Document ID: chunk:federal_register_of_legislation:F2024L01740:front:0:p44
Version: federal_register_of_legislation:F2024L01740
Segment Type: other
Provision Reference: 
Character Range: 110780–113445

to, or otherwise makes an investment in, another of the Constituent Entities (the recipient);
 (c) the investor is a High‑Tax Counterparty for the Fiscal Year;
 (d) the recipient is a Low‑Tax Entity for the Fiscal Year.

3‑190  Meaning of Low‑Tax Entity and High‑Tax Counterparty
 (1) A Constituent Entity of an MNE Group is a Low‑Tax Entity for a Fiscal Year if:
 (a) the Constituent Entity is located in a jurisdiction for the Fiscal Year; and
 (b) the jurisdiction:
 (i) is a Low‑Tax Jurisdiction in respect of the MNE Group for the Fiscal Year; or
 (ii) would be a Low‑Tax Jurisdiction in respect of the MNE Group for the Fiscal Year if the Effective Tax Rate of the MNE Group for the jurisdiction for the Fiscal Year were determined without regard to any income or expense accrued by the Constituent Entity in respect of an Intragroup Financing Arrangement.
 (2) A Constituent Entity of an MNE Group is a High‑Tax Counterparty for a Fiscal Year if:
 (a) the Constituent Entity is located in a jurisdiction for the Fiscal Year; and
 (b) the jurisdiction:
 (i) is not a Low‑Tax Jurisdiction in respect of the MNE Group for the Fiscal Year; or
 (ii) would not be a Low‑Tax Jurisdiction in respect of the MNE Group for the Fiscal Year if the Effective Tax Rate of the MNE Group for the jurisdiction for the Fiscal Year were determined without regard to any income or expense accrued by the Constituent Entity in respect of an Intragroup Financing Arrangement.

3‑195  Meaning of Low‑Tax Jurisdiction
  A Low‑Tax Jurisdiction, in respect of an MNE Group for a Fiscal Year, means a jurisdiction for which the MNE Group has:
 (a) Net GloBE Income for the Fiscal Year; and
 (b) an Effective Tax Rate for the Fiscal Year that is lower than the Minimum Rate.

3‑200  Adjustment—election to apply consolidated accounting treatment

Election
 (1) A Filing Constituent Entity for an MNE Group may make an election for the MNE Group under this subsection that applies to Constituent Entities of the MNE Group (each of which is a consolidated local entity):
 (a) that are located in a specified jurisdiction; and
 (b) that are included in a tax consolidation group (see subsection (4)).
 (2) An election under subsection (1) is a Five‑Year Election.

Adjustment
 (3) If an election is made under subsection (1), the following paragraphs apply in computing the amount of the GloBE Income or Loss of a consolidated local entity to which the election applies:
 (a) in computing that amount for a Fiscal Year to which the election applies, adjust the consolidated local entity's Financial Accounting Net Income or Loss for the Fiscal Year so as to exclude income, expenses, gains