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

CHAPTER 5 - COMPUTATION OF EFFECTIVE TAX RATE  

PART 5-6 - MINORITY-OWNED CONSTITUENT ENTITIES  

SECTION 5-120   MINORITY-OWNED CONSTITUENT ENTITIES THAT COMPRISE A MINORITY-OWNED SUBGROUP  

5-120(1)    
This section applies if 2 or more Constituent Entities of an MNE Group (the actual group ) are Minority-Owned Constituent Entities (each of which is a MOCE ) that comprise a Minority-Owned Subgroup.

5-120(2)    
For the purposes mentioned in subsection (3) :

(a)    treat the MOCEs as comprising a separate MNE Group (the deemed group ); and

(b)    treat the MOCEs as not being Constituent Entities of the actual group.

5-120(3)    
The purposes are as follows:

(a)    computing the Top-up Tax of each MOCE;

(b)    computing the Top-up Tax of each Constituent Entity of the actual group (other than a MOCE);

(c)    determining whether each Constituent Entity of the actual group (including a MOCE) is a Low-Taxed Constituent Entity.

Note 1:

For paragraph (a) , to compute the Top-up Tax of a MOCE, it is necessary to compute the Effective Tax Rate and Jurisdictional Top-up Tax of the deemed group for the jurisdiction in which it is located.

Note 2:

For paragraph (c) , to determine whether a MOCE is a Low-Taxed Constituent Entity, it is necessary to compute the Effective Tax Rate and Net GloBE Income of the deemed group for the jurisdiction in which it is located (see section 3-195 ).

5-120(4)    
Subsection (2) does not apply for the purposes of Part 5-5 (De minimis exclusion).