Akta Kewangan (No. 2) 2023 · Updated to 29 Dec 2023 · Chapter 9
192. Effective Tax Rate Computation for Investment Entities
Feedback & supportThis section shall apply to Constituent Entities that meet the definition of an Investment Entity, except Investment
Entities that are Tax Transparent Entities or subject to an election under section 193 or 194.
The Effective Tax Rate for an Investment Entity that is a Constituent Entity shall be calculated separately from the
Effective Tax Rate of the jurisdiction in which it is located.
The Effective Tax Rate for each such Investment Entity is equal to the Investment Entity’s Adjusted Covered Taxes divided by the Multinational Enterprise Group’s Allocable
Share of the Investment Entity’s GloBE Income determined under Chapter 5 of this Part.
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If there is more than one Investment Entity located in the jurisdiction, the Adjusted Covered Taxes and the
Multinational Enterprise Group’s Allocable Share of each
Investment Entity’s GloBE Income or Loss determined for each such Investment Entity are combined to compute the
Effective Tax Rate of all such Investment Entities.
An Investment Entity’s Adjusted Covered Taxes is the sum of the Adjusted Covered Taxes determined for the Investment Entity under section 169 attributable to the
Multinational Enterprise Group’s Allocable Share of the
Investment Entity’s GloBE Income and the Covered Taxes allocated to the Investment Entity under section 170.
The Investment Entity’s Adjusted Covered Taxes does not include any Covered Taxes accrued by the Investment Entity attributable to income that is not part of the Multinational
Enterprise Group’s Allocable Share of the Investment Entity’s
GloBE Income.
The Multinational Enterprise Group’s Allocable Share of the Investment Entity’s GloBE Income is equal to the
Allocable Share of the Investment Entity’s GloBE Income or Loss that would be determined for the Ultimate Parent
Entity in accordance with the rules of subsection 162(2)
taking into account only interests that are not subject to an election under section 193 or 194.
The Multinational Top-up Tax of a Constituent Entity that is an Investment Entity shall be an amount determined in accordance with the following formula:
A x (B – C)
where
A is the Multinational Top-up Tax Percentage for the Investment Entity;
B is the Investment Entity’s GloBE Income;
and
C is the Substance-based Income Exclusion for the Investment Entity.
Kewangan (No. 2)
The Multinational Top-up Tax Percentage for an
Investment Entity shall be the percentage point excess, if any, determined in accordance with the following formula:
(A – B)
where
A is the Minimum Rate; and
B is the Effective Tax Rate of the
Investment Entity.
If there is more than one Investment Entity located in the jurisdiction, the Investment Entity’s GloBE Income and the Substance-based Income Exclusion determined for each such Investment Entity are combined to compute the
Multinational Top-up Tax Percentage of all such Investment
Entities.
Notwithstanding subsection 180(3), the Substance-based
Income Exclusion for an Investment Entity shall be determined in accordance with section 180, and by taking into account only Eligible Tangible Assets and Eligible Payroll Costs of
Eligible Employees of the Investment Entities.
For the purposes of this section, “Multinational Enterprise
Group’s Allocable Share of the Investment Entity’s GloBE
Income” means an amount equal to the Allocable Share of the Investment Entity’s GloBE Income or Loss that would be determined for the Ultimate Parent Entity in accordance with the rules of subsection 162(2) taking into account only interests that are not subject to an election under section 193
or 194.