Part 1
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Commonwealth legislation
This legislation implements Australia’s version of the international Global Minimum Tax: large multinational groups (annual revenue over €750 million) must have at least a 15% effective tax in every jurisdiction, and Australia can collect a top‑up where taxes fall short via domestic rules applied to Australian and foreign-owned group members.
It targets MNEs with low‑taxed foreign affiliates or Australian operations, curbs profit‑shifting to tax havens, and preserves Australia’s taxing rights when other jurisdictions fail to apply the minimum tax.
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Direct links to the current provisions in Taxation (Multinational—Global and Domestic Minimum Tax) Rules 2024.
This instrument is the Taxation (Multinational—Global and Domestic Minimum Tax) Rules 2024.
This instrument is made under the Taxation (Multinational—Global and Domestic Minimum Tax) Act 2024.
Note: This instrument applies generally in relation to Fiscal Years starting on or after 1 January 2024: see subsection 5(1) of the Act. However, to the extent that this instrument applies to Australian UTPR Tax, it applies in relation to Fiscal Years starting on or after 1 January 2025: see subsection 5(2) of the Act.
(1) For the purposes of paragraph 20(1)(h) of the Act, the following Entities are prescribed: (a) an Excluded Exempt Income Entity; (b) an Excluded Non‑Profit Subsidiary. (2) An Entity is an Excluded Exempt Income Entity if: (a) at least 85% of the value of the Entity is owned (directly or through a chain of Excluded Entities) by one or more of the following (other than a Pension Services Entity): (i) an Excluded Entity under paragraph 20(1)(a), (b), (c), (d), (e) or (f) of the Act; (ii) if the Entity is an Ultimate Parent Entity—an Investment Fund or a Real Estate Investment Vehicle; and (b) substantially all of the Entity’s income is Excluded Dividends or Excluded Equity Gain or Loss that is excluded from the computation of GloBE Income or Loss in accordance with section 3‑20 or 3‑30 of this instrument. (3) An Entity is an Excluded Non‑Profit Subsidiary if: (a) 100% of the value of the Entity is owned (directly or indirectly) by one or more Non‑profit Organisations; and (b) the sum of the revenue of all Group Entities of the MNE Group of which the Entity is a Group Entity (other than such revenue as is attributable to a Group Entity of the MNE Group that is a Non‑profit Organisation, an Excluded Service Entity or an Excluded Exempt Income Entity): (i) does not exceed the MNE Group’s GloBE Threshold for the Fiscal Year; and (ii) is less than 25% of the total revenue of the MNE Group.
General foreign currency translation (1) Subsection (2) applies for the purposes of computing an amount under this instrument in relation to an MNE Group for a Fiscal Year, if the amount: (a) is denominated in a currency other than the reporting currency of the Consolidated Financial Statements of the Ultimate Parent Entity of the MNE Group (the relevant reporting currency); and (b) is not converted to the relevant reporting currency in the course of preparing the Consolidated Financial Statements; and (c) is not an amount to which subsection (4) or (6) applies. (2) Convert the amount to the relevant reporting currency using the foreign currency translation principles of the Authorised Financial Accounting Standard that would have been used to convert the amount to the relevant reporting currency if that conversion were undertaken in the course of preparing the Consolidated Financial Statements for the Fiscal Year. Foreign currency translation for materiality or other threshold (3) Subsection (4) applies for the purposes of determining if a materiality or other threshold mentioned in subsection 12(4) or section 35 of the Act, or in this instrument, that is denominated in Euros is satisfied or exceeded by an amount in respect of a Group, Entity or jurisdiction for a particular Fiscal Year. (4) If the amount is denominated in another currency, convert the amount from that currency to Euros using the average of the daily rates of exchange, in respect of the 2 currencies for the month of December included in the Fiscal Year immediately preceding the particular Fiscal Year, as quoted by: (a) the European Central Bank; or (b) if the European Central Bank does not quote a daily rate of exchange in respect of the 2 currencies—the Reserve Bank of Australia; or (c) if both the European Central Bank and the Reserve Bank of Australia do not quote a daily rate of exchange in respect of the 2 currencies—a source specified in a determination under subsection (5). (5) For the purposes of paragraph (4)(c), the Minister may, by legislative instrument, make a determination specifying a source quoting rates of exchange. Foreign currency translation of Top-up Tax amounts (6) If an amount of IIR Top-up Tax Amount, Domestic Top-up Tax Amount or UTPR Top-up Tax Amount for a Fiscal Year is denominated in a currency other than Australian currency (the foreign currency), convert the amount from the foreign currency to Australian currency using any of the following: (a) the daily rate of exchange as quoted by the Reserve Bank of Australia in respect of the 2 currencies on the last day of the Fiscal Year; (b) the daily rate of exchange as quoted by the central bank for the foreign currency in respect of the 2 currencies on the last day of the Fiscal Year; (c) a publicly and commercially available market exchange rate in respect of the 2 currencies on the last day of the Fiscal Year.
Chapter 2—Liability amounts
Constituent Entities (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) 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 (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).
(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 (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.
A Parent Entity’s Allocable Share of the Top‑up Tax of a Low‑Taxed Constituent Entity for a Fiscal Year is an amount equal to: (a) the Top‑up Tax of the Low‑Taxed Constituent Entity for the Fiscal Year; multiplied by: (b) the Parent Entity’s Inclusion Ratio for the Low‑Taxed Constituent Entity for the Fiscal Year.
Note 1: See section 2‑20 for the effect of the IIR offset mechanism on the Allocable Share.
