Section 166

Where the computation of a Constituent Entity’s

International Shipping Income or Qualified Ancillary

International Shipping Income results in a loss, the loss shall be excluded from the computation of its GloBE Income or Loss.

The aggregated Qualified Ancillary International Shipping

Income of all Constituent Entities located in a jurisdiction shall not exceed fifty per cent of the International Shipping

Income of those Constituent Entities.

Act 851

The costs incurred by a Constituent Entity that are directly attributable to its international shipping activities listed in the definition of “International Shipping Income”

and the costs directly attributable to its qualified ancillary activities listed in the definition of “Qualified Ancillary

International Shipping Income” shall be deducted from the

Constituent Entity’s revenues from such activities to compute its International Shipping Income and Qualified Ancillary

International Shipping Income.

Other costs incurred by a Constituent Entity that are indirectly attributable to a Constituent Entity’s international shipping activities and qualified ancillary activities shall be allocated on the basis of the Constituent Entity’s revenues from such activities in proportion to its total revenues.

All direct and indirect costs attributed to a Constituent

Entity’s International Shipping Income and Qualified Ancillary

International Shipping Income shall be excluded from the computation of its GloBE Income or Loss.

In order for a Constituent Entity’s International Shipping

Income and Qualified Ancillary International Shipping Income to qualify for the exclusion from its GloBE Income or Loss under this section, the Constituent Entity must demonstrate that the strategic or commercial management of all ships concerned is effectively carried on from within the jurisdiction where the Constituent Entity is located.

Allocation of Income or Loss between a Main Entity and a Permanent Establishment