Akta Kewangan (No. 2) 2023 · Updated to 29 Dec 2023 · Chapter 5
168. Allocation of Income or Loss from a Flow-through Entity
Feedback & supportThe Financial Accounting Net Income or Loss of a Constituent Entity that is a Flow-through Entity is allocated in the following manner:
in the case of a Permanent Establishment through which the business of the Entity is wholly or partly carried out, the Financial Accounting Net Income or Loss of the Entity is allocated to that Permanent
Establishment in accordance with section 167;
in the case of a Tax Transparent Entity that is not the Ultimate Parent Entity, any Financial Accounting
Net Income or Loss remaining after application of paragraph (a) is allocated to its Constituent
Entity-owners in accordance with their Ownership
Interests; and
in the case of a Tax Transparent Entity that is the
Ultimate Parent Entity or a Reverse Hybrid Entity, any
Financial Accounting Net Income or Loss remaining after application of paragraph (a) is allocated to it.
Subsection (1) shall be applied separately with respect to each Ownership Interest in the Flow-through Entity.
Prior to the application of subsection (1), the Financial
Accounting Net Income or Loss of a Flow-through Entity shall be reduced by the amount allocable to its owners that are not Group Entities and that hold their Ownership
Interest in the Flow-through Entity directly or through a Tax Transparent Structure.
Subsection (3) does not apply to—
an Ultimate Parent Entity that is a Flow-through
Entity; or
any Flow-through Entity owned by such an Ultimate
Parent Entity directly or through a Tax Transparent
Structure.
The Financial Accounting Net Income or Loss of a Flow-through Entity is reduced by the amount that is allocated to another Constituent Entity.
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