Global Minimum Tax Act — G-3.3 15
Top-up tax payable 15 (1) The amount of the tax a person must pay in respect of an MNE group for a fiscal year is equal to the total of all amounts, each of which is an amount determined by the formula A − B where A is the allocable share, of the top-up amount of a constituent entity of the MNE group that is not located in Canada for the fiscal year, of (a) the person, if subparagraph 14 (1)(b)(i) applies, or (b) the relevant parent entity referred to in subparagraph 14 (1)(b)(ii), if that subparagraph applies; and B is the total of all amounts each of which is a portion of the top-up amount of the constituent entity for the fiscal year that is included in both (a) the amount determined for A for the fiscal year, and (b) the allocable share, of the top-up amount of the constituent entity for the fiscal year, of a relevant parent entity of the MNE group through which the person referred to in paragraph (a), or the relevant parent entity referred to in paragraph (b), of the description of A indirectly holds an ownership interest in the constituent entity. Definition of allocable share (2) The allocable share , of the top-up amount of a constituent entity of an MNE group for a fiscal year, of a relevant parent entity, means the amount determined by the formula A × B where A is the top-up amount of the constituent entity for the fiscal year; and B is the relevant parent entity’s inclusion ratio for the constituent entity for the fiscal year. Definition of inclusion ratio (3) The inclusion ratio , of a relevant parent entity for a constituent entity of an MNE group for a fiscal year, means the ratio determined by the formula (A − B) ÷ A where A is the GloBE income of the constituent entity for the fiscal year; and B is the GloBE income of the constituent entity for the fiscal year that would be attributable to ownership interests other than ownership interests held directly or indirectly by the relevant parent entity, under the principles of the financial accounting standard applicable in preparing the consolidated financial statements of the ultimate parent entity of the MNE group for the fiscal year, if the net income of the constituent entity were equal to its GloBE income and on the assumption that (a) the relevant parent entity had prepared consolidated financial statements (referred to in this subsection as “hypothetical consolidated financial statements”) in accordance with that financial accounting standard, (b) the relevant parent entity had a controlling interest in the constituent entity such that all of the income and expenses of the constituent entity were consolidated on a line-by-line basis with those of the relevant parent entity in the hypothetical consolidated financial statements, (c) none of the GloBE income of the constituent entity were attributable to transactions with group entities of the MNE group, and (d) no ownership interests, other than those held directly or indirectly by the relevant parent entity, were held by any group entity of the MNE group. Flow-through and investment entities (4) For the purposes of subsection (3), if a constituent entity of an MNE group is a flow-through entity, an investment entity or an insurance investment entity, none of the GloBE income of the constituent entity is to be regarded as attributable to ownership interests held by any entity that is not included in the MNE group. Inclusion ratio — deemed GloBE income (5) For the purposes of subsection (3), if the net GloBE income of the MNE group for a jurisdiction for a fiscal year is nil, the GloBE income of a constituent entity of the MNE group that is located in the jurisdiction for the fiscal year is deemed to be the amount determined by the formula A + B where A is the amount determined by the formula C ÷ D where C is the allocated adjustment top-up amount of the constituent entity for the fiscal year, and D is the minimum rate; and B is the amount determined by the formula E ÷ D where E is the excess negative tax expens