10‑60 Dual‑located entities

10‑60 Dual‑located entities

(1) Subsections (2) and (3) specify, for the purposes of section 43 of the Act, the jurisdiction a Constituent Entity of an MNE Group is located in for a Fiscal Year if, disregarding that section, it would be located in more than one jurisdiction under section 40 of the Act. (2) If: (a) the jurisdictions are party to a Tax Treaty; and (b) the Constituent Entity is deemed to be resident in only one of the jurisdictions for purposes of the Tax Treaty; the Constituent Entity is taken to be located in that jurisdiction for the Fiscal Year. (3) If subsection (2) does not apply to the Constituent Entity, the Entity is taken to be located in the following jurisdiction for the Fiscal Year: (a) if the Constituent Entity has, for the Fiscal Year, a greater amount of Covered Taxes (determined without reference to any taxes paid under a Controlled Foreign Company Tax Regime) paid or due to be paid in one of the jurisdictions than in the other jurisdictions—that jurisdiction; (b) if paragraph (a) does not apply, and the MNE Group has a greater Substance‑based Income Exclusion Amount for the Fiscal Year (computed under Part 5‑3 on the assumption that the Constituent Entity were the only Constituent Entity of the MNE Group located in the jurisdiction) in one of the jurisdictions than in the other jurisdictions—that jurisdiction; (c) if neither paragraph (a) nor (b) applies, and the Constituent Entity is the Ultimate Parent Entity of the MNE Group—the jurisdiction in which it was created.

Note: Under paragraph 43(2)(b) of the Act, a Constituent Entity of an MNE Group mentioned in subsection (1) of this section is a Stateless Constituent Entity of the MNE Group for a Fiscal Year if the Constituent Entity is not taken to be located in a jurisdiction for the Fiscal Year under subsections (2) and (3) of this section.