7‑25 Ultimate Parent Entity subject to D7‑25 Ultimate Parent Entity subject to Deductible Dividend Regime—reduce GloBE Income and Covered Taxes of other Constituent Entities

7‑25 Ultimate Parent Entity subject to Deductible Dividend Regime—reduce GloBE Income and Covered Taxes of other Constituent Entities

(1) This section applies if: (a) the Ultimate Parent Entity of an MNE Group is subject to a Deductible Dividend Regime; and (b) the Ultimate Parent Entity holds: (i) a Direct Ownership Interest in a Constituent Entity of the MNE Group; or (ii) an Indirect Ownership Interest in a Constituent Entity of the MNE Group through a chain of other Constituent Entities of the MNE Group; and (c) the Constituent Entity is (or all of the Constituent Entities in the chain are) subject to the Deductible Dividend Regime; and (d) the Constituent Entity is (or all of the Constituent Entities in the chain are) located in the same jurisdiction as the Ultimate Parent Entity. (2) Subsection (3) applies if: (a) the Constituent Entity distributes an amount (the dividend amount) in respect of its GloBE Income for a Fiscal Year as a Deductible Dividend within 12 months after the end of the Fiscal Year; and (b) the Constituent Entity distributes some or all of the dividend amount to the Ultimate Parent Entity (directly or through the chain); and (c) the Ultimate Parent Entity distributes some or all of the dividend amount as a Deductible Dividend within 12 months after the end of the Fiscal Year; and (d) the condition in paragraph 7‑20(2)(a), (b) or (c) is satisfied in relation to the recipient of the dividend distributed by the Ultimate Parent Entity. (3) Subsections 7‑20(2), (3), (4), (5), (6) and (7) apply to the Constituent Entity in the same way that they apply to an Ultimate Parent Entity.