Global Minimum Tax Act — G-3.3 19
Exclusion of international shipping net income or loss 19 (1) In computing a constituent entity’s GloBE income or loss for a fiscal year, the constituent entity’s net income or loss from international shipping for that fiscal year is excluded. Definition of net income or loss from international shipping (2) Net income or loss from international shipping , of a constituent entity for a fiscal year, means the amount determined by the formula A + B where A is the constituent entity’s core international shipping income for the fiscal year; and B is the constituent entity’s qualified ancillary international shipping income for the fiscal year. Definition of core international shipping income (3) Core international shipping income , of a constituent entity for a fiscal year, means the amount determined by the formula A − B where A is the constituent entity’s core international shipping revenue for the fiscal year; and B is the constituent entity’s core international shipping costs for the fiscal year. Definition of core international shipping revenue (4) Core international shipping revenue , of a constituent entity for a fiscal year, means the constituent entity’s revenue for the fiscal year obtained in consideration for the entity’s performance of core international shipping activities. Definition of core international shipping costs (5) Core international shipping costs , of a constituent entity for a fiscal year, means the amount determined by the formula A + (B × C ÷ D) where A is the total costs incurred by the constituent entity for the fiscal year that are directly attributable to the entity’s performance of core international shipping activities; B is the total costs incurred by the constituent entity for the fiscal year that are indirectly attributable to the entity’s performance of core international shipping activities; C is the constituent entity’s core international shipping revenue for the fiscal year; and D is the constituent entity’s total revenue for the fiscal year from all sources. Definition of core international shipping activity (6) Core international shipping activity means an activity, if (a) the strategic or commercial management of the performance of that activity by the constituent entity is effectively carried on within the jurisdiction in which the constituent entity is located; and (b) the activity is any of the following: (i) international shipping, whether the ship is owned, leased or otherwise at the disposal of the constituent entity, (ii) arranging for another person to carry out international shipping under a slot-chartering arrangement, (iii) leasing a ship to be used for international shipping on charter fully equipped, crewed and supplied, (iv) leasing a ship to be used for international shipping on a bareboat charter basis to another constituent entity of the MNE group, (v) the participation in a pool, joint business or international operating agency for international shipping, (vi) the sale of a ship used for international shipping, provided that the ship has been held for use by the constituent entity for at least one year. Definition of qualified ancillary international shipping income (7) Qualified ancillary international shipping income , of a constituent entity that is located in a jurisdiction for a fiscal year, means (a) the constituent entity’s ancillary international shipping income, if A ≤ B ÷ 2 where A is the total of all amounts, each of which is the ancillary international shipping income of a group entity that is located in the jurisdiction for the fiscal year, and B is the total of all amounts, each of which is the core international shipping income of a group entity that is located in the jurisdiction for the fiscal year; or (b) in any other case, the amount determined by the formula B ÷ 2 × C ÷ A where C is the constituent entity’s ancillary international shipping income for the fiscal year. Definition of ancillary international shipping income (8) Ancillary international shi