Document ID: chunk:federal_register_of_legislation:F2024L01740:front:0:p98
Version: federal_register_of_legislation:F2024L01740
Segment Type: other
Provision Reference: 
Character Range: 245225–248045

Parent Entity's GloBE Income for a Fiscal Year is reduced under subsection (2), reduce its Covered Taxes for the Fiscal Year as follows:
 (a) first, compute the amount by which:
 (i) the Ultimate Parent Entity's GloBE Income for the Fiscal Year after the reduction;
  falls short of:
 (ii) the Ultimate Parent Entity's GloBE Income for the Fiscal Year before the reduction;
 (b) next, compute the fraction that is:
 (i) that shortfall;
  divided by:
 (ii) the Ultimate Parent Entity's GloBE Income for the Fiscal Year before the reduction;
 (c) next, multiply the Ultimate Parent Entity's Covered Taxes for the Fiscal Year by that fraction.
The result of paragraph (c) is the amount of the reduction under this subsection of the Ultimate Parent Entity's Covered Taxes for the Fiscal Year.

7‑10  Flow‑through Entity that is Ultimate Parent Entity—reduce GloBE Loss
 (1) This section applies if:
 (a) the Ultimate Parent Entity of an MNE Group is a Flow‑through Entity; and
 (b) an amount (the attributable loss) of the Ultimate Parent Entity's GloBE Loss for a Fiscal Year is attributable to a Direct Ownership Interest held by another Entity in the Ultimate Parent Entity.
 (2) Reduce the Ultimate Parent Entity's GloBE Loss for the Fiscal Year by the attributable loss (but not below zero), except to the extent that the holder of the Ownership Interest is not allowed to use the attributable loss in computing their separate taxable income.

7‑15  Application of sections 7‑5 and 7‑10 to Permanent Establishment
 (1) This section applies if:
 (a) the Ultimate Parent Entity of an MNE Group is a Flow‑through Entity; and
 (b) either:
 (i) the Ultimate Parent Entity; or
 (ii) if subsection (2) applies—the Tax Transparent Entity mentioned in that subsection;
  wholly or partly carries out its business through a Permanent Establishment.
 (2) For the purposes of subparagraph (1)(b)(ii), this subsection applies if the Ultimate Parent Entity holds an Ownership Interest in a Tax Transparent Entity that is:
 (a) a Direct Ownership Interest; or
 (b) an Indirect Ownership Interest held through a Tax Transparent Structure.
 (3) Subsection (4) applies if an amount (the attributable income) of the Permanent Establishment's GloBE Income for a Fiscal Year is attributable to a Direct Ownership Interest held by another Entity in the Ultimate Parent Entity.
 (4) Subsections 7‑5(2), (3) and (4) apply to the Permanent Establishment in the same way that they apply to an Ultimate Parent Entity.
 (5) Subsection (6) applies if an amount (the attributable loss) of the Permanent 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