Note 2: See section 7‑95 for the computation of a Parent Entity’s Allocable Share of the Top‑up Tax of a Constituent Entity that is an Investment Entity.
(1) The Inclusion Ratio, of a Parent Entity of an MNE Group, for a Low‑Taxed Constituent Entity for a Fiscal Year, is: (a) the GloBE Income of the Low‑Taxed Constituent Entity for the Fiscal Year, reduced by the amount of that GloBE Income attributable to Ownership Interests held by other owners (see subsection (2)); divided by: (b) the GloBE Income of the Low‑Taxed Constituent Entity for the Fiscal Year.
Note: See subsection (3) if the Low‑Taxed Constituent Entity is a Flow‑through Entity.
(2) For the purposes of paragraph (1)(a), the amount of GloBE Income attributable to Ownership Interests in the Low‑Taxed Constituent Entity held by other owners is the amount that would have been treated as attributable to such owners under the principles of the Acceptable Financial Accounting Standard used in the Consolidated Financial Statements of the Ultimate Parent Entity of the MNE Group on the following assumptions: (a) the Low‑Taxed Constituent Entity’s net income were equal to its GloBE Income; (b) the Parent Entity had prepared Consolidated Financial Statements in accordance with that Acceptable Financial Accounting Standard (the hypothetical Consolidated Financial Statements); (c) the Parent Entity held a Controlling Interest in the Low‑Taxed Constituent Entity such that all of the income and expenses of the Low‑Taxed Constituent Entity were consolidated on a line‑by‑line basis with those of the Parent Entity in the hypothetical Consolidated Financial Statements; (d) all of the Low‑Taxed Constituent Entity’s GloBE Income were attributable to transactions with persons that are not Group Entities of the MNE Group; (e) all Ownership Interests not held by the Parent Entity were held by owners that are not Group Entities of the MNE Group. (3) However, if the Low‑Taxed Constituent Entity is a Flow‑through Entity, treat references in this section to GloBE Income as not including any amount by which its Financial Accounting Net Income or Loss is reduced under paragraph 3‑255(1)(a) (amounts attributable to an owner that is not a Group Entity of the MNE Group).
(1) A Parent Entity of an MNE Group’s Allocable Share of the Top‑up Tax of a Low‑Taxed Constituent Entity is reduced if: (a) the Parent Entity holds an Indirect Ownership Interest in the Low‑Taxed Constituent Entity through an Intermediate Parent Entity or a Partially‑Owned Parent Entity of the MNE Group; and (b) the Intermediate Parent Entity or a Partially‑Owned Parent Entity is not eligible for an exclusion under subsection 2‑5(5), or an equivalent law of a non‑Australian jurisdiction. (2) 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 Intermediate Parent Entity or the Partially‑Owned Parent Entity under a Qualified IIR.
Constituent Entities generally (1) Subsection (2) applies if a Low‑Taxed Constituent Entity for a Fiscal Year of an Applicable MNE Group for the Fiscal Year: (a) is located in Australia for the Fiscal Year; or (b) is a Stateless Constituent Entity of the Applicable MNE Group that: (i) is created in Australia, and is a Stateless Constituent Entity under subsection 41(3) of the Act; or (iii) is a Permanent Establishment in relation to which paragraph 19(1)(d) of the Act applies, and is a place of business (including a deemed place of business) in Australia. (2) The Low‑Taxed Constituent Entity has a Domestic Top‑up Tax Amount for the Fiscal Year if it has Top‑up Tax for the Fiscal Year.
Note: If the Low‑Taxed Constituent Entity is a Securitisation Entity, its Domestic Top‑up Tax Amount for the Fiscal Year will be zero (see subsection 2‑35(3)) unless the only Constituent Entities of the MNE Group located in Australia are Securitisation Entities (see subsection 2‑35(4)).
Permanent Establishments (3) Subsection (4) applies if: (a) a Low‑Taxed Constituent Entity for a Fiscal Year of an Applicable MNE Group for the Fiscal Year is a Permanent Establishment of a Main Entity; and (b) the Low‑Taxed Constituent Entity is either: (i) located in Australia for the Fiscal Year; or (ii) a Stateless Constituent Entity covered by subparagraph (1)(b)(iii); and (c) the Main Entity is not located in Australia for the Fiscal Year. (4) If the Low‑Taxed Constituent Entity has Top‑up Tax for the Fiscal Year: (a) despite subsection (2), the Low‑Taxed Constituent Entity does not have a Domestic Top‑up Tax Amount for the Fiscal Year; and (b) the Main Entity has a Domestic Top‑up Tax Amount for the Fiscal Year in respect of the Low‑Taxed Constituent Entity. Joint Ventures and JV Subsidiaries (5) Subsection (6) applies if: (a) a Joint Venture of an MNE Group, or a JV Subsidiary of a Joint Venture of an MNE Group is: (i) located in Australia for a Fiscal Year; or (ii) a Flow‑through Entity created in Australia, and, under paragraph 6‑75(2)(c), treated as a Stateless Constituent Entity for a Fiscal Year; or (iii) treated under paragraph 6-75(2)(c) as a Stateless Constituent Entity that is a Permanent Establishment in relation to which paragraph 19(1)(d) of the Act applies, and a place of business (including a deemed place of business) in Australia, for a Fiscal Year; and (b) the MNE Group is an Applicable MNE Group for the Fiscal Year; and (c) the Joint Venture, or the 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).
