Document ID: chunk:federal_register_of_legislation:F2024L01740:front:0:p85
Version: federal_register_of_legislation:F2024L01740
Segment Type: other
Provision Reference: 
Character Range: 212888–215571

Entities

5‑120  Minority‑Owned Constituent Entities that comprise a Minority‑Owned Subgroup
 (1) This section applies if 2 or more Constituent Entities of an MNE Group (the actual group) are Minority‑Owned Constituent Entities (each of which is a MOCE) that comprise a Minority‑Owned Subgroup.
 (2) For the purposes mentioned in subsection (3):
 (a) treat the MOCEs as comprising a separate MNE Group (the deemed group); and
 (b) treat the MOCEs as not being Constituent Entities of the actual group.
 (3) The purposes are as follows:
 (a) computing the Top‑up Tax of each MOCE;
 (b) computing the Top‑up Tax of each Constituent Entity of the actual group (other than a MOCE);
 (c) determining whether each Constituent Entity of the actual group (including a MOCE) is a Low‑Taxed Constituent Entity.
Note 1: For paragraph (a), to compute the Top‑up Tax of a MOCE, it is necessary to compute the Effective Tax Rate and Jurisdictional Top‑up Tax of the deemed group for the jurisdiction in which it is located.
Note 2: For paragraph (c), to determine whether a MOCE is a Low‑Taxed Constituent Entity, it is necessary to compute the Effective Tax Rate and Net GloBE Income of the deemed group for the jurisdiction in which it is located (see section 3‑195).
 (4) Subsection (2) does not apply for the purposes of Part 5‑5 (De minimis exclusion).

5‑125  Minority‑Owned Constituent Entities that are not part of a Minority‑Owned Subgroup
 (1) This section applies if a Constituent Entity of an MNE Group is a Minority‑Owned Constituent Entity (the MOCE) that:
 (a) is not a part of a Minority‑Owned Subgroup; and
 (b) is not an Investment Entity.
 (2) For the purposes mentioned in subsection (3), treat the MOCE as the only Constituent Entity of the MNE Group located in the jurisdiction in which it is located.
 (3) The purposes are as follows:
 (a) computing the Top‑up Tax of the MOCE;
 (b) determining whether the MOCE is a Low‑Taxed Constituent Entity.
Note 1: For paragraph (a), to compute that Top‑up Tax, it is necessary to compute the Effective Tax Rate and Jurisdictional Top‑up Tax of the MNE Group for the jurisdiction in which it is located, on the assumption that the MOCE is the only Constituent Entity of the MNE Group located in the jurisdiction.
Note 2: For paragraph (b), to determine whether the MOCE is a Low‑Taxed Constituent Entity, it is necessary to compute the Effective Tax Rate and Net GloBE Income of the MNE Group for the jurisdiction in which it is located (see section 3‑195), on the assumption that the MOCE is the only Constituent Entity of the MNE Group located in the jurisdiction.
 (4) For the purposes mentioned in subsection (5), treat the MOCE