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

CHAPTER 3 - COMPUTATION OF GloBE INCOME OR LOSS  

PART 3-2 - ADJUSTMENTS TO DETERMINE GloBE INCOME OR LOSS  

Division 1 - Article 3.2.1 adjustments  

SECTION 3-25   MEANING OF EXCLUDED DIVIDENDS, SHORT-TERM PORTFOLIO SHAREHOLDING AND PORTFOLIO SHAREHOLDING  

3-25(1)    
Excluded Dividends means dividends or other distributions received or accrued in respect of an Ownership Interest, except:

(a)    where the Ownership Interest is a Short-term Portfolio Shareholding in respect of the distributions; or

(b)    where the Ownership Interest is in an Investment Entity or Insurance Investment Entity, to the extent that the distributions are included under subsection 7-150(2) .

Note:

If an election under subsection 3-20(2) applies to a Constituent Entity, a Portfolio Shareholding of the Constituent Entity is treated as a Short-term Portfolio Shareholding of the Constituent Entity for the purposes of the definition of Excluded Dividends in this subsection: see paragraph 3-20(1)(b) .

3-25(2)    
However, if:

(a)    dividends or other distributions are received or accrued in respect of an Ownership Interest in an Entity; and

(b)    the Ownership Interest is a compound financial instrument having both equity and liability components under the Acceptable Financial Accounting Standard used in the preparation of the financial accounts of the Entity;

the dividends or other distributions are Excluded Dividends under subsection (1) only to the extent that they are received or accrued in respect of the equity component of the Ownership Interest (as determined in accordance with that Acceptable Financial Accounting Standard).

3-25(3)    
If:

(a)    a Constituent Entity of an MNE Group receives or accrues dividends or other distributions as a result of a Portfolio Shareholding of the Constituent Entity in an Entity; and

(b)    the Portfolio Shareholding has been economically held by the Constituent Entity for less than one year at the date of the distribution;

the Portfolio Shareholding is a Short-term Portfolio Shareholding in the Entity, of the Constituent Entity, in respect of the distributions.

3-25(4)    
If the Direct Ownership Interests in an Entity held by any of the following:

(a)    a Constituent Entity of an MNE Group;

(b)    any other Constituent Entity of the MNE Group;

together carry rights to less than 10% of the profits, capital, reserves or voting rights of the Entity, the Direct Ownership Interests in the Entity that are held by a Constituent Entity of the MNE Group is a Portfolio Shareholding of that Constituent Entity in the Entity.