5‑85 Allocation of amounts in relation t5‑85 Allocation of amounts in relation to Flow‑through Entities

5‑85 Allocation of amounts in relation to Flow‑through Entities

(1) For the purposes of sections 5‑50, 5‑55 and 5‑65, if, in relation to a Fiscal Year, a Constituent Entity of an MNE Group is a Flow‑through Entity, deal with the Eligible Payroll Costs accrued for the Fiscal Year of its Eligible Employees and the carrying value for the Fiscal Year of its Eligible Tangible Assets by applying subsections (2) to (4) of this section in sequence. (2) If: (a) the Flow‑through Entity is a Tax Transparent Entity that is not the Ultimate Parent Entity of the MNE Group; and (b) a proportion of the Financial Accounting Net Income or Loss of the Flow‑through Entity for the Fiscal Year has been allocated to a Constituent Entity‑owner of the Flow‑through Entity under paragraph 3‑255(1)(c); allocate to the Constituent Entity‑owner the same proportion of the Flow‑through Entity’s Eligible Payroll Costs accrued for the Fiscal Year of its Eligible Employees and the carrying value for the Fiscal Year of its Eligible Tangible Assets (computed disregarding paragraph 5‑80(2)(c), this section and section 5‑90). (3) If: (a) the Flow‑through Entity is the Ultimate Parent Entity of the MNE Group; and (b) the Flow‑through Entity’s GloBE Income for the Fiscal Year has been reduced by an amount under subsection 7‑5(2); reduce the Flow‑through Entity’s Eligible Payroll Costs accrued for the Fiscal Year of its Eligible Employees and the carrying value for the Fiscal Year of its Eligible Tangible Assets by multiplying them by the proportion the amount mentioned in paragraph (b) bears to the Flow‑through Entity’s GloBE Income for the Fiscal Year, before the reduction mentioned in that paragraph. (4) If the Flow‑through Entity is not the Ultimate Parent Entity of the MNE Group, disregard the Flow‑through Entity’s remaining Eligible Payroll Costs accrued for the Fiscal Year of its Eligible Employees and the carrying value for the Fiscal Year of its Eligible Tangible Assets. (5) For the purposes of subsections (2) and (3): (a) treat Eligible Employees who are not located in the jurisdiction where the Constituent Entity‑owner or Ultimate Parent Entity is located as not being Eligible Employees; and (b) treat Eligible Tangible Assets that are not located in that jurisdiction as not being Eligible Tangible Assets of the Flow‑through Entity.