Global Minimum Tax Act — G-3.3 47
y 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 parent entity of an MNE group is located for a fiscal year if (a) the ultimate parent entity is a flow-through entity; and (b) it is not the case that all the ownership interests in the ultimate parent entity are held by qualified persons. Tax-neutral ultimate parent entities — adjustments (10) If an ultimate parent entity of an MNE group is a flow-through entity or subject to a deductible dividend regime, (a) the profit (loss) before income tax of the MNE group for the jurisdiction where the ultimate parent entity is located is to be adjusted to exclude any profit (loss) before income tax of the ultimate parent entity to the extent that such amount is (i) attributable to an ownership interest held by a qualified person, or (ii) distributed in respect of an ownership interest held by a qualified person; and (b) the qualifying income tax expense of any constituent entity of the MNE group is adjusted to exclude any taxes in respect of the profit (loss) before income tax that is excluded under paragraph (a). Investment entities as standard constituent entities (11) For the purposes of this section, an investment entity or insurance investment entity is treated as a standard constituent entity of an MNE group for a fiscal year, if (a) the investment entity is included in the MNE group; (b) all the constituent entities of the MNE group with direct ownership interests in the investment entity or insurance investment entity are located in the same jurisdiction as the investment entity or insurance investment entity; and (c) no election under subsection 41 (1) or 42 (2) is in effect in respect of the investment entity or insurance investment entity for the fiscal year. Investment entities — amounts reflected in owners’ jurisdiction (12) If subsection (11) does not apply in respect of an investment entity or insurance investment entity that is a constituent entity of an MNE group for a fiscal year, for the purposes of applying subsections (3) to (6), the profit (loss) before income tax and total revenues of the MNE group attributable to, and qualifying income tax expense of, the investment entity or insurance investment entity are to be reflected in the jurisdictions where its direct constituent entity-owners are located, in proportion to their respective ownership interest in the investment entity or insurance investment entity. Location of investment entities (13) For the purposes of this section, an investment entity or insurance investment entity is considered to be located in the jurisdiction where it is resident for the purposes of a qualified country-by-country report. Hybrid arbitrage arrangements (14) For the purposes of applying subsections (3) to (6) in respect of an MNE group for a jurisdiction for a fiscal year, (a) the profit (loss) before income tax of the MNE group for the jurisdiction for the year is to exclude any expense or loss arising as a result of (i) a deduction/non-inclusion arrangement, or (ii) a duplicate loss arrangement; and (b) the qualifying income tax expense of a standard constituent entity of the MNE group that is located in the jurisdiction for the fiscal year is to exclude any income tax expense arising as a result of a duplicate tax recognition arrangement.