Document ID: chunk:federal_register_of_legislation:F2024L01740:front:0:p118
Version: federal_register_of_legislation:F2024L01740
Segment Type: other
Provision Reference: 
Character Range: 295225–297922

Simplified ETR, for a jurisdiction for a Fiscal Year, is the amount equal to:
 (a) the MNE Group's Simplified Covered Taxes for the jurisdiction for the Fiscal Year;
divided by:
 (b) the MNE Group's Profit (Loss) before Income Tax for the jurisdiction for the Fiscal Year.

8‑50  Meaning of Simplified Covered Taxes
 (1) An MNE Group's Simplified Covered Taxes for a jurisdiction for a Fiscal Year is its income tax expense for the jurisdiction for the Fiscal Year that would be reported in its Qualified Financial Statements for the Fiscal Year, if the assumption in subsection (2) were made.
 (2) For the purposes of subsection (1), assume that the following were disregarded:
 (a) if the income or loss of a Constituent Entity of the MNE Group is not included in the MNE Group's Qualified CbC Report in relation to the jurisdiction for the Fiscal Year—income tax expense for that Constituent Entity;
 (b) taxes that are not Covered Taxes;
 (c) uncertain tax positions.

8‑55  Meaning of Transition Rate
  The Transition Rate for a Fiscal Year means:
 (a) if the Fiscal Year starts in the 2023 or 2024 calendar year—15%; or
 (b) if the Fiscal Year starts in the 2025 calendar year—16%; or
 (c) if the Fiscal Year starts in the 2026 calendar year—17%.

Subdivision D—Routine profits test

8‑60  Meeting the Routine profits test
 (1) An MNE Group meets the Routine profits test for a jurisdiction for a Fiscal Year if the MNE Group's Profit (Loss) before Income Tax for the jurisdiction for the Fiscal Year is equal to or less than the MNE Group's Substance‑based Income Exclusion Amount for the jurisdiction for the Fiscal Year.
 (2) For the purposes of subsection (1), in computing the Substance‑based Income Exclusion Amount mentioned in that subsection, treat a Constituent Entity of the MNE Group as being located in the jurisdiction for the Fiscal Year if, and only if:
 (a) the Constituent Entity is a CbCR Resident of the jurisdiction for the Fiscal Year; and
 (b) the Constituent Entity is located in the jurisdiction for the Fiscal Year.
 (3) To avoid doubt, for the purposes of subsection (1), in computing the Substance‑based Income Exclusion Amount mentioned in that subsection, apply the rules in Part 9‑2 (Transitional relief for Substance‑based Income Exclusion).

8‑65  Meaning of CbCR Resident
  A Constituent Entity of an MNE Group is a CbCR Resident of a jurisdiction for a Fiscal Year if:
 (a) it is recorded as a resident of the jurisdiction in the Country‑by‑Country Report of the MNE Group for the Fiscal Year; or
 (b) if subsection 8‑35(3) or (4) applies in relation to the MNE Group—the Constituent Entity would have been recorded as a resident of the jurisdiction in the