Document ID: chunk:federal_register_of_legislation:C2025C00029:section:2:p20
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 2 (pt 20/66)
Character Range: 6375810–6378744

not a *prescribed dual resident), if it is a company; or     (a) a *wholly‑owned subsidiary of any of those *eligible tier‑1 companies; or
The entity must not be a non‑profit company (as defined in the Income Tax Rates Act 1986)                                                                                                                               (b) meet the conditions in item 1, 2 or 3 of the table in section 703‑25, if it is a trust; or  (b) an entity that would be covered by paragraph (a), if it were assumed that all of the membership interests that are beneficially owned by any of those eligible tier‑1 companies were owned by a single one of those eligible tier‑1 companies
                                                                                                                                                                                                                        (c) be a partnership

 (2) For the purposes of column 3 of the table, if there are one or more entities interposed between an entity (the test entity) and an eligible tier‑1 company, the test entity can be a wholly‑owned subsidiary of the eligible tier‑1 company only if each of the interposed entities:
 (a) meets the conditions in columns 1 and 2 of the table; or
 (b) holds membership interests only as a nominee of one or more entities each of which is:
 (i) an eligible tier‑1 company of the top company; or
 (ii) a wholly‑owned subsidiary of an eligible tier‑1 company of the top company, being a subsidiary that meets the conditions in columns 1 and 2 of the table.
 (3) For the purposes of subparagraph (2)(b)(ii), in determining whether an entity is a wholly‑owned subsidiary of an eligible *tier‑1 company of the *top company, assume that all of the *membership interests that are beneficially owned by eligible tier‑1 companies of the top company were owned by a single eligible tier‑1 company of the top company.

Only one eligible tier‑1 company in a potential MEC group
 (6) To avoid doubt, if:
 (a) there is only one *eligible tier‑1 company of a *top company; and
 (b) there are no entities which meet the requirements of the table in subsection (1); and
 (c) there are no entities for which the requirements mentioned in subparagraph (1)(b)(ii) are met; and
 (d) there are no entities for which the requirements mentioned in subparagraph (1)(b)(iii) are met;
the *potential MEC group derived from the eligible tier‑1 company consists of the eligible tier‑1 company alone.

When potential MEC group ceases to exist
 (7) If a *potential MEC group is derived from one or more *eligible tier‑1 companies of a *top company, the potential MEC group ceases to exist when:
 (a) none of those companies are eligible tier‑1 companies of the top company; or
 (b) there is a change in the identity of the top company, and the eligible tier‑1 companies that were members of the group immediately before the change are not