§ 17 — Effective tax rate for constituent entities other than special entities

17.—(1) In this Part, the effective tax rate for the constituent entities (not being special entities) of an MNE group located in a jurisdiction for a financial year is determined by the formula where —(a)

A is the sum of the adjusted covered taxes (including any negative amount of adjusted covered taxes) for that financial year of those constituent entities; and

(b)

B is the sum of the GloBE income or loss for that financial year of those constituent entities.

(2) In subsection (1), if B is nil or a negative amount, the effective tax rate for those constituent entities for that financial year is 15%.

(3) In subsection (1), if A is a negative amount and B is a positive amount — (a)

the effective tax rate for those constituent entities for that financial year is nil; and

(b)

A is treated as negative tax carried forward for those constituent entities.

(4) Where, because of subsection (3) or section 21(2), an MNE group has an amount of negative tax carried forward for its constituent entities (not being special entities) located in a jurisdiction that has not been deducted under this subsection —(a)

to the extent possible, the amount of negative tax is deducted against A in subsection (1) for the next financial year in which the MNE group has a positive amount of both A and B for that jurisdiction;

(b)

A for the MNE group for that jurisdiction for that financial year is reduced accordingly (but not below nil); and

(c)

any amount remaining undeducted is to be carried forward to the financial year following that financial year, and paragraphs (a) and (b) apply with the necessary modifications in relation to that amount.

(5) The Minister may make regulations under section 84 to provide for the recalculation, in a subsequent financial year, of the effective tax rate for the constituent entities (not being special entities) of an MNE group located in a jurisdiction for a financial year in accordance with the GloBE rules.

—(1) In this Part, the effective tax rate for the constituent entities (not being special entities) of an MNE group located in a jurisdiction for a financial year is determined by the formula where —(a)

A is the sum of the adjusted covered taxes (including any negative amount of adjusted covered taxes) for that financial year of those constituent entities; and

(b)

B is the sum of the GloBE income or loss for that financial year of those constituent entities.

(2) In subsection (1), if B is nil or a negative amount, the effective tax rate for those constituent entities for that financial year is 15%.

(3) In subsection (1), if A is a negative amount and B is a positive amount — (a)

the effective tax rate for those constituent entities for that financial year is nil; and

(b)

A is treated as negative tax carried forward for those constituent entities.

(4) Where, because of subsection (3) or section 21(2), an MNE group has an amount of negative tax carried forward for its constituent entities (not being special entities) located in a jurisdiction that has not been deducted under this subsection —(a)

to the extent possible, the amount of negative tax is deducted against A in subsection (1) for the next financial year in which the MNE group has a positive amount of both A and B for that jurisdiction;

(b)

A for the MNE group for that jurisdiction for that financial year is reduced accordingly (but not below nil); and

(c)

any amount remaining undeducted is to be carried forward to the financial year following that financial year, and paragraphs (a) and (b) apply with the necessary modifications in relation to that amount.

(5) The Minister may make regulations under section 84 to provide for the recalculation, in a subsequent financial year, of the effective tax rate for the constituent entities (not being special entities) of an MNE group located in a jurisdiction for a financial year in accordance with the GloBE rules.