2‑55 Meaning of Total UTPR Top‑up Tax Am2‑55 Meaning of Total UTPR Top‑up Tax Amount

2‑55 Meaning of Total UTPR Top‑up Tax Amount

(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.