111AP. Multi-parented MNE and large-scale domestic groups

(1) In this section—

“consolidated financial statements of the multi-parented MNE group or multi-parented large-scale domestic group” means the combined consolidated financial statements referred to in the definition in this subsection of a ‘stapled structure’ or a ‘dual-listed arrangement’, prepared under an acceptable financial accounting standard, which is deemed to be the accounting standard of the ultimate parent entity;

“dual-listed arrangement” means an arrangement entered into by 2 or more ultimate parent entities of separate groups under which—

(a) the ultimate parent entities agree to combine their business by contract alone,

(b) pursuant to contractual arrangements the ultimate parent entities will make distributions, with respect to dividends and in liquidation, to their shareholders based on a fixed ratio,

(c) the ultimate parent entities’ activities are managed as a single economic unit under contractual arrangements while retaining their separate legal identities,

(d) the ownership interests of the ultimate parent entities that comprise the agreement are quoted, traded or transferred independently in different capital markets, and

(e) the ultimate parent entities prepare consolidated financial statements—

(i) in which the assets, liabilities, income, expenses and cash flows of entities in all of the groups are presented together as those of a single economic unit, and

(ii) that are required by a regulatory regime to be audited by an external independent auditor;

“multi-parented large-scale domestic group” means 2 or more groups where the ultimate parent entities enter into an arrangement that is a stapled structure or a dual-listed arrangement that does not include an entity or permanent establishment of either group subject to the arrangement which is located in a different jurisdiction with respect to the location of the other entities of the 2 groups;

“multi-parented MNE group” means 2 or more groups where the ultimate parent entities enter into an arrangement that is a stapled structure or a dