188. Multi-Parented Multinational Enterprise Groups

Terms defined in s 157

• Acceptable Financial Accounting Standard

  Acceptable Financial Accounting Standard

  Defined · s 157

  “Acceptable Financial Accounting Standard” means International Financial Reporting Standards and the generally accepted accounting principles of Australia, Brazil, Canada, Member States of the European Union, Member States of the European Economic Area, Hong Kong (China), Japan, Malaysia, Mexico, New Zealand, the People’s Republic of China, the Republic of India, the Republic of Korea, Russia, Singapore, Switzerland, the United Kingdom, and the United States of America;

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• Constituent Entity

  Constituent Entity

  Defined · s 157

  “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;

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• Designated Filing Entity

  Designated Filing Entity

  Defined · s 157

  “Designated Filing Entity” means the Constituent Entity, other than the Ultimate Parent Entity, that has been appointed by the Multinational Enterprise Group to file the information return on behalf of the Multinational Enterprise Group;

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• Entity

  Entity

  Defined · s 157

  “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;

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• Excluded Entity

  Excluded Entity

  Defined · s 157

  “Excluded Entity” means— (a) a Governmental Entity; (b) an International Organisation; (c) a Non-profit Organisation; (d) a Pension Fund; (e) an Investment Fund that is an Ultimate Parent Entity; (f) a Real Estate Investment Vehicle that is an Ultimate Parent Entity; or (g) an Entity— (i) where at least ninety-five per cent of the value of the Entity is owned directly or through a chain of Excluded Entities by one or more Excluded Entities referred above other than a Pension Services Entity and where that Entity— (A) operates exclusively or almost exclusively to hold assets or invest funds for the benefit of the Excluded Entity or Entities; or (B) only carries out activities that are ancillary to those carried out by the Excluded Entity or Entities; or (ii) where at least eighty-five per cent of the value of the Entity is owned directly or through a chain of Excluded Entities, by one or more Excluded Entities referred above other than a Pension Services Entity provided that substantially all of the Entity’s income is Excluded Dividends or Excluded Equity Gain or Loss that is excluded from the computation of GloBE Income or Loss in accordance with this Part; Finance (No. 2)

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• Group

  Group

  Defined · s 157

  “Group” means— (a) a collection of Entities that are related through ownership or control such that the assets, liabilities, income, expenses and cash flows of those Entities are— (i) included in the Consolidated Financial Statements of the Ultimate Parent Entity; or Finance (No. 2) (ii) excluded from the Consolidated Financial Statements of the Ultimate Parent Entity solely on size or materiality grounds, or on the grounds that the Entity is held for sale; or (b) an Entity 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 mentioned in paragraph (a);

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• Income Inclusion Rule

  Income Inclusion Rule

  Defined · s 157

  “Income Inclusion Rule” means the rules for the allocation of Multinational Top-up Tax as provided in Chapter 4 of this Part;

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• information return

  information return

  Defined · s 157

  “information return” means a return in the prescribed form as provided for under section 201;

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• Low-Taxed Constituent Entity

  Low-Taxed Constituent Entity

  Defined · s 157

  “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;

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• Multinational Enterprise Group

  Multinational Enterprise Group

  Defined · s 157

  “Multinational Enterprise Group” means any Group that includes at least one Entity or Permanent Establishment that is not located in the jurisdiction of the Ultimate Parent Entity; Finance (No. 2)

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• Permanent Establishment

  Permanent Establishment

  Defined · s 157

  “Permanent Establishment” means— (a) a place of business including a deemed place of business situated in a jurisdiction and treated as a permanent establishment in accordance with an applicable Tax Treaty in force provided that such jurisdiction taxes the income attributable to it in accordance with a provision similar to Article 7 of the OECD Model Tax Convention; (b) if there is no applicable Tax Treaty in force, a place of business including a deemed place of business in respect of which a jurisdiction taxes under its domestic law the income attributable to such place of business on a net basis similar to the manner in which it taxes its own tax residents; (c) if a jurisdiction has no corporate income tax system, a place of business including a deemed place of business situated in that jurisdiction that would be treated as a permanent establishment in accordance Finance (No. 2) with the OECD Model Tax Convention provided that such jurisdiction would have had the right to tax the income attributable to it in accordance with Article 7 of that model; or (d) a place of business or a deemed place of business that is not already described in paragraphs (a) to (c) through which operations are conducted outside the jurisdiction where the Entity is located provided that such jurisdiction exempts the income attributable to such operations;

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• Tax

  Tax

  Defined · s 157

  “Tax” means a compulsory unrequited payment to General Government;

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• Ultimate Parent Entity

  Ultimate Parent Entity

  Defined · s 157

  “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;

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