8‑95 Transitional CbCR Safe Harbour—spec8‑95 Transitional CbCR Safe Harbour—special rules for Investment Entities and their Constituent Entity‑owners

8‑95 Transitional CbCR Safe Harbour—special rules for Investment Entities and their Constituent Entity‑owners

Non‑qualifying Investment Entities (1) Subsections (2), (3) and (4) apply in relation to a Fiscal Year if both of the following apply to one or more Constituent Entities of an MNE Group that are Investment Entities (the non‑qualifying Investment Entities): (a) the non‑qualifying Investment Entities are CbCR Residents of a jurisdiction (the Investment Entity Jurisdiction) for the Fiscal Year; (b) an election under subsection (7) does not apply in relation to the non‑qualifying Investment Entities and the Fiscal Year. (2) For the purposes of section 8‑10, apply the principles in subsection (3) in computing the MNE Group’s: (a) Profit (Loss) before Income Tax; and (b) Total Revenue; and (c) Simplified Covered Taxes; for the Fiscal Year for each of the following jurisdictions (the relevant jurisdictions): (d) the Investment Entity Jurisdiction; (e) each jurisdiction of which a Constituent Entity‑owner of a non‑qualifying Investment Entity is a CbCR Resident. (3) For the purposes of subsection (2), the principles are as follows: (a) include a proportion of each non‑qualifying Investment Entity’s profit or loss before income tax for the Fiscal Year in the profit or loss before income tax for the Fiscal Year of each Constituent Entity‑owner of the non‑qualifying Investment Entity; (b) include a proportion of each non‑qualifying Investment Entity’s total revenues for the Fiscal Year in the total revenues for the Fiscal Year of each Constituent Entity‑owner of the non‑qualifying Investment Entity; (c) include a proportion of each non‑qualifying Investment Entity’s associated taxes for the Fiscal Year in the associated taxes for the Fiscal Year of each Constituent Entity‑owner of the non‑qualifying Investment Entity; (d) exclude so much of each non‑qualifying Investment Entity’s profit or loss before income tax, total revenues and associated taxes for the Fiscal Year as is attributable to Direct Ownership Interests in the non‑qualifying Investment Entity that are held by Entities that are not Group Entities of the MNE Group; (e) adjust the MNE Group’s Profit (Loss) before Income Tax for the relevant jurisdictions as necessary to ensure that the income and associated taxes of each non‑qualifying Investment Entity are only taken into account in the MNE Group’s Profit (Loss) before Income Tax for the jurisdictions of which the Constituent Entity‑owner is a CbCR Resident for the Fiscal Year. For the purposes of paragraphs (a), (b) and (c), the proportion, for a particular Constituent Entity‑owner of a non‑qualifying Investment Entity, is the proportion of the Ownership Interests in the non‑qualifying Investment Entity held by the Constituent Entity‑owner. (4) If section 8‑10 applies in relation to the MNE Group, the jurisdictions in which the non‑qualifying Investment Entities are located, and the Fiscal Year, compute the Top‑up Tax of the non‑qualifying Investment Entities for the Fiscal Year in accordance with Parts 7‑4, 7‑5 and 7‑6. In doing so: (a) disregard section 8‑10; and (b) in computing amounts under Parts 7‑4, 7‑5 or 7‑6 in relation to the non‑qualifying Investment Entities for the Fiscal Year, take into account amounts only to the extent that they are attributable to the non‑qualifying Investment Entities. Qualifying Investment Entities (5) Subsection (6) applies in relation to a Fiscal Year if: (a) a Constituent Entity of an MNE Group is an Investment Entity (the qualifying Investment Entity); and (b) an election under subsection (7) applies in relation to the qualifying Investment Entity and the Fiscal Year. (6) For the purposes of section 8‑10, treat the qualifying Investment Entity as being a Constituent Entity of the MNE Group that is not an Investment Entity. Election (7) A Filing Constituent Entity for an MNE Group may make an election for the MNE Group under this subsection that applies to a specified Constituent Entity of the MNE Group and a specified Fiscal Year covered by the Transition Period if: (a) the Constituent Entity is an Investment Entity; and (b) an election under subsection 7‑125(1) (Investment Entity Transparency Election) does not apply to the Investment Entity and the Fiscal Year; and (c) an election under subsection 7‑145(1) (Taxable Distribution Method Election) does not apply to the Investment Entity and the Fiscal Year; and (d) each Constituent Entity‑owner of the Investment Entity is a CbCR Resident of the same jurisdiction as the Investment Entity. Interpretation (8) For the purposes of this section, treat an Insurance Investment Entity as if it were an Investment Entity. (9) For the purposes of this section, treat each reference to a Constituent Entity‑owner of an Investment Entity as only including Constituent Entity‑owners that hold a Direct Ownership Interest in the Investment Entity.