Entity-owner of the Investment Entity in proportion to the Ownership Interests in the Investment Entity held by the Constituent Entity-owner;

(c)    include an amount of each Investment Entity ' s associated taxes for the Fiscal Year in the associated taxes for the Fiscal Year of each Constituent Entity-owner of the Investment Entity in proportion to the Ownership Interests in the Investment Entity held by the Constituent Entity-owner;

(d)    exclude so much of each Investment Entity ' s profit or loss before income tax, total revenues and associated taxes for the Fiscal Year as is attributable to Direct Ownership Interests in the Investment Entity that are held by Entities that are not Group Entities of the MNE Group;

(e)    adjust the MNE Group ' s Profit (Loss) before Income Tax, Total Revenue and Simplified Covered Taxes for the relevant jurisdictions as necessary to ensure that the income and associated taxes of each Investment Entity are only taken into account in the jurisdiction where the Constituent Entity-owner is a CbCR Resident for the Fiscal Year.

Computing Investment Entity Top-up Tax - Main case

8-95(5)    
If section 8-10 applies in relation to the MNE Group, the jurisdictions in which the Investment Entities are located, and the Fiscal Year, compute the Top-up Tax of the Investment Entities for the Fiscal Year in accordance with Parts 7-4 , 7-5 and 7-6 and in doing so:

(a)    disregard section 8-10 ; and

(b)    take into account amounts only to the extent that they are attributable to the Investment Entities.

Computing Investment Entity Top-up Tax - Co-location with Constituent Entity-owner

8-95(6)    
For the purposes of section 8-10 , treat the Investment Entity as being a Constituent Entity of the MNE Group that is not an Investment Entity.

Interpretation

8-95(7)    
For the purposes of this section, treat an Insurance Investment Entity as if it were an Investment Entity.

8-95(8)    
For the purposes of this section, treat each reference to a Constituent Entity-owner of an Investment Entity as only including Constituent Entity-owners that hold a Direct Ownership Interest in the Investment Entity.

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