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

CHAPTER 10 - DEFINITIONS  

PART 10-1 - DEFINED TERMS  

SECTION 10-5  

10-5   DEFINITIONS  

Note:

A number of expressions used in this instrument are defined in the Act, including the following:

(a) Annual Election;

(b) Constituent Entity;

(c) Entity;

(d) Fiscal Year;

(e) Five-Year Election;

(f) Main Entity;

(g) MNE Group;

(h) Ownership Interest;

(i) Permanent Establishment;

(j) Tax Treaty.

accounting functional currency
: see subsection 3-60(2) .

Accrued Current Covered Tax Expense
: see section 4-10 .

Act
means the Taxation (Multinational - Global and Domestic Minimum Tax) Act 2024 .

Additional Current Top-up Tax
: see subsection 4-30(3) , paragraph 5-95(3)(b) and paragraph 7-75(2)(c) .

Additional Tier One Capital
: see subsection 3-210(2) .

Additions to Covered Taxes
: see section 4-15 .

Adjusted Covered Taxes
: see section 4-5 .

adjusted investment amount
: see subsection 4-38(3) .

Aggregate Asset Gain
: see section 3-170 .

Allocable GloBE Income or Loss
: see subsection 7-110(1) .

Allocable Share
: see section 2-10 .

Ancillary International Shipping Activity
: see subsection 3-230(3) .

Ancillary International Shipping Income
: see subsection 3-230(2) .

Ancillary International Shipping Income Costs
: see subsection 3-230(4) .

Ancillary International Shipping Income Revenue
: see subsection 3-230(3) .

Arm ' s Length Principle
: see section 3-105 .

Average GloBE Income or Loss
: see paragraph 5-110(1)(b) .

Average GloBE Revenue
: see paragraph 5-110(1)(a) .

Blended CFC Tax Regime
: see section 4-60 .

CbCR Resident
: see section 8-65 .

Constituent Entity-owner
: if a Constituent Entity of an MNE Group holds an Ownership Interest in another Constituent Entity of the MNE Group, the Constituent Entity is a Constituent Entity-owner of the other Constituent Entity.

Controlled Foreign Company Tax Regime
means a set of tax rules (other than an IIR or any Tax equivalent to an IIR) under which an Entity located in a jurisdiction (the owner ) that holds an Ownership Interest in another Entity located in another jurisdiction (the CFC ) is subject to current taxation on its share of part or all of the income earned by the CFC, irrespective of whether that income is distributed currently to the owner.

Cooperative
means an Entity that:

(a) collectively markets or acquires goods or services on behalf of its members; and

(b) is subject to a tax regime in the jurisdiction in which it is located that is designed to ensure tax neutrality in respect of:

(i) members ' property or services sold through the cooperative; and

(ii) property or services acquired by members through the cooperative.

Country-by-Country Reporting regulations
: see subsection 8-195(2) .

Covered Taxes
: see section 4-40 .

Deductible Dividend
: see section 7-35 .

Deductible Dividend Regime
: see section 7-30 .

deduction/non-inclusion arrangement
: see section 8-120 .

Deemed Distribution Tax Recapture Account
: see subsection 7-50(3) .

De minimis test
: see section 8-20 .

Disallowed Accrual
: see subsection 4-115(1) .

Disposition Recapture Ratio
: see subsection 7-75(3) .

Disqualified Refundable Imputation Tax
means an amount of Tax, other than a Qualified Imputation Tax, accrued or paid by a Constituent Entity that is:

(a) refundable to the beneficial owner of a dividend distributed by the Constituent Entity in respect of the dividend or creditable by the beneficial owner against a tax liability other than a tax liability in respect of such dividend; or

(b) refundable to the distributing corporation upon distribution of a dividend.

Domestic Top-up Tax Amount
: see sections 2-25 and 2-30 .

Dual-listed Arrangement
: see subsection 6-85(4) .

duplicate loss arrangement
: see section 8-125 .

duplicate tax recognition arrangement
: see section 8-130 .

Effective Tax Rate
: see section 5-5 .

Eligible Distribution Tax System
: see section 7-45 .

Eligible Employee
: see subsection 5-60(2) .