(6) The Joint Venture, or the JV Subsidiary, has a Domestic Top‑up Tax Amount for the Fiscal Year if it has Top‑up Tax for the Fiscal Year. (7) Subsection (8) applies if: (a) a JV Subsidiary of a Joint Venture of an MNE Group is a Permanent Establishment of a Main Entity that is: (i) the Joint Venture; or (ii) another JV Subsidiary of the Joint Venture; and (b) the JV Subsidiary is a Low‑Taxed Constituent Entity for the Fiscal Year; and (c) the JV Subsidiary is either: (i) located in Australia for the Fiscal Year; or (ii) a JV Subsidiary covered by subparagraph (5)(a)(iii); and (d) the Main Entity is not located in Australia for the Fiscal Year. (8) If the JV Subsidiary has Top‑up Tax for the Fiscal Year: (a) despite subsection (6), the JV Subsidiary does not have a Domestic Top‑up Tax Amount for the Fiscal Year; and (b) the Main Entity has a Domestic Top‑up Tax Amount for the Fiscal Year in respect of the JV Subsidiary.
Constituent Entities generally and Permanent Establishments (1) For the purposes of subsection 2‑25(2) or (4), the amount of the Domestic Top‑up Tax Amount is equal to the amount of the Top‑up Tax mentioned in that subsection, computed in accordance with the principles set out in section 2‑35. Joint Ventures and JV Subsidiaries (2) For the purposes of subsection 2‑25(6) or (8), the amount of the Domestic Top‑up Tax Amount is equal to the amount of the Top‑up Tax mentioned in that subsection, computed in accordance with the principles set out in sections 2‑35 and 6‑75. (3) Subsection (4) applies if: (a) any of the following circumstances exist: (i) a Joint Venture of an MNE Group is also a Joint Venture of another MNE Group; (ii) a JV Subsidiary of a Joint Venture of an MNE Group is also a JV Subsidiary of a Joint Venture of another MNE Group; and (b) as a result of those circumstances, subsection 2‑25(6) or (8) applies to the Joint Venture, or the JV Subsidiary, for a Fiscal Year, in relation to each of the MNE Groups. (4) Treat the reference in subsection (2) to “the amount of the Top‑up Tax” as instead being a reference to “half the amount of the Top‑up Tax”.
Note: This means that the Joint Venture or the JV Subsidiary (or if subsection 2‑25(8) applies, the Main Entity) has a Domestic Top‑up Tax Amount for the Fiscal Year of half the amount of the Top‑up Tax, in relation to each MNE Group.
(1) This section sets out principles for the purposes of section 2‑30. (2) Assume that the amount of Domestic Top‑up Tax referred to in section 5‑30, for the Fiscal Year mentioned in subsection 2‑25(1) or (5), were zero. (3) If a Constituent Entity of an MNE Group is a Securitisation Entity for a Fiscal Year: (a) treat the GloBE Income of the Constituent Entity for the Fiscal Year as being zero for the purposes of the following: (i) the definition of Aggregate GloBE Income of all CEs in subsection 5‑40(2); (ii) the definition of Aggregate GloBE Income of all CEs for prior year in subsection 5‑40(5) (including that definition as it applies for the purposes of subsection 5‑40(7)); (iii) the definition of GloBE Income of the CE in subsection 5‑40(2); (iv) the definition of GloBE Income of the CE for prior year in subsection 5‑40(5) (including that definition as it applies for the purposes of subsection 5‑40(7)); and (b) for those purposes, do not apply paragraph 5‑40(7)(b) in relation to the GloBE Income of the Constituent Entity for the Fiscal Year. (4) Subsection (3) does not apply if the only Constituent Entities of the MNE Group that are located in Australia are Securitisation Entities. (5) If subsection (3) applies and no Constituent Entity of the MNE Group that is located in Australia and is not a Securitisation Entity has GloBE Income for the Fiscal Year: (a) treat the GloBE Income of each such Constituent Entity as being one Euro for the Fiscal Year, for the purposes of the following: (i) the definition of Aggregate GloBE Income of all CEs in subsection 5‑40(2); (ii) the definition of Aggregate GloBE Income of all CEs for prior year in subsection 5‑40(5) (including that definition as it applies for the purposes of subsection 5‑40(7)); (iii) the definition of GloBE Income of the CE in subsection 5‑40(2); (iv) the definition of GloBE Income of the CE for prior year in subsection 5‑40(5) (including that definition as it applies for the purposes of subsection 5‑40(7)); and (b) for those purposes, do not apply paragraph 5‑40(7)(b) in relation to the GloBE Income of the Constituent Entity for the Fiscal Year. (6) Assume that the following provisions did not apply in relation to the allocation of an amount in respect of Covered Taxes to a Constituent Entity covered by subsection (7): (a) section 4‑45 (Allocation of amounts from Constituent Entity to Permanent Establishment); (b) section 4‑55 (Allocation of amounts from Constituent Entity‑owner to CFC); (c) section 4‑65 (Allocation of amounts from Constituent Entity‑owner to Hybrid Entity or Reverse Hybrid Entity), unless the amount in respect of Covered Taxes is an amount in respect of tax imposed under a law of an Australian jurisdiction; (d) section 4‑70 (Amounts accrued in financial accounts of Constituent Entity‑owner on distribution from Constituent Entity to Constituent Entity‑owner—allocation to Constituent Entity), unless the amount in respect of Covered Taxes is an amount in respect of withholding tax (within the meaning of the Income Tax Assessment Act 1997). (7) For the purposes of subsection (6), this subsection covers any of the following: (a) a Constituent Entity that is located in Australia; (b) a Constituent Entity that is a Stateless Constituent Entity that: (i) is a Flow‑through Entity created in Australia; or (ii) is a Stateless Constituent Entity under subsection 41(3) or 42(3) of the Act; or (iii) is a Permanent Establishment in relation to which paragraph 19(1)(d) of the Act applies, and is a place of business (including a deemed place of business) in Australia. (8) Assume that section 4‑75 (Allocation of amounts in respect of Passive Income) were omitted. (9) Assume that section 8-200 (QDMTT Safe Harbour) does not apply.
