2‑25 Meaning of Domestic Top‑up Tax Amou2‑25 Meaning of Domestic Top‑up Tax Amount

2‑25 Meaning of Domestic Top‑up Tax Amount

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).