Eligible Payroll Costs
: see subsection 5-60(1) .

Eligible Tangible Asset
: see section 5-75 .

ETR Adjustment Provision
: see subsection 5-95(6) .

Excess Negative Tax Expense Carry-forward
: see subparagraphs 4-35(3)(a)(i) and 5-10(3)(a)(i) .

Excess Profit
: see section 5-25 .

Excluded Dividends
: see subsections 3-25(1) and (2) .

Excluded Equity Gain or Loss
: see subsection 3-35(1) .

Excluded Exempt Income Entity
: see subsection 1-20(2) .

Excluded Non-Profit Subsidiary
: see subsection 1-20(3) .

Financial Accounting Net Income or Loss
: see sections 3-10 and 3-240 .

Flow-through Entity
: see section 10-30 .

GloBE Implementation Framework
: see section 10-10 .

GloBE Income
: if the GloBE Income or Loss of a Constituent Entity of an MNE Group for a Fiscal Year is a positive amount, the Constituent Entity ' s GloBE Income for the Fiscal Year is that amount.

GloBE Income or Loss
: see section 3-5 .

Note:

The GloBE Income or Loss could be a positive or negative amount.

GloBE Loss
: if the GloBE Income or Loss of a Constituent Entity of an MNE Group for a Fiscal Year is a negative amount, the Constituent Entity ' s GloBE Loss for the Fiscal Year is the absolute value of that amount.

GloBE Loss Deferred Tax Asset
:

(a) of an MNE Group - means a GloBE Loss Deferred Tax Asset established under subsection 4-125(1) ; and

(b) of an Ultimate Parent Entity - means a GloBE Loss Deferred Tax Asset established under subsection 4-135(1) .

GloBE Loss Election
: see subsection 4-120(1) .

GloBE Reorganisation
: see subsection 6-65(1) .

High-Tax Counterparty
: see section 3-190 .

Hybrid Arbitrage Arrangement
: see section 8-115 .

Hybrid Entity
: see section 10-55 .

IIR
means any law of a jurisdiction that may reasonably be considered to have been enacted with the intention of implementing, in whole or in part, Articles 2.1 to 2.3 of the GloBE Rules.

IIR Top-up Tax Amount
: see section 2-5 .

Included Revaluation Method Gain or Loss
: see subsection 3-50(1) .

Inclusion Ratio
: see subsection 2-15(1) .

Income Tax Accrued (Current Year)
: see subsection 8-190(2) .

Insurance Investment Entity
means an Entity that:

(a) is established in relation to liabilities under an insurance or annuity contract; and

(b) is wholly-owned by one or more Entities (the owners ) that:

(i) are subject to regulation as an insurance company in the jurisdiction in which they are located; and

(ii) if there is more than one owner - are all part of the same MNE Group; and

(c) but for paragraphs (a) and (b), would be an Investment Fund or a Real Estate Investment Vehicle.

Intermediate Parent Entity
means a Constituent Entity of an MNE Group (other than an Ultimate Parent Entity, Partially-Owned Parent Entity, Permanent Establishment, Investment Entity or Insurance Investment Entity) that holds an Ownership Interest in another Constituent Entity of the MNE Group.

International Shipping Activity
: see subsection 3-225(2) .

International Shipping Income
: see subsection 3-225(1) .

International Shipping Income Costs
: see subsection 3-225(3) .

International Shipping Income Revenue
: see subsection 3-225(2) .

Intragroup Financing Arrangement
: see section 3-185 .

Investment Entity
means:

(a) an Investment Fund or a Real Estate Investment Vehicle; or

(b) an Entity that is at least 95% owned directly by an Entity described in paragraph (a) or through a chain of such Entities and that operates exclusively or almost exclusively to hold assets or invest funds for the benefit of such Investment Entities; or

(c) an Entity, where:

(i) at least 85% of the value of the Entity is owned by an Entity referred to in paragraph (a); and

(ii) substantially all of the Entity ' s income is Excluded Dividends or Excluded Equity Gain or Loss that is excluded from the computation of GloBE Income or Loss under section 3-20 or 3-30 .

Jurisdictional Top-up Tax
: see section 5-30 .