(1) Subsection (2) applies if: (a) either of the following is a subsidiary member of a consolidated group: (i) a Constituent Entity of an MNE Group; (ii) a JV Subsidiary of a Joint Venture of an MNE Group; and (b) the head company of the consolidated group is not an Excluded Entity or a Securitisation Entity for the Fiscal Year. (2) Despite section 2‑30, the Constituent Entity’s or the JV Subsidiary’s (as the case requires) Domestic Top‑up Tax Amount for the Fiscal Year is taken to be reduced to zero. (3) Subsection (4) applies if: (a) any of the following is the head company of a consolidated group: (i) a Constituent Entity of an MNE Group; (ii) a Joint Venture of an MNE Group; (iii) a JV Subsidiary of a Joint Venture of an MNE Group; and (b) the head company of the consolidated group is not an Excluded Entity or a Securitisation Entity for the Fiscal Year. (4) The amount of the head company’s Domestic Top‑up Tax Amount for the Fiscal Year is taken to be increased by the amount of each reduction under subsection (2) of this section (if any) in respect of a subsidiary member of the consolidated group. (5) This section applies in relation to a MEC group in the same way in which it applies in relation to a consolidated group. (6) The following terms have the same meaning in this section as they do in the Income Tax Assessment Act 1997: (a) consolidated group; (b) head company; (c) MEC group; (d) subsidiary member.
(1) Subsection (2) applies if a Constituent Entity of an Applicable MNE Group for a Fiscal Year is located in Australia. (2) The Constituent Entity has a UTPR Top‑up Tax Amount for the Fiscal Year if: (a) the Total UTPR Top‑up Tax Amount for the Applicable MNE Group for the Fiscal Year is greater than zero; and (b) an amount of the Total UTPR Top‑up Tax Amount is allocated to Australia under section 2‑60; and (c) an amount of that allocated amount is distributed to the Constituent Entity under section 2‑70. (3) Subsection (4) applies if: (a) a Constituent Entity for a Fiscal Year of an Applicable MNE Group for the Fiscal Year is a Permanent Establishment of a Main Entity; and (b) the Constituent Entity is located in Australia for the Fiscal Year; and (c) the Main Entity is not located in Australia for the Fiscal Year. (4) If, disregarding this subsection, the Constituent Entity has a UTPR Top‑up Tax Amount for the Fiscal Year: (a) despite subsection (2), the Constituent Entity does not have a UTPR Top‑up Tax Amount for the Fiscal Year; and (b) the Main Entity has a UTPR Top‑up Tax Amount for the Fiscal Year. (5) For the purposes of subsections (2) and (4), the UTPR Top‑up Tax Amount is equal to the amount distributed to the Constituent Entity as mentioned in paragraph (2)(c). (6) To avoid doubt, if the Constituent Entity is an Investment Entity or Insurance Investment Entity, it does not have a UTPR Top‑up Tax Amount for the Fiscal Year.
Note 1: Under the formula in subsection 2‑70(3), an amount of the Australian allocated amount will not be distributed to such a Constituent Entity (see section 2‑85).
Note 2: If the Constituent Entity is Securitisation Entity, it will not have a UTPR Top‑up Tax Amount for the Fiscal Year unless the only Constituent Entities of the MNE Group that are located in its jurisdiction are Securitisation Entities (see paragraph 2‑85(2)(c)).
(1) Subsection (2) applies if: (a) a Constituent Entity of an MNE Group is a subsidiary member of a consolidated group; and (b) the head company of the consolidated group is not any of the following: (i) an Excluded Entity; (ii) an Investment Entity; (iii) an Insurance Investment Entity; (iv) a Securitisation Entity for the Fiscal Year. (2) Despite section 2‑45, the Constituent Entity’s UTPR Top‑up Tax Amount for the Fiscal Year is taken to be reduced to zero. (3) Subsection (4) applies if the Constituent Entity is the head company of a consolidated group. (4) The amount of the Constituent Entity’s UTPR Top‑up Tax Amount for the Fiscal Year is taken to be increased by the amount of each reduction under subsection (2) of this section (if any) in respect of a subsidiary member of the consolidated group. (5) This section applies in relation to a MEC group in the same way in which it applies in relation to a consolidated group. (6) The following terms have the same meaning in this section as they do in the Income Tax Assessment Act 1997: (a) consolidated group; (b) head company; (c) MEC group; (d) subsidiary member.
(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) 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. (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 (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.
(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 (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.
(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.
(1) For the purposes of this instrument, the Total UTPR Top‑up Tax Amount for an MNE Group for a Fiscal Year is allocated to Australia in accordance with this section. (2) The amount of the Total UTPR Top‑up Tax Amount allocated to Australia is: (a) the Total UTPR Top‑up Tax Amount; multiplied by: (b) the MNE Group’s UTPR percentage for the Fiscal Year for Australia.
