Malaysia legislation
Section 162
Section 162
(2)
A Parent Entity’s Inclusion Ratio for a Low-Taxed
Constituent Entity for a Financial Year shall be determined in accordance with the formula:
A – B
C where
A is the GloBE Income of the Low-Taxed
Constituent Entity for the Financial Year;
B is the amount of such income attributable to Ownership Interests held by other owners; and
C is the GloBE Income of the Low-Taxed
Constituent Entity for the Financial Year.
Act 851
(3)
The amount of GloBE Income attributable to Ownership
Interests in a Low-Taxed Constituent Entity held by other owners is the amount that would have been treated as attributable to such owners under the principles of the Acceptable Financial
Accounting Standard used in the Ultimate Parent Entity’s
Consolidated Financial Statements if the Low-Taxed Constituent
Entity’s net income were equal to its GloBE Income and—
(a)
the Parent Entity had prepared Consolidated Financial
Statements in accordance with that accounting standard referred to as the hypothetical Consolidated
Financial Statements;
(b)
the Parent Entity owned 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;
(c)
all of the Low-Taxed Constituent Entity’s GloBE
Income were attributable to transactions with persons that are not Group Entities; and
(d)
all Ownership Interests not directly or indirectly held by the Parent Entity were held by persons other than Group Entities.
(4)
In the case of a Flow-through Entity, GloBE Income under subsections (1) to (3) shall not include any income allocated, pursuant to subsection 168(3), to an owner that is not a Group Entity.
Income Inclusion Rule offset mechanism