Finance (No. 2) Act 2023 · Updated to 29 Dec 2023 · Chapter 10
195. GloBE Safe Harbour
Feedback & supportAt the election of the Filing Constituent Entity, and notwithstanding Chapter 7 of this Part, the Multinational
Filing Constituent Entity
“Filing Constituent Entity” means an Entity filing the return in accordance with section 201 or 202;
Top-up Tax for a jurisdiction (hereinafter referred to as
“the safe harbour jurisdiction”) shall be deemed to be zero for a Financial Year when the Constituent Entities located in this jurisdiction are eligible for a GloBE Safe Harbour, pursuant to the conditions provided under the GloBE
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;
Implementation Framework and applicable for that Financial
Year.
An election made for a jurisdiction under subsection (1)
shall not apply in circumstances where—
Malaysia could be allocated Multinational Top-up
Tax under this Part if the Effective Tax Rate for the safe harbour jurisdiction computed in accordance with Chapter 7 of this Part was below the Minimum
Rate;
the Director General notifies the Liable Constituent
Entity within thirty-six months after the filing of the information return of specific facts and circumstances that may have materially affected the eligibility of the Constituent Entities located in the safe harbour jurisdiction for the relevant safe harbour and invites the Liable Constituent Entity to clarify within six months the effect of those facts and circumstances on the eligibility of those Constituent Entities for that safe harbour; and
the Liable Constituent Entity fails to demonstrate within the response period that those facts and circumstances did not materially affect the eligibility of the Constituent Entities for the relevant safe harbour.
For the purposes of this section, “Liable Constituent
Entity” means one or several Constituent Entities located in Malaysia that could be liable for Multinational Top-up
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;
Tax or subject to an adjustment under Chapter 4 of this Part if the GloBE Safe Harbour in subsection (1) did not apply.