(1) An MNE Group’s UTPR Percentage for a Fiscal Year for a jurisdiction that has a Qualified UTPR in force for the Fiscal Year is the percentage computed under the following formula: Start formula open bracket 50% times start fraction Number of employees in the jurisdiction over Number of employees in all UTPR jurisdictions end fraction close bracket plus open bracket 50% times start fraction Total value of tangible assets in jurisdiction over Total value of tangible assets in all UTPR Jurisdictions end fraction close bracket end formula where:
Number of employees in all UTPR jurisdictions means the total number of employees of all Constituent Entities of the MNE Group located in each jurisdiction that has a Qualified UTPR in force for the Fiscal Year.
Number of employees in the jurisdiction means the total number of employees of all Constituent Entities of the MNE Group located in the jurisdiction.
Total value of tangible assets in all UTPR jurisdictions means the sum of the Net Book Value of tangible assets for the Fiscal Year of all Constituent Entities of the MNE Group located in each jurisdiction that has a Qualified UTPR in force for the Fiscal Year.
Total value of tangible assets in the jurisdiction means the sum of the Net Book Value of tangible assets for the Fiscal Year of all Constituent Entities of the MNE Group located in the jurisdiction.
Note 1: Australia is a jurisdiction that has a Qualified UTPR in force for the Fiscal Year.
Note 2: For the treatment of Investment Entities, Insurance Investment Entities and Securitisation Entities, see section 2‑85.
(2) Despite subsection (1), the MNE Group’s UTPR Percentage for the Fiscal Year (the current Fiscal Year) for the jurisdiction is zero if: (a) an amount of the Total UTPR Top‑up Tax Amount for the MNE Group for a prior Fiscal Year is allocated to the jurisdiction for the prior Fiscal Year under the provisions of a law of the jurisdiction that is equivalent to this Part; and (b) that amount (the allocated amount) has not resulted in the Constituent Entities of the MNE Group located in the jurisdiction having an additional cash tax expense equal, in total, to the allocated amount, by the end of the period of 12 months after the end of the current Fiscal Year. (3) If an MNE Group’s UTPR Percentage for a Fiscal Year for a jurisdiction is zero under subsection (2), disregard the jurisdiction in computing the MNE Group’s UTPR Percentage for the Fiscal Year of another jurisdiction under subsection (1). (4) Subsection (2) does not apply if, disregarding this subsection, the MNE Group’s UTPR Percentage for the Fiscal Year for each jurisdiction that has a Qualified UTPR in force for the Fiscal Year is zero.
(1) For the purposes of this instrument, the amount of the Total UTPR Top‑up Tax Amount for an MNE Group for a Fiscal Year that is allocated to Australia under section 2‑60 (the Australian allocated amount) is distributed, in accordance with this section, to the Constituent Entities of the MNE Group that are located in Australia. (2) The amount of the Australian allocated amount distributed to a Constituent Entity of the MNE Group that is located in Australia is: (a) the Australian allocated amount; multiplied by: (b) the percentage computed under the formula in subsection (3). (3) The formula is as follows: Start formula open bracket 50% times start fraction Number of employees of CE in Australia over Number of employees of all CEs in Australia end fraction close bracket plus open bracket 50% times start fraction Total value of tangible assets of CE in Australia over Total value of tangible assets of all CEs in Australia end fraction close bracket end formula where:
Number of employees of all CEs in Australia means the total number of employees of all Constituent Entities of the MNE Group located in Australia.
Number of employees of CE in Australia means the total number of employees of the Constituent Entity located in Australia.
Total value of tangible assets of all CEs in Australia means the sum of the Net Book Value of tangible assets for the Fiscal Year of all Constituent Entities of the MNE Group located in Australia.
Total value of tangible assets of CE in Australia means the sum of the Net Book Value of tangible assets for the Fiscal Year of the Constituent Entity located in Australia.
For the purposes of sections 2‑65 and 2‑70: (a) the total number of employees is the total number of employees on a full‑time equivalent basis; and (b) treat independent contractors participating in the ordinary operating activities of a Constituent Entity as employees of the Constituent Entity.
(1) The Net Book Value of Tangible Assets for a Fiscal Year of a Constituent Entity of an MNE Group means the average of the beginning and end values for the Fiscal Year of the Constituent Entity’s tangible assets after taking into account accumulated depreciation, depletion, and impairment, as recorded in the financial statements of the Constituent Entity. (2) For the purposes of subsection (1), tangible assets do not include cash or cash equivalents, intangibles, or financial assets.
(1) For the purposes of section 2‑65, disregard the employees and the Net Book Value of Tangible Assets for a Fiscal Year of any of the following: (a) an Investment Entity; (b) an Insurance Investment Entity. (2) For the purposes of section 2‑70, disregard the employees and the Net Book Value of Tangible Assets for a Fiscal Year of any of the following: (a) an Investment Entity; (b) an Insurance Investment Entity; (c) a Securitisation Entity for the Fiscal Year. (3) Paragraph (2)(c) does not apply if: (a) no other Constituent Entities of the MNE Group (other than the Securitisation Entity) are located in Australia; or (b) each Constituent Entity of the MNE Group that is located in Australia is one of the following: (i) a Securitisation Entity; (ii) an Investment Entity; (iii) an Insurance Investment Entity. (4) Subsections (5) and (6) apply in relation to a Constituent Entity of an MNE Group (other than a Securitisation Entity, Investment Entity or Insurance Investment Entity) located in Australia if: (a) paragraph (2)(c) applies in relation to the MNE Group for a Fiscal Year; and (b) the Constituent Entity does not have a UTPR Top-up Tax Amount for the Fiscal Year; and (c) no other Constituent Entity of the MNE Group located in Australia has a UTPR Top-up Tax Amount for the Fiscal Year. (5) Treat the Constituent Entity as having one employee, for the Fiscal Year, for the purposes of the following definitions in subsection 2‑70(3): (a) the definition of Number of employees of all CEs in Australia; (b) the definition of Number of employees of CE in Australia. (6) Treat the sum of the Net Book Value of tangible assets of the Constituent Entity as being one Euro, for the Fiscal Year, for the purposes of the following definitions in subsection 2‑70(3): (a) the definition of Total value of tangible assets of all CEs in Australia; (b) the definition of Total value of tangible assets of CE in Australia.