Local Tangible Asset
: see section 3-170 .

Look-back Period
: see section 3-175 .

Loss Year
: see section 3-175 .

Low-Taxed Constituent Entity
, of an MNE Group for a Fiscal Year, means either of the following:

(a) a Constituent Entity of the MNE Group that is located in a Low-Tax Jurisdiction;

(b) a Stateless Constituent Entity of the MNE Group that has GloBE Income and an Effective Tax Rate for the Fiscal Year that is lower than the Minimum Rate.

Note:

See also subsections 5-95(5) and 5-100(4) and paragraphs 7-155(3)(a) and 7-170(3)(a) .

Low-Tax Entity
: see section 3-190 .

Low-Tax Jurisdiction
: see section 3-195 .

Marketable Price Floor
: see subsection 3-135(1) .

Marketable Transferable Tax Credit
: see section 3-130 .

Minimum Rate
means 15%.

Minority-Owned Constituent Entity
: see subsection 5-130(1) .

Minority-Owned Parent Entity
: see subsection 5-130(2) .

Minority-Owned Subgroup
: see subsection 5-135(2) .

Minority-Owned Subsidiary
: see subsection 5-135(1) .

Multi-Parented MNE Group
: see subsection 6-85(1) .

Net Asset Gain
: see section 3-170 .

Net Asset Loss
: see section 3-170 .

Net Book Value of Tangible Assets
: see section 2-80 .

Net GloBE Income
: see section 5-15 .

Net GloBE Loss
: see section 5-15 .

Net Unrealised Fair Value Loss
: see subsection 8-100(2) .

Non-Marketable Transferable Tax Credit
: see section 3-140 .

Non-material Constituent Entity
(or NMCE ): see section 8-185 .

Non-Qualified Refundable Tax Credit
: see subsection 3-125(3) .

Non-qualifying Gain or Loss
: see subsection 6-65(4) .

OECD Model Tax Convention
means the Model Tax Convention on Income and on Capital published (from time to time) by the Council of the OECD.

OECD Securitisation Entity
: see subsection 8-215(1) .

Other Comprehensive Income
: see subsection 3-50(2) .

Other Tax Credit
: see subsection 3-140(3) .

Parent Entity
means:

(a) an Ultimate Parent Entity that is not an Excluded Entity; or

(b) an Intermediate Parent Entity; or

(c) a Partially-Owned Parent Entity.

Partially-Owned Parent Entity
means a Constituent Entity of an MNE Group (other than an Ultimate Parent Entity, Permanent Establishment, Investment Entity or Insurance Investment Entity):

(a) that holds an Ownership Interest in another Constituent Entity of the MNE Group; and

(b) in which Ownership Interests carrying rights to more than 20% of its profits are held by persons that are not Constituent Entities of the MNE Group.

Passive Income
means income included in GloBE Income that is any of the following:

(a) a dividend or dividend equivalents;

(b) interest or interest equivalent;

(c) rent;

(d) royalty;

(e) annuity;

(f) net gains from property of a type that produces income described in paragraphs (a) to (e);

but only to the extent a Constituent Entity-owner is subject to Tax on such income under a Controlled Foreign Company Tax Regime or as a result of an Ownership Interest in a Hybrid Entity.

Payroll Carve-out Amount
: see subsection 5-55(1) .

Portfolio Shareholding
: see subsection 3-25(4) .

Profit (Loss) before Income Tax
: see section 8-30 .

Qualified Ancillary International Shipping Income
: see subsection 3-230(1) .

Qualified CbC Report
: see section 8-35 .

qualified debt release amount
: see subsection 3-85(1) .

Qualified Domestic Minimum Top-up Tax
means a Tax that is:

(a) imposed under a law of a jurisdiction; and

(b) specified in a determination under paragraph 10-15(b) .

Qualified Financial Statements
: see section 8-70 .

qualified flow-through ownership interest
: see section 4-38 .

Qualified IIR
means a Tax that is:

(a) imposed under a law of a jurisdiction; and

(b) specified in a determination under paragraph 10-15(a) .

