Tax Neutrality and distribution regimes

<< Go back to overview Next article>> Article 7.6. Taxable Distribution Method Election Article 7.6 provides another alternative to the rule in Article 7.4. This alternative is the Taxable Distribution Method. This method reduces the exposure to Top-up Tax to the extent that the Investment Entity makes distributions of [...]

Article 7.5. Investment Entity Tax Transparency Election 7.5.1. A Filing Constituent Entity may elect to treat a Constituent Entity that is an Investment Entity or an Insurance Investment Entity as a Tax Transparent Entity if the Constituent Entity-owner is subject to tax in its location under a mark-to-market or similar regime based on [...]

Article 7.4. Effective Tax Rate Computation for Investment Entities Investment Entities that are the UPE are excluded from the operation of the GloBE Rules because they are not Constituent Entities of any MNE Group. See Article 1.5.1(e). However, the income of a controlled Investment Entity is consolidated with the MNE Group and brought [...]

<< Go back to overview Next article>> Article 7.3. Eligible Distribution Tax Systems Article 7.3 allows certain distribution tax regimes to be accommodated within the structure of the GloBE Rules, subject to certain safeguards and recapture rules. A distribution tax regime is a tax system that generally imposes income [...]

<< Go back to overview Next article>> Article 7.2. Ultimate Parent Entity subject to Deductible Dividend Regime Article 7.2 contains a set of rules for UPEs that are subject to a Deductible Dividend Regime. These rules allow a deduction in the computation of the GloBE Income or Loss for [...]

<< Go back to overview Next article>> Article 7.1. Ultimate Parent Entity that is a Flow-through Entity A jurisdiction’s tax system may contain rules designed to achieve a single level of taxation on business income. While some jurisdictions may achieve this by adjusting the treatment of income in the [...]