A Parent Entity’s Allocable Share of the Multinational
Parent Entity
“Parent Entity” means an Ultimate Parent Entity that is not an Excluded Entity, an Intermediate Parent Entity, or a Partially-Owned Parent Entity;
Top-up Tax of a Low-Taxed Constituent Entity is an amount equal to the Multinational Top-up Tax of the Low-Taxed Constituent
Entity as calculated under Chapter 7 of this Part multiplied by the Parent Entity’s Inclusion Ratio for the Low-Taxed
Entity
“Entity” means— (a) any legal person (other than a natural person); or (b) an arrangement that prepares separate financial accounts, such as a partnership or trust;
Constituent Entity for the Financial Year.
Constituent Entity
“Constituent Entity” means— (a) any Entity that is included in a Group; or (b) any Permanent Establishment of a Main Entity that is within paragraph (a) and which is treated as separate from the Main Entity and any other Permanent Establishment of that Main Entity, but does not include an Excluded Entity;
A Parent Entity’s Inclusion Ratio for a Low-Taxed
Constituent Entity for a Financial Year shall be determined in accordance with the formula:
Financial Year
“Financial Year” means an accounting period with respect to which the Ultimate Parent Entity of the Multinational Enterprise Group prepares its Consolidated Financial Statements and in the case of Consolidated Financial Statements as defined in paragraph (d) of the definition of “Consolidated Financial Statements”, Financial Year means the calendar year;
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.
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
Low-Taxed Constituent Entity
“Low-Taxed Constituent Entity” means a Constituent Entity of the Multinational Enterprise Group that is located in a Low-Tax Jurisdiction or a Stateless Constituent Entity that, in respect of a Financial Year, has GloBE Income and is subject to an Effective Tax Rate as determined under Chapter 7 of this Part in that Financial Year that is lower than the Minimum Rate;
Accounting Standard used in the Ultimate Parent Entity’s
Ultimate Parent Entity
“Ultimate Parent Entity” means either— (a) an Entity that— (i) owns directly or indirectly a Controlling Interest in any other Entity; and (ii) is not owned, with a Controlling Interest, directly or indirectly by another Entity; or (b) the Main Entity of a Group that is located in one jurisdiction and has one or more Permanent Establishments located in other jurisdictions provided that the Entity is not a part of another Group;
Consolidated Financial Statements if the Low-Taxed Constituent
Entity’s net income were equal to its GloBE Income and—
the Parent Entity had prepared Consolidated Financial
Statements in accordance with that accounting standard referred to as the hypothetical Consolidated
Financial Statements;
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;
all of the Low-Taxed Constituent Entity’s GloBE
Income were attributable to transactions with persons that are not Group Entities; and
all Ownership Interests not directly or indirectly held by the Parent Entity were held by persons other than Group Entities.
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.
Group Entity
“Group Entity” means, in respect of any Entity or Group, an Entity that is a member of the same Group;