Global Minimum Tax Act — G-3.3 28
d flow-through tax benefits, if any, of the owner in respect of the ownership interest for the fiscal year, and E is the amount by which the owner’s current tax expense in respect of covered taxes in its financial accounts can reasonably be considered to have been increased (or to not have been reduced) in respect of those qualified flow-through tax benefits solely because of the application of the proportional amortization method, or another financial accounting method that provides similar results as to current tax expense, in respect of the ownership interest for the fiscal year, and (b) in any other case, the lesser of (i) the qualified flow-through tax benefits, if any, of the owner in respect of the ownership interest for the fiscal year, and (ii) the amount by which the owner’s current tax expense in respect of covered taxes in its financial accounts can reasonably be considered to have been reduced in the fiscal year because of those qualified flow-through tax benefits; and C is the amount determined by the formula F + G where F is (a) if the ownership interest is a proportional amortization method interest, the excess benefits of the owner in respect of the ownership interest for the fiscal year, and (b) in any other case, the amount by which the flow-through tax benefits of the owner in respect of the ownership interest for the fiscal year exceeds the adjusted investment amount of the owner in respect of the ownership interest for the fiscal year, except to the extent that the owner’s current tax expense in respect of covered taxes in its financial accounts can reasonably be considered to have been reduced in the fiscal year because of those flow-through tax benefits, and G is the recapture amount of the owner in respect of the ownership interest for the fiscal year. Proportional amortization method interest — election (3) A qualified flow-through ownership interest held by an owner that is a constituent entity of an MNE group that would not, in the absence of this subsection, be a proportional amortization method interest is irrevocably deemed to be a proportional amortization method interest if the filing constituent entity of the MNE group so elects in the later of (a) the fiscal year in which the ownership interest is first acquired by the owner; and (b) the first fiscal year in which (i) the owner is subject to a qualified IIR, qualified UTPR or qualified domestic minimum top-up tax, and (ii) the owner is a constituent entity of the MNE group. Deemed ownership interests — debt-accounted investments (4) For the purposes of this section, an investment, other than an ownership interest, in a particular tax transparent entity held by a particular constituent entity of an MNE group directly, or indirectly through one or more other tax transparent entities that are not constituent entities of the MNE group, is deemed to be an ownership interest held by the particular constituent entity in the particular tax transparent entity if the investment (a) is treated as an equity interest under the income tax laws of the jurisdiction in which the particular constituent entity is located; and (b) would be treated as an equity interest under an authorized financial accounting standard of the jurisdiction in which the particular tax transparent entity operates. Qualified flow-through ownership interest — anti-avoidance (5) An ownership interest in an entity held by an owner that would, in the absence of this subsection, be a qualified flow-through ownership interest is not a qualified flow-through ownership interest if (a) the owner (i) does not have a bona fide economic interest in the entity, or (ii) is protected from the loss of its investment in the entity; or (b) the tax laws of the jurisdiction in which the entity operates make receipt of the tax benefit in respect of any tax credits of the entity by the owner conditional on the owner or the developer of the project that originates the tax credits being subject to a qualifi