For the purposes of sections 2‑65 and 2‑70, if a Constituent Entity of an MNE Group is a Permanent Establishment: (a) treat the employees of the Permanent Establishment as being the employees whose payroll costs are included in the separate financial accounts of the Permanent Establishment in accordance with Part 3‑4 (for the purposes of computing the Financial Accounting Net Income or Loss of the Permanent Establishment); and (b) treat the employees of the Main Entity in respect of the Permanent Establishment as not including the employees mentioned in paragraph (a); and (c) treat the tangible assets of the Permanent Establishment as being the tangible assets that are included in the separate financial accounts of the Permanent Establishment in accordance with Part 3‑4 (for the purposes of computing the Financial Accounting Net Income or Loss of the Permanent Establishment); and (d) treat the tangible assets of the Main Entity in respect of the Permanent Establishment as not including the tangible assets mentioned in paragraph (c).
(1) For the purposes of sections 2‑65 and 2‑70, if a Constituent Entity of an MNE Group is a Flow‑through Entity that is a Stateless Constituent Entity: (a) allocate, in accordance with subsection (2), the employees and the Net Book Value of Tangible Assets of the Flow‑through Entity to the Constituent Entities (if any) of the MNE Group that are located in the jurisdiction in which the Flow‑through Entity was created (each of which is a receiving Constituent Entity); and (b) to the extent that the employees and the Net Book Value of Tangible Assets of the Flow‑through Entity are not allocated under paragraph (a)—disregard the employees and the Net Book Value of Tangible Assets. (2) The number of employees of the Flow‑through Entity, or the Net Book Value of Tangible Assets of the Flow‑through Entity, that are allocated under paragraph (1)(a) to a receiving Constituent Entity is: (a) the number of those employees, or that Net Book Value of Tangible Assets; multiplied by: (b) the percentage computed under the formula in subsection 2‑70(3) in respect of the receiving Constituent Entity. (3) If the Flow‑through Entity is a Main Entity in respect of a Permanent Establishment, subsection (1) operates subject to section 2‑90.
Chapter 3—Computation of GloBE Income or Loss
The GloBE Income or Loss of a Constituent Entity of an MNE Group for a Fiscal Year is the Financial Accounting Net Income or Loss for the Constituent Entity for the Fiscal Year, adjusted as provided in this instrument.
(1) The Financial Accounting Net Income or Loss for a Constituent Entity of an MNE Group for a Fiscal Year is the net income or loss determined for the Constituent Entity (before any consolidation adjustments eliminating intra‑group transactions) in preparing Consolidated Financial Statements of the Ultimate Parent Entity of the MNE Group for the Fiscal Year. (2) For the purposes of subsection (1), take into account items of income and expense in the Consolidated Financial Statements only to the extent that those items: (a) reliably and consistently reflect the affairs of the Constituent Entity; and (b) are not reflected in the separate financial accounts of the Constituent Entity. (3) To avoid doubt, the Financial Accounting Net Income or Loss for the Constituent Entity for the Fiscal Year includes income, expenses, gains and losses arising from transactions between the Constituent Entity and any other Constituent Entity of the MNE Group.
Note: Financial Accounting Net Income or Loss may be adjusted to exclude such income, expenses, gains and losses if an election under subsection 3‑200(1) applies.
(4) However, the Financial Accounting Net Income or Loss for the Constituent Entity for a Fiscal Year does not include any amount attributable to any purchase accounting adjustment that: (a) is reflected in: (i) the Consolidated Financial Statements of the Ultimate Parent Entity of the MNE Group for the Fiscal Year; or (ii) the Constituent Entity’s financial accounts for the Fiscal Year; and (b) arises as a result of an Entity becoming a Constituent Entity of the MNE Group as a result of the acquisition of Ownership Interests in that Entity by an existing Constituent Entity. (5) Subsection (4) does not apply if: (a) the acquisition occurred before 1 December 2021; and (b) it is not reasonably practicable to determine the Constituent Entity’s Financial Accounting Net Income or Loss for the Fiscal Year in the absence of the adjustment. (6) Subsection (7) applies if it is not reasonably practicable to compute the Financial Accounting Net Income or Loss for a Constituent Entity of an MNE Group for a Fiscal Year based on the accounting standard (the UPE accounting standard) used in the preparation of Consolidated Financial Statements of the Ultimate Parent Entity of the MNE Group for the Fiscal Year. (7) Compute the Financial Accounting Net Income or Loss for the Constituent Entity for the Fiscal Year using another Acceptable Financial Accounting Standard or an Authorised Financial Accounting Standard if: (a) the financial accounts of the Constituent Entity for the Fiscal Year are maintained based on the other accounting standard; and (b) the information contained in those financial accounts is reliable; and (c) in the case of an Authorised Financial Accounting Standard—the financial accounts have been prepared subject to adjustments to prevent any Material Competitive Distortions; and (d) adjustments are made to eliminate permanent differences that: (i) arise for the Fiscal Year; and (ii) are, in the aggregate, in excess of 1 million Euros; and (iii) arise because of the application of a particular principle or standard under the other accounting standard (instead of the application of the UPE accounting standard) to items of income or expense or transactions; and (e) it appears from the content of the GloBE Information Return for the MNE Group for the Fiscal Year that the Financial Accounting Net Income or Loss for the Constituent Entity for the Fiscal Year has been computed in accordance with this section.
