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Taxes Consolidation Act, 1997 (Number 39 of 1997)

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CHAPTER 5

Calculation of the effective tax rate and the top-up tax

111AC. Determination of effective tax rate

(1) The effective tax rate of an MNE group or large-scale domestic group shall be calculated for—

(a) each fiscal year, and

(b) each jurisdiction,

provided that there is net qualifying income in the jurisdiction, as calculated in accordance with subsection (3).

(2) For the purpose of this Part, the effective tax rate of an MNE group or large-scale domestic group for a jurisdiction for a fiscal year, shall be calculated as follows:

ACJ / NQI

where—

ACJ

is the aggregate adjusted covered taxes of all the constituent entities located in the jurisdiction, and

NQI

is the positive amount, if any, of the net qualifying income of all the constituent entities located in the jurisdiction determined in accordance with subsection (3).

(3) The net qualifying income or loss of the constituent entities located in a jurisdiction for a fiscal year shall be calculated as follows:

AQI-AQL

where—

AQI

is the positive sum, if any, of the qualifying income of all constituent entities located in the jurisdiction for a fiscal year, and

AQL

is the sum of the qualifying losses of all constituent entities located in the jurisdiction for a fiscal year.

(4) For the purposes of subsections (2) and (3), the adjusted covered taxes and net qualifying income or loss of constituent entities, that are investment entities, are excluded from the calculation of the effective tax rate in accordance with subsection (2) and the calculation of the net qualifying income in accordance with subsection (3).

(5) The effective tax rate of each stateless constituent entity shall be calculated, for each fiscal year, separately from the effective tax rate of all other constituent entities.

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Inserted by F(No.2)A23 s94.