Document ID: chunk:federal_register_of_legislation:F2024L01740:front:0:p59
Version: federal_register_of_legislation:F2024L01740
Segment Type: other
Provision Reference: 
Character Range: 148696–151524

not taken into account.

4‑65  Allocation of amounts from Constituent Entity‑owner to Hybrid Entity or Reverse Hybrid Entity
 (1) An amount in respect of Covered Taxes for a Fiscal Year is allocated from a Constituent Entity‑owner of a Constituent Entity that is a Hybrid Entity to the Hybrid Entity if:
 (a) the Constituent Entity‑owner holds an Ownership Interest in the Hybrid Entity; and
 (b) the amount is:
 (i) accrued in the financial accounts of the Constituent Entity‑owner for the Fiscal Year; and
 (ii) so accrued in respect of income of the Hybrid Entity.
 (2) Subsection (1) applies in relation to a Constituent Entity‑owner and a Constituent Entity that is a Reverse Hybrid Entity in the same way that it applies in relation to a Constituent Entity‑owner and a Hybrid Entity.

4‑70  Amounts accrued in financial accounts of Constituent Entity‑owner on distribution from Constituent Entity to Constituent Entity‑owner—allocation to Constituent Entity
  An amount in respect of Covered Taxes for a Fiscal Year is allocated from a Constituent Entity‑owner of a Constituent Entity to the Constituent Entity if the amount is:
 (a) accrued in the financial accounts of the Constituent Entity‑owner for the Fiscal Year; and
 (b) so accrued in respect of distributions or deemed distributions during the Fiscal Year from the Constituent Entity to the Constituent Entity‑owner that arise from the direct Ownership Interests that it holds in the Constituent Entity.

4‑75  Allocation of amounts in respect of Passive Income—inclusion in Constituent Entity's Adjusted Covered Taxes
 (1) If an amount in respect of Covered Taxes for a Fiscal Year is allocated to a Constituent Entity of an MNE Group under section 4‑55 or 4‑65 in respect of Passive Income, the lesser of the following amounts is included in the Constituent Entity's Adjusted Covered Taxes for the Fiscal Year:
 (a) the amount in respect of Covered Taxes allocated in respect of the Passive Income;
 (b) the amount that is:
 (i) the Top‑up Tax Percentage for the Fiscal Year of the MNE Group for the jurisdiction in which the Constituent Entity is located (computed disregarding the amount in respect of Covered Taxes allocated to the Constituent Entity under section 4‑55 or 4‑65 in respect of Passive Income);
  multiplied by:
 (ii) the Constituent Entity's Passive Income for the Fiscal Year, to the extent that is includible under any Controlled Foreign Company Tax Regime or fiscal transparency rule.
 (2) If, because of subsection (1), the amount in respect of Covered Taxes for the Fiscal Year allocated to the Constituent Entity falls short of what it would be disregarding subsection (1), do not allocate the shortfall to the Constituent Entity under sections 4‑55 or 4‑65.

4‑80  Allocation of amounts from Permanent Establishment to Main Entity
 (1)