111AG De minimis exclusion

Summary

This section provides a jurisdictional exclusion for low tax constituent entities of an MNE Group when both (i) the aggregated income and (ii) the revenue of those entities do not exceed agreed monetary thresholds.

Details

(1) This subsection provides an exclusion for the constituent entities of an MNE group or large-scale domestic group located in a jurisdiction other than stateless constituent entities or investment entities when both (i) the aggregated income and (ii) the revenue of those entities do not exceed agreed monetary thresholds. An election can be made so that the top-up tax due for a constituent entity in a jurisdiction shall be equal to zero for a fiscal year, if for that fiscal year:

• (1)(a) the average qualifying revenue of all constituent entities of an MNE group or large-scale domestic group located in that jurisdiction is less than €10,000,000, and
• (1)(b) the average qualifying income or loss of all constituent entities of an MNE group or large-scale domestic group in that jurisdiction is a loss or is less than €1,000,000.

(2)(a) For the purpose of subsection (1), the average qualifying revenue, or the average qualifying income or loss, as the case may be, shall be the average of the qualifying revenue, or the qualifying income or loss, of the constituent entities of an MNE group or large-scale domestic group located in the jurisdiction, for the fiscal year and the two preceding fiscal years.

(2)(b) If there are no constituent entities of an MNE group or large-scale domestic group with qualifying revenue, or qualifying income or loss, located in the jurisdiction in the first or second preceding fiscal years, or both, that fiscal year or years shall be excluded from the calculation of the average qualifying revenue, or average qualifying income or loss, as the case may be, of that jurisdiction.

(3) Subject to subsection (5), for the purposes of this section, the qualifying revenue of the constituent entities of an MNE group or large-scale domestic group located in a jurisdiction for a fiscal year shall be the sum of all the revenues of the constituent entities of an MNE group or large-scale domestic group located in that jurisdiction in arriving at the financial accounting net income or loss of the constituent entities for the fiscal year reduced, or increased, by any adjustment carried out pursuant to Chapter 3.

(4) Subject to subsection (5), for the purposes of this section, the qualifying income or loss of the constituent entities of an MNE group or large-scale domestic group located in a jurisdiction for a fiscal year shall be the net qualifying income or loss of that jurisdiction as calculated pursuant to section 111AC(3).

(5) The qualifying revenue and qualifying income or loss of stateless constituent entities or investment entities shall be excluded from the calculations of the average qualifying revenue and average qualifying income or loss of the constituent entities of an MNE group or large-scale domestic group for the purposes of subsection (1).

(6) The election referred to in this section shall be made annually in accordance with section 111AAAD and shall apply to all constituent entities located in the same jurisdiction.

Relevant Date: Finance Act 2024