Document ID: chunk:federal_register_of_legislation:F2024L01740:reg:10:p9
Version: federal_register_of_legislation:F2024L01740
Segment Type: reg
Provision Reference: reg 10 (pt 9/10)
Character Range: 372378–375047

or incurred by the direct owner of that Entity in proportion to its interest in that Entity.
 (2) An Ownership Interest in an Entity or a Permanent Establishment that is a Constituent Entity is held through a Tax Transparent Structure if that Ownership Interest is an Indirect Ownership Interest held through a chain of Tax Transparent Entities.

10‑50  Deemed Flow‑through Entity and Tax Transparent Entity
 (1) Subsection (2) applies if a Constituent Entity:
 (a) is not a tax resident of any jurisdiction; and
 (b) is not subject to a Covered Tax or a Qualified Domestic Minimum Top‑up Tax based on its place of management, place of creation, or similar criteria.
 (2) For the purposes of this instrument, treat the Constituent Entity as a Flow‑through Entity and a Tax Transparent Entity in respect of its income, expenditure, profit or loss to the extent that:
 (a) its owners are located in a jurisdiction that treats the Entity as fiscally transparent; and
 (b) it does not have a place of business in the jurisdiction where it was created; and
 (c) the income, expenditure, profit or loss is not attributable to a Permanent Establishment in respect of which it is the Main Entity.

10‑55  Meaning of Hybrid Entity
  An Entity that is treated as a separate taxable person for income tax purposes in the jurisdiction where it is located is a Hybrid Entity with respect to its income, expenditure, profit or loss, to the extent that it is fiscally transparent in the jurisdiction in which its owner is located.

Part 10‑3—Location of dual‑located entities

10‑60  Dual‑located entities
 (1) Subsections (2) and (3) specify, for the purposes of section 43 of the Act, the jurisdiction a Constituent Entity of an MNE Group is located in for a Fiscal Year if, disregarding that section, it would be located in more than one jurisdiction under section 40 of the Act.
 (2) If:
 (a) the jurisdictions are party to a Tax Treaty; and
 (b) the Constituent Entity is deemed to be resident in only one of the jurisdictions for purposes of the Tax Treaty;
the Constituent Entity is taken to be located in that jurisdiction for the Fiscal Year.
 (3) If subsection (2) does not apply to the Constituent Entity, the Entity is taken to be located in the following jurisdiction for the Fiscal Year:
 (a) if the Constituent Entity has, for the Fiscal Year, a greater amount of Covered Taxes (determined without reference to any taxes paid under a Controlled Foreign Company Tax Regime) paid or due to be paid in one of the jurisdictions than in the other jurisdictions—that jurisdiction;
 (b) if paragraph (a) does not apply, and the MNE Group has a greater Substance‑based Income