Sourced from the Federal Register of Legislation (legislation.gov.au), CC BY 4.0.
This instrument is the Taxation (Multinational—Global and Domestic Minimum Tax) Rules 2024.
This instrument is made under the Taxation (Multinational—Global and Domestic Minimum Tax) Act 2024.
Note: This instrument applies generally in relation to Fiscal Years starting on or after 1 January 2024: see subsection 5(1) of the Act. However, to the extent that this instrument applies to Australian UTPR Tax, it applies in relation to Fiscal Years starting on or after 1 January 2025: see subsection 5(2) of the Act.
(1) For the purposes of paragraph 20(1)(h) of the Act, the following Entities are prescribed: (a) an Excluded Exempt Income Entity; (b) an Excluded Non‑Profit Subsidiary. (2) An Entity is an Excluded Exempt Income Entity if: (a) at least 85% of the value of the Entity is owned (directly or through a chain of Excluded Entities) by one or more of the following (other than a Pension Services Entity): (i) an Excluded Entity under paragraph 20(1)(a), (b), (c), (d), (e) or (f) of the Act; (ii) if the Entity is an Ultimate Parent Entity—an Investment Fund or a Real Estate Investment Vehicle; and (b) substantially all of the Entity’s income is Excluded Dividends or Excluded Equity Gain or Loss that is excluded from the computation of GloBE Income or Loss in accordance with section 3‑20 or 3‑30 of this instrument. (3) An Entity is an Excluded Non‑Profit Subsidiary if: (a) 100% of the value of the Entity is owned (directly or indirectly) by one or more Non‑profit Organisations; and (b) the sum of the revenue of all Group Entities of the MNE Group of which the Entity is a Group Entity (other than such revenue as is attributable to a Group Entity of the MNE Group that is a Non‑profit Organisation, an Excluded Service Entity or an Excluded Exempt Income Entity): (i) does not exceed the MNE Group’s GloBE Threshold for the Fiscal Year; and (ii) is less than 25% of the total revenue of the MNE Group.
General foreign currency translation (1) Subsection (2) applies for the purposes of computing an amount under this instrument in relation to an MNE Group for a Fiscal Year, if the amount: (a) is denominated in a currency other than the reporting currency of the Consolidated Financial Statements of the Ultimate Parent Entity of the MNE Group (the relevant reporting currency); and (b) is not converted to the relevant reporting currency in the course of preparing the Consolidated Financial Statements; and (c) is not an amount to which subsection (4) or (6) applies. (2) Convert the amount to the relevant reporting currency using the foreign currency translation principles of the Authorised Financial Accounting Standard that would have been used to convert the amount to the relevant reporting currency if that conversion were undertaken in the course of preparing the Consolidated Financial Statements for the Fiscal Year. Foreign currency translation for materiality or other threshold (3) Subsection (4) applies for the purposes of determining if a materiality or other threshold mentioned in subsection 12(4) or section 35 of the Act, or in this instrument, that is denominated in Euros is satisfied or exceeded by an amount in respect of a Group, Entity or jurisdiction for a particular Fiscal Year. (4) If the amount is denominated in another currency, convert the amount from that currency to Euros using the average of the daily rates of exchange, in respect of the 2 currencies for the month of December included in the Fiscal Year immediately preceding the particular Fiscal Year, as quoted by: (a) the European Central Bank; or (b) if the European Central Bank does not quote a daily rate of exchange in respect of the 2 currencies—the Reserve Bank of Australia; or (c) if both the European Central Bank and the Reserve Bank of Australia do not quote a daily rate of exchange in respect of the 2 currencies—a source specified in a determination under subsection (5). (5) For the purposes of paragraph (4)(c), the Minister may, by legislative instrument, make a determination specifying a source quoting rates of exchange. Foreign currency translation of Top-up Tax amounts (6) If an amount of IIR Top-up Tax Amount, Domestic Top-up Tax Amount or UTPR Top-up Tax Amount for a Fiscal Year is denominated in a currency other than Australian currency (the foreign currency), convert the amount from the foreign currency to Australian currency using any of the following: (a) the daily rate of exchange as quoted by the Reserve Bank of Australia in respect of the 2 currencies on the last day of the Fiscal Year; (b) the daily rate of exchange as quoted by the central bank for the foreign currency in respect of the 2 currencies on the last day of the Fiscal Year; (c) a publicly and commercially available market exchange rate in respect of the 2 currencies on the last day of the Fiscal Year.
Chapter 2—Liability amounts
Constituent Entities (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) 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 (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).
(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 (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.
A Parent Entity’s Allocable Share of the Top‑up Tax of a Low‑Taxed Constituent Entity for a Fiscal Year is an amount equal to: (a) the Top‑up Tax of the Low‑Taxed Constituent Entity for the Fiscal Year; multiplied by: (b) the Parent Entity’s Inclusion Ratio for the Low‑Taxed Constituent Entity for the Fiscal Year.
Note 1: See section 2‑20 for the effect of the IIR offset mechanism on the Allocable Share.
Note 2: See section 7‑95 for the computation of a Parent Entity’s Allocable Share of the Top‑up Tax of a Constituent Entity that is an Investment Entity.
