2‑5 Meaning of IIR Top‑up Tax Amount2‑5 Meaning of IIR Top‑up Tax Amount

2‑5 Meaning of IIR Top‑up Tax Amount

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.