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

CHAPTER 2 - LIABILITY AMOUNTS  

PART 2-1 - APPLICATION OF THE IIR  

SECTION 2-5   MEANING OF IIR TOP-UP TAX AMOUNT  
Constituent Entities

2-5(1)    
A Parent Entity of an Applicable MNE Group for a Fiscal Year has an IIR Top-up Tax Amount for the Fiscal Year in respect of a Low-Taxed Constituent Entity for the Fiscal Year of the Applicable MNE Group if:

(a)    the Parent Entity is located in Australia; and

(b)    the Parent Entity holds an Ownership Interest in the Low-Taxed Constituent Entity at any time during the Fiscal Year; and

(c)    the Low-Taxed Constituent Entity is not located in Australia.

Note:

A Parent Entity that is taken to be located in another jurisdiction under subsection 10-60(2) or (3) may be treated as being located in Australia for the purposes of paragraph (a) of this subsection: see section 10-65 .

2-5(2)    
The IIR Top-up Tax Amount is equal to the Parent Entity ' s Allocable Share of the Top-up Tax of the Low-Taxed Constituent Entity for the Fiscal Year.

Joint Ventures and JV Subsidiaries

2-5(3)    
A Parent Entity of an Applicable MNE Group for a Fiscal Year has an IIR Top-up Tax Amount for the Fiscal Year in respect of a Joint Venture of the Applicable MNE Group, or a JV Subsidiary of a Joint Venture of the Applicable MNE Group, for the Fiscal Year if:

(a)    the Parent Entity is located in Australia; and

(b)    the Parent Entity holds an Ownership Interest in the Joint Venture or JV Subsidiary at any time during the Fiscal Year; and

(c)    the Joint Venture or JV Subsidiary is not located in Australia; and

(d)    the Joint Venture or JV Subsidiary is a Low-Taxed Constituent Entity for the Fiscal Year.

Note:

For the purposes of determining whether a Joint Venture or its JV Subsidiaries are Low-Taxed Constituent Entities, treat them as comprising a separate MNE Group, of which the Joint Venture is the Ultimate Parent Entity: see paragraph 6-75(3)(b) .

2-5(4)    
The IIR Top-up Tax Amount is equal to the Parent Entity ' s Allocable Share of the Top-up Tax of the Joint Venture or JV Subsidiary for the Fiscal Year, computed in accordance with section 6-75 .

Ordering rule

2-5(5)    
Despite subsections (1) and (3) , the Parent Entity mentioned in those subsections does not have an IIR Top-up Tax Amount for the Fiscal Year in any of the following circumstances:

(a)    in a case where the Parent Entity is an Intermediate Parent Entity of the Applicable MNE Group:

(i) the Ultimate Parent Entity of the Applicable MNE Group is required to apply a Qualified IIR for that Fiscal Year; or

(ii) another Intermediate Parent Entity of the Applicable MNE Group that holds (directly or indirectly) a Controlling Interest in the Intermediate Parent Entity is required to apply a Qualified IIR for that Fiscal Year;

(b)    in a case where the Parent Entity is a Partially-Owned Parent Entity of the Applicable MNE Group:

(i) the Partially-Owned Parent Entity is wholly owned (directly or indirectly) by another Partially-Owned Parent Entity of the Applicable MNE Group; and

(ii) the other Partially-Owned Parent Entity is required to apply a Qualified IIR for that Fiscal Year.