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

CHAPTER 8 - ADMINISTRATION  

PART 8-2 - SAFE HARBOURS  

Division 2 - Transitional CbCR Safe Harbour  

Subdivision F - Special rules for particular circumstances  

SECTION 8-95   TRANSITIONAL CbCR SAFE HARBOUR - SPECIAL RULES FOR INVESTMENT ENTITIES AND THEIR CONSTITUENT ENTITY-OWNERS  
Non-qualifying Investment Entities

8-95(1)    
Subsections (2) , (3) and (4) apply in relation to a Fiscal Year if both of the following apply to one or more Constituent Entities of an MNE Group that are Investment Entities (the non-qualifying Investment Entities ):

(a)    the non-qualifying Investment Entities are CbCR Residents of a jurisdiction (the Investment Entity Jurisdiction ) for the Fiscal Year;

(b)    an election under subsection (7) does not apply in relation to the non-qualifying Investment Entities and the Fiscal Year.

8-95(2)    
For the purposes of section 8-10 , apply the principles in subsection (3) in computing the MNE Group ' s:

(a)    Profit (Loss) before Income Tax; and

(b)    Total Revenue; and

(c)    Simplified Covered Taxes;

for the Fiscal Year for each of the following jurisdictions (the relevant jurisdictions ):

(d)    the Investment Entity Jurisdiction;

(e)    each jurisdiction of which a Constituent Entity-owner of a non-qualifying Investment Entity is a CbCR Resident.

8-95(3)    
For the purposes of subsection (2) , the principles are as follows:

(a)    include a proportion of each non-qualifying Investment Entity ' s profit or loss before income tax for the Fiscal Year in the profit or loss before income tax for the Fiscal Year of each Constituent Entity-owner of the non-qualifying Investment Entity;

(b)    include a proportion of each non-qualifying Investment Entity ' s total revenues for the Fiscal Year in the total revenues for the Fiscal Year of each Constituent Entity-owner of the non-qualifying Investment Entity;

(c)    include a proportion of each non-qualifying Investment Entity ' s associated taxes for the Fiscal Year in the associated taxes for the Fiscal Year of each Constituent Entity-owner of the non-qualifying Investment Entity;

(d)    exclude so much of each non-qualifying Investment Entity ' s profit or loss before income tax, total revenues and associated taxes for the Fiscal Year as is attributable to Direct Ownership Interests in the non-qualifying Investment Entity that are held by Entities that are not Group Entities of the MNE Group;

(e)    adjust the MNE Group ' s Profit (Loss) before Income Tax for the relevant jurisdictions as necessary to ensure that the income and associated taxes of each non-qualifying Investment Entity are only taken into account in the MNE Group ' s Profit (Loss) before Income Tax for the jurisdictions of which the Constituent Entity-owner is a CbCR Resident for the Fiscal Year.

For the purposes of paragraphs (a) , (b) and (c) , the proportion, for a particular Constituent Entity-owner of a non-qualifying Investment Entity, is the proportion of the Ownership Interests in the non-qualifying Investment Entity held by the Constituent Entity-owner.

8-95(4)    
If section 8-10 applies in relation to the MNE Group, the jurisdictions in which the non-qualifying Investment Entities are located, and the Fiscal Year, compute the Top-up Tax of the non-qualifying Investment Entities for the Fiscal Year in accordance with Parts 7-4 , 7-5 and 7-6 . In doing so:

(a)    disregard section 8-10 ; and

(b)    in computing amounts under Parts 7-4 , 7-5 or 7-6 in relation to the non-qualifying Investment Entities for the Fiscal Year, take into account amounts only to the extent that they are attributable to the non-qualifying Investment Entities.

Qualifying Investment Entities

8-95(5)    
Subsection (6) applies in relation to a Fiscal Year if:

(a)    a Constituent Entity of an MNE Group is an Investment Entity (the qualifying Investment Entity ); and

(b)    an election under subsection (7) applies in relation to the qualifying Investment Entity and the Fiscal Year.

8-95(6)    
For the purposes of section 8-10 , treat the qualifying Investment Entity as being a Constituent Entity of the MNE Group that is not an Investment Entity.

Election

8-95(7)    
A Filing Constituent Entity for an MNE Group may make an election for the MNE Group under this subsection that applies to a specified Constituent Entity of the MNE Group and a specified Fiscal Year covered by the Transition Period if:

(a)    the Constituent Entity is an Investment Entity; and

(b)    an election under subsection 7-125(1) (Investment Entity Transparency Election) does not apply to the Investment Entity and the Fiscal Year; and

(c)    an election under subsection 7-145(1) (Taxable Distribution Method Election) does not apply to the Investment Entity and the Fiscal Year; and

(d)    each Constituent Entity-owner of the Investment Entity is a CbCR Resident of the same jurisdiction as the Investment Entity.

Interpretation

8-95(8)    
For the purposes of this section, treat an Insurance Investment Entity as if it were an Investment Entity.

8-95(9)    
For the purposes of this section, treat each reference to a Constituent Entity-owner of an Investment Entity as only including Constituent Entity-owners that hold a Direct Ownership Interest in the Investment Entity.