Document ID: chunk:federal_register_of_legislation:F2024L01740:front:0:p99
Version: federal_register_of_legislation:F2024L01740
Segment Type: other
Provision Reference: 
Character Range: 247799–250455

Establishment's GloBE Loss for a Fiscal Year is attributable to a Direct Ownership Interest held by another Entity in the Ultimate Parent Entity.
 (6) Subsection 7‑10(2) applies to the Permanent Establishment in the same way that it applies to an Ultimate Parent Entity.

Part 7‑2—Ultimate Parent Entity subject to Deductible Dividend Regime

7‑20  Ultimate Parent Entity subject to Deductible Dividend Regime—reduce GloBE Income and Covered Taxes
 (1) This section applies if:
 (a) the Ultimate Parent Entity of an MNE Group is subject to a Deductible Dividend Regime; and
 (b) the Ultimate Parent Entity distributes an amount (the dividend amount) referrable to its GloBE Income for a Fiscal Year as a Deductible Dividend within 12 months after the end of the Fiscal Year.
 (2) Reduce the Ultimate Parent Entity's GloBE Income for the Fiscal Year by the dividend amount (but not below zero) if any of the following conditions are satisfied:
 (a) both of the following apply:
 (i) the dividend is subject to Tax in the hands of the recipient of the dividend for a taxable period that ends within 12 months after the end of the Fiscal Year;
 (ii) the condition in subsection (3) is met;
 (b) the recipient of the dividend is an individual that:
 (i) is a tax resident in the jurisdiction in which the Ultimate Parent Entity is located; and
 (ii) holds Ownership Interests in the Ultimate Parent Entity that, in the aggregate, are a right to 5% or less of the profits and assets of the Ultimate Parent Entity;
 (c) the recipient of the dividend is:
 (i) a Governmental Entity of the jurisdiction in which the Ultimate Parent Entity is located; or
 (ii) an International Organisation, a Non‑profit Organisation, or a Pension Fund (other than a Pension Fund that is a Pension Services Entity) that was created and is managed in the jurisdiction in which the Ultimate Parent Entity is located.
 (3) For the purposes of subparagraph (2)(a)(ii), the condition in this subsection is met if:
 (a) the dividend is subject to Tax in the hands of the recipient of the dividend at a nominal rate that equals or exceeds the Minimum Rate; or
 (b) it can be reasonably expected that the sum of:
 (i) the Covered Taxes for the Fiscal Year paid by the Ultimate Parent Entity on an amount of GloBE Income to which the dividend amount relates; and
 (ii) the Taxes payable by the recipient of the dividend on the dividend amount;
  equals or exceeds the dividend amount multiplied by the Minimum Rate; or
 (c) the recipient of the dividend is an individual and the dividend is a patronage dividend from a supply Cooperative.
 (4) For the purposes of subsections (2) and (3),