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

CHAPTER 2 - LIABILITY AMOUNTS  

PART 2-5 - UTPR TOP-UP TAX AMOUNT  

SECTION 2-55   MEANING OF TOTAL UTPR TOP-UP TAX AMOUNT  

2-55(1)    
The Total UTPR Top-up Tax Amount for an MNE Group for a Fiscal Year is the sum of the following:

(a)    the total of the Top-up Tax for the Fiscal Year of each Low-Taxed Constituent Entity for the Fiscal Year of the MNE Group, as adjusted in accordance with this section;

(b)    if there are one or more Joint Ventures of the MNE Group - the total of the Ultimate Parent Entity ' s Allocable Share of the Top-up Tax of each Joint Venture, and of each of its JV Subsidiaries (if any), as adjusted in accordance with this section.

Note:

The Total UTPR Top-up Tax Amount for an MNE Group for a jurisdiction may be modified by Part 8-2 (Safe harbours).

Reduction if required to apply a Qualified IIR

2-55(2)    
For the purposes of paragraph (1)(a) , reduce the Top-up Tax for the Fiscal Year of a Low-Taxed Constituent Entity to zero if:

(a)    the Low-Taxed Constituent Entity is the MNE Group ' s Ultimate Parent Entity; and

(b)    the Ultimate Parent Entity is required to apply a Qualified IIR for that Fiscal Year.

2-55(3)    
For the purposes of paragraph (1)(a) , reduce the Top-up Tax for the Fiscal Year of a Low-Taxed Constituent Entity to zero if:

(a)    all of the Ownership Interests in the Low-Taxed Constituent Entity held by the MNE Group ' s Ultimate Parent Entity are any of the following:

(i) Direct Ownership Interests;

(ii) Indirect Ownership Interests held through one or more Parent Entities of the MNE Group; and

(b)    if subparagraph (a)(i) applies (whether or not subparagraph (a)(ii) also applies) - the Ultimate Parent Entity is required to apply a Qualified IIR for that Fiscal Year; and

(c)    if subparagraph (a)(ii) applies (whether or not subparagraph (a)(i) also applies) - each of the Indirect Ownership Interests mentioned in subparagraph (a)(ii) arise because of Ownership Interests in the Low-Taxed Constituent Entity held by Parent Entities mentioned in subparagraph (a)(ii) that are required to apply a Qualified IIR for that Fiscal Year.

Reduction - amounts brought into charge under a Qualified IIR

2-55(4)    
For the purposes of paragraph (1)(a) , reduce the Top-up Tax for the Fiscal Year of a Low-Taxed Constituent Entity if:

(a)    subsection (3) does not apply in relation to the Fiscal Year and the Low-Taxed Constituent Entity; and

(b)    a Parent Entity of the MNE Group holds an Ownership Interest in the Low-Taxed Constituent Entity.

Note:

The Low-Taxed Constituent Entity may be located in Australia.

2-55(5)    
The amount of the reduction is the portion of the Parent Entity ' s Allocable Share of the Top-up Tax that is brought into charge by the Parent Entity under a Qualified IIR.

Reduction - amounts brought into charge under a Qualified IIR - JV Entities

2-55(6)    
For the purposes of paragraph (1)(b) , reduce the Top-up Tax for the Fiscal Year of a Joint Venture, or of a JV Subsidiary, if a Parent Entity of the MNE Group holds an Ownership Interest in the Joint Venture or JV Subsidiary.

Note:

The Joint Venture or JV Subsidiary may be located in Australia.

2-55(7)    
The amount of the reduction is the portion of the Parent Entity ' s Allocable Share of the Top-up Tax that is brought into charge by the Parent Entity under a Qualified IIR.