Document ID: chunk:federal_register_of_legislation:F2024L01740:front:0:p11
Version: federal_register_of_legislation:F2024L01740
Segment Type: other
Provision Reference: 
Character Range: 28329–31176

the Low‑Taxed Constituent Entity's net income were equal to its GloBE Income;
 (b) the Parent Entity had prepared Consolidated Financial Statements in accordance with that Acceptable Financial Accounting Standard (the hypothetical Consolidated Financial Statements);
 (c) the Parent Entity held a Controlling Interest in the Low‑Taxed Constituent Entity such that all of the income and expenses of the Low‑Taxed Constituent Entity were consolidated on a line‑by‑line basis with those of the Parent Entity in the hypothetical Consolidated Financial Statements;
 (d) all of the Low‑Taxed Constituent Entity's GloBE Income were attributable to transactions with persons that are not Group Entities of the MNE Group;
 (e) all Ownership Interests not held by the Parent Entity were held by owners that are not Group Entities of the MNE Group.
 (3) However, if the Low‑Taxed Constituent Entity is a Flow‑through Entity, treat references in this section to GloBE Income as not including any amount by which its Financial Accounting Net Income or Loss is reduced under paragraph 3‑255(1)(a) (amounts attributable to an owner that is not a Group Entity of the MNE Group).

Part 2‑3—IIR offset mechanism

2‑20  IIR offset mechanism
 (1) A Parent Entity of an MNE Group's Allocable Share of the Top‑up Tax of a Low‑Taxed Constituent Entity is reduced if:
 (a) the Parent Entity holds an Indirect Ownership Interest in the Low‑Taxed Constituent Entity through an Intermediate Parent Entity or a Partially‑Owned Parent Entity of the MNE Group; and
 (b) the Intermediate Parent Entity or a Partially‑Owned Parent Entity is not eligible for an exclusion under subsection 2‑5(5), or an equivalent law of a non‑Australian jurisdiction.
 (2) The amount of the reduction is the portion of the Parent Entity's Allocable Share of the Top‑up Tax that is brought into charge by the Intermediate Parent Entity or the Partially‑Owned Parent Entity under a Qualified IIR.

Part 2‑4—Domestic Top‑up Tax Amount

2‑25  Meaning of Domestic Top‑up Tax Amount

Constituent Entities generally
 (1) Subsection (2) applies if a Low‑Taxed Constituent Entity for a Fiscal Year of an Applicable MNE Group for the Fiscal Year:
 (a) is located in Australia for the Fiscal Year; or
 (b) is a Stateless Constituent Entity of the Applicable MNE Group that:
 (i) is created in Australia; or
 (ii) is a Stateless Constituent Entity under subsection 41(3) or 42(3) of the Act; or
 (iii) is a Permanent Establishment in relation to which paragraph 19(1)(d) of the Act applies, and is a place of business (including a deemed place of business) in Australia.
 (2) The Low‑Taxed Constituent Entity has a Domestic Top‑up Tax Amount for the Fiscal Year if it has Top‑up Tax for the Fiscal Year.
Note: If the Low‑Taxed Constituent Entity is a Securitisation Entity, its Domestic Top‑up Tax Amount