Document ID: chunk:federal_register_of_legislation:F2024L01740:front:0:p110
Version: federal_register_of_legislation:F2024L01740
Segment Type: other
Provision Reference: 
Character Range: 275014–277793

if the Constituent Entity is an Investment Entity; and
 (b) one or more specified Constituent Entity‑owners of the Investment Entity.
 (2) An election under subsection (1) is a Five‑Year Election.

7‑130  Effect of election—Investment Entity treated as Tax Transparent Entity
 (1) This section applies if an election under subsection 7‑125(1) applies to:
 (a) an Investment Entity that is a Constituent Entity of an MNE Group; and
 (b) a Constituent‑Entity owner of the Investment Entity; and
 (c) a Fiscal Year.
 (2) For the purposes of this instrument, treat the Investment Entity as a Tax Transparent Entity for the Fiscal Year in respect of Ownership Interests held by the Constituent Entity‑owner if, for the Fiscal Year:
 (a) the Constituent Entity‑owner of the Investment Entity is subject to tax, in the jurisdiction in which the Constituent Entity‑owner is located, under a mark‑to‑market or similar regime based on the annual changes in the fair value of its Ownership Interest in the Investment Entity; and
 (b) the tax rate applicable to the Constituent Entity‑owner with respect to income arising from those annual changes equals or exceeds the Minimum Rate.
 (3) Subsection (4) applies if:
 (a) a Constituent Entity owns an Indirect Ownership Interest in an Investment Entity (the first Investment Entity) through a Direct Ownership Interest in another Investment Entity (the other Investment Entity); and
 (b) the Constituent Entity is subject to a mark‑to‑market or similar regime in the jurisdiction in which it is located based on the annual changes in the fair value of its Direct Ownership Interest in the other Investment Entity.
 (4) For the purposes of the subsection (2), treat the Constituent Entity as being subject to tax under a mark‑to‑market or similar regime in the jurisdiction in which it is located based on the annual changes in the fair value of its Indirect Ownership Interest in the first Investment Entity.

7‑135  Effect of revocation of election—Investment Entity treated as Tax Transparent Entity
 (1) Subsection (2) applies if:
 (a) an election under subsection 7‑125(1) is revoked; and
 (b) a gain or loss arises from the disposition of an asset or liability held by the Investment Entity; and
 (c) the gain or loss arises in a Fiscal Year to which the election does not apply because of the revocation.
 (2) For the purposes of this instrument, compute the gain or loss based on the fair value of the asset or liability on the first day of the first Fiscal Year to which the election does not apply because of the revocation.

Part 7‑6—Taxable distribution method election

7‑140  Application of this Part
  This Part applies in relation to an Insurance Investment Entity in the same way that it applies in relation to an Investment