Global Minimum Tax Act — G-3.3 47
ansitional safe harbour, in the total revenues and profit (loss) before income tax of the MNE group for the jurisdiction where the particular standard constituent entity is located for the fiscal year. De minimis threshold test (3) The de minimis threshold test is met, in respect of an MNE group for a jurisdiction in a fiscal year, if (a) the total revenues of the MNE group for the jurisdiction for the year is less than €10 million; and (b) the profit (loss) before income tax of the MNE group for the jurisdiction for the year is less than €1 million. Simplified effective tax rate test (4) The simplified effective tax rate test is met, in respect of an MNE group for a jurisdiction in a fiscal year, if the simplified effective tax rate of the standard constituent entities of the MNE group that are located in that jurisdiction is (a) in the case of a fiscal year beginning before January 1, 2025, at least 15%; (b) in the case of a fiscal year beginning in 2025, at least 16%; or (c) in the case of a fiscal year beginning after December 31, 2025, at least 17%. Simplified effective tax rate (5) The simplified effective tax rate of the standard constituent entities of an MNE group that are located in a jurisdiction in a fiscal year is the result (expressed as a percentage rounded to four decimal points) of the formula A ÷ B where A is the total of all amounts each of which is the qualifying income tax expense of a standard constituent entity of the MNE group that is located in the jurisdiction for the fiscal year; and B is the profit (loss) before income tax of the MNE group for the jurisdiction for the fiscal year. Routine profits test (6) The routine profits test is met, in respect of an MNE group for a jurisdiction in a fiscal year, if (a) the qualified substance-based income exclusion amount for the jurisdiction for the year is equal to or greater than the profit (loss) before income tax of the MNE group for the jurisdiction for the year; or (b) the profit (loss) before income tax of the MNE group for the jurisdiction for the year is nil or reflects an overall loss. Application to joint ventures (7) For the purposes of applying this section to a joint venture or joint venture group (a) subsection (2) is to be read without reference to its paragraph (b); (b) references to “MNE group” are to be read as references to “joint venture group”, other than in the expression “filing constituent entity of an MNE group”, paragraphs (2)(c) and (d) and subsection (8); (c) references to “standard constituent entity” are to be read as references to “joint venture entity”, other than in subsection (8); (d) references to “MNE group’s qualified country-by-country report” are to be read as references to “joint venture group’s qualified financial statements”; (e) in applying the definition qualified financial statements in subsection (1) in relation to the joint venture group (i) the reference to “ultimate parent entity” in subparagraph (a)(i) of that definition is to be read as a reference to “joint venture”, and (ii) the reference to “the financial accounts of the standard constituent entity that are used for preparation of the MNE group’s country-by-country report” in subparagraph (a)(iii) of that definition is to be read as a reference to “the financial accounts of the joint venture entity that would be used if a qualified country-by-country report had been prepared in respect of the joint venture group”; and (f) the definition qualified substance-based income exclusion amount in subsection (1) is to be read as “means the substance-based income exclusion amount of the joint venture group for the jurisdiction for the fiscal year”. Application to minority-owned constituent entities (8) For the purposes of this section, a minority-owned constituent entity is treated as a standard constituent entity of an MNE group. Tax-neutral ultimate parent entities (9) No election may be made under subsection (2) in respect of the jurisdiction where the ultimate p