(1) The Inclusion Ratio, of a Parent Entity of an MNE Group, for a Low‑Taxed Constituent Entity for a Fiscal Year, is: (a) the GloBE Income of the Low‑Taxed Constituent Entity for the Fiscal Year, reduced by the amount of that GloBE Income attributable to Ownership Interests held by other owners (see subsection (2)); divided by: (b) the GloBE Income of the Low‑Taxed Constituent Entity for the Fiscal Year.
Note: See subsection (3) if the Low‑Taxed Constituent Entity is a Flow‑through Entity.
(2) For the purposes of paragraph (1)(a), the amount of GloBE Income attributable to Ownership Interests in the Low‑Taxed Constituent Entity held by other owners is the amount that would have been treated as attributable to such owners under the principles of the Acceptable Financial Accounting Standard used in the Consolidated Financial Statements of the Ultimate Parent Entity of the MNE Group on the following assumptions: (a) the Low‑Taxed Constituent Entity’s net income were equal to its GloBE Income; (b) the Parent Entity had prepared Consolidated Financial Statements in accordance with that Acceptable Financial Accounting Standard (the hypothetical Consolidated Financial Statements); (c) the Parent Entity held a Controlling Interest in the Low‑Taxed Constituent Entity such that all of the income and expenses of the Low‑Taxed Constituent Entity were consolidated on a line‑by‑line basis with those of the Parent Entity in the hypothetical Consolidated Financial Statements; (d) all of the Low‑Taxed Constituent Entity’s GloBE Income were attributable to transactions with persons that are not Group Entities of the MNE Group; (e) all Ownership Interests not held by the Parent Entity were held by owners that are not Group Entities of the MNE Group. (3) However, if the Low‑Taxed Constituent Entity is a Flow‑through Entity, treat references in this section to GloBE Income as not including any amount by which its Financial Accounting Net Income or Loss is reduced under paragraph 3‑255(1)(a) (amounts attributable to an owner that is not a Group Entity of the MNE Group).
(1) A Parent Entity of an MNE Group’s Allocable Share of the Top‑up Tax of a Low‑Taxed Constituent Entity is reduced if: (a) the Parent Entity holds an Indirect Ownership Interest in the Low‑Taxed Constituent Entity through an Intermediate Parent Entity or a Partially‑Owned Parent Entity of the MNE Group; and (b) the Intermediate Parent Entity or a Partially‑Owned Parent Entity is not eligible for an exclusion under subsection 2‑5(5), or an equivalent law of a non‑Australian jurisdiction. (2) 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 Intermediate Parent Entity or the Partially‑Owned Parent Entity under a Qualified IIR.
Constituent Entities generally (1) Subsection (2) applies if a Low‑Taxed Constituent Entity for a Fiscal Year of an Applicable MNE Group for the Fiscal Year: (a) is located in Australia for the Fiscal Year; or (b) is a Stateless Constituent Entity of the Applicable MNE Group that: (i) is created in Australia, and is a Stateless Constituent Entity under subsection 41(3) of the Act; or (iii) is a Permanent Establishment in relation to which paragraph 19(1)(d) of the Act applies, and is a place of business (including a deemed place of business) in Australia. (2) The Low‑Taxed Constituent Entity has a Domestic Top‑up Tax Amount for the Fiscal Year if it has Top‑up Tax for the Fiscal Year.
Note: If the Low‑Taxed Constituent Entity is a Securitisation Entity, its Domestic Top‑up Tax Amount for the Fiscal Year will be zero (see subsection 2‑35(3)) unless the only Constituent Entities of the MNE Group located in Australia are Securitisation Entities (see subsection 2‑35(4)).
Permanent Establishments (3) Subsection (4) applies if: (a) a Low‑Taxed Constituent Entity for a Fiscal Year of an Applicable MNE Group for the Fiscal Year is a Permanent Establishment of a Main Entity; and (b) the Low‑Taxed Constituent Entity is either: (i) located in Australia for the Fiscal Year; or (ii) a Stateless Constituent Entity covered by subparagraph (1)(b)(iii); and (c) the Main Entity is not located in Australia for the Fiscal Year. (4) If the Low‑Taxed Constituent Entity has Top‑up Tax for the Fiscal Year: (a) despite subsection (2), the Low‑Taxed Constituent Entity does not have a Domestic Top‑up Tax Amount for the Fiscal Year; and (b) the Main Entity has a Domestic Top‑up Tax Amount for the Fiscal Year in respect of the Low‑Taxed Constituent Entity. Joint Ventures and JV Subsidiaries (5) Subsection (6) applies if: (a) a Joint Venture of an MNE Group, or a JV Subsidiary of a Joint Venture of an MNE Group is: (i) located in Australia for a Fiscal Year; or (ii) a Flow‑through Entity created in Australia, and, under paragraph 6‑75(2)(c), treated as a Stateless Constituent Entity for a Fiscal Year; or (iii) treated under paragraph 6-75(2)(c) as a Stateless Constituent Entity that is a Permanent Establishment in relation to which paragraph 19(1)(d) of the Act applies, and a place of business (including a deemed place of business) in Australia, for a Fiscal Year; and (b) the MNE Group is an Applicable MNE Group for the Fiscal Year; and (c) the Joint Venture, or the 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).
(6) The Joint Venture, or the JV Subsidiary, has a Domestic Top‑up Tax Amount for the Fiscal Year if it has Top‑up Tax for the Fiscal Year. (7) Subsection (8) applies if: (a) a JV Subsidiary of a Joint Venture of an MNE Group is a Permanent Establishment of a Main Entity that is: (i) the
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