7‑155 Effect of election—where positive 7‑155 Effect of election—where positive balance of Undistributed Net GloBE Income Account after 3 Fiscal Years, increase Top‑up Tax for tested year

7‑155 Effect of election—where positive balance of Undistributed Net GloBE Income Account after 3 Fiscal Years, increase Top‑up Tax for tested year

(1) This section applies if: (a) an election under subsection 7‑145(1) applies to: (i) an Investment Entity that is a Constituent Entity of an MNE Group; and (ii) a Constituent Entity‑owner of the Investment Entity; and (iii) a Fiscal Year (the tested year); and (b) there is an Undistributed Net GloBE Income Account for the Investment Entity for the tested year with a balance above zero at the end of the third subsequent Fiscal Year (the reporting year). (2) In computing the Investment Entity’s GloBE Income or Loss for the reporting year, include the Constituent Entity‑owner’s proportionate share of the Undistributed Net GloBE Income Account for the Investment Entity for the tested year (the Constituent Entity‑owner’s undistributed share). (3) For purposes of Chapter 2: (a) treat the Investment Entity as a Low‑Taxed Constituent Entity of the MNE Group for the reporting year; and (b) increase the Top‑up Tax of the Investment Entity for the reporting year by the amount that is: (i) the Constituent Entity‑owner’s undistributed share; multiplied by: (ii) the Minimum Rate.