Qualified Imputation Tax
means a Covered Tax imposed by a jurisdiction (the imposing jurisdiction ) and accrued or paid by a Constituent Entity of a Group that is refundable or creditable to the beneficial owner of a dividend distributed by the Constituent Entity (or, in the case of a Covered Tax accrued or paid by a Permanent Establishment, a dividend distributed by the Main Entity), to the extent that any of the following apply:

(a) the refund is payable, or the credit is provided, under a foreign tax credit regime, by a jurisdiction other than the imposing jurisdiction;

(b) the beneficial owner is subject to tax on the dividend on a current basis, under the domestic law of the imposing jurisdiction, at a nominal rate that equals or exceeds the Minimum Rate;

(c) the beneficial owner is an individual who is:

(i) a tax resident in the imposing jurisdiction; and

(ii) subject to tax on the dividends as ordinary income;

(d) if the dividends are received in connection with a pension fund business and subject to tax in a similar manner as a dividend received by a Pension Fund - the refund is payable, or the credit is provided, by a jurisdiction (the benefit jurisdiction ) to an Entity that is any of the following:

(i) a Governmental Entity;

(ii) an International Organisation;

(iii) a Non-profit Organisation that is created and managed in the benefit jurisdiction;

(iv) a Pension Fund that is created and managed in the benefit jurisdiction;

(v) an Investment Entity that is not a Group Entity of the Group and is created and regulated in the benefit jurisdiction;

(vi) a life insurance company that is located in the benefit jurisdiction.

Qualified Refundable Tax Credit
: see subsections 3-125(1) and (2) .

Qualified UTPR
means a Tax that is:

(a) imposed under a law of a jurisdiction; and

(b) specified in a determination under paragraph 10-15(c) .

Recapture Account Loss Carry-forward
: see subsection 7-60(2) .

Recaptured Deferred Tax Liability
: see section 4-105 .

Recapture Exception Accrual
: see section 4-110 .

Reductions to Covered Taxes
: see section 4-20 .

Reference Jurisdiction
: See section 9-50 .

Refundable Tax Credit
: see subsection 3-125(4) .

regulated mutual insurance company
: see subsection 7-130(6) .

Relevant CbC Regulations
: see subsection 8-195(1) .

Restricted Tier One Capital
: see subsection 3-210(2) .

Reverse Hybrid Entity
: see section 10-40 .

Routine profits test
: see section 8-60 .

SC De minimis test
: see section 8-160 .

SC ETR test
: see section 8-165 .

SC Routine profits test
: see section 8-170 .

Securitisation Arrangement
: see section 8-220 .

Securitisation Entity
: see section 10-25 .

Short-term Portfolio Shareholding
: see subsection 3-25(3) .

Simplified Covered Taxes
: see section 8-50 .

Simplified ETR
: see section 8-45 .

Simplified ETR test
: see section 8-40 .

Stapled Structure
: see subsection 6-85(3) .

Substance-based Income Exclusion Amount
: see section 5-50 .

Substitute Loss Carry-forward DTA
: see section 4-95 .

Tangible Asset Carve-out Amount
: see subsection 5-65(1) .

Tax
means a compulsory unrequited payment to general government.

tax functional currency
: see subsection 3-60(1) .

Tax Transparent Entity
: see section 10-35 .

Tax Transparent Structure
: see section 10-45 .

Top-up Tax
: see section 5-40 .

Top-up Tax Percentage
: see section 5-20 .

Total Deferred Tax Adjustment Amount
: see sections 4-85 and 4-90 .

Total Revenue
: see sections 8-25 and 8-190 .

Total UTPR Top-up Tax Amount
: see subsection 2-55(1) .

Transition Period
: see section 8-15 .

Transition Rate
: see section 8-55 .

Transition Year
: see section 9-20 .

Unclaimed Accrual
: see subsection 4-115(2) .

Undistributed Net GloBE Income Account
: see section 7-160 .

UTPR
means any law of a jurisdiction that may reasonably be considered to have been enacted with the intention of implementing, in whole or in part, Articles 2.4 to 2.6 of the GloBE Rules.

UTPR Percentage
: See section 2-65 .

UTPR Top-up Tax Amount
: see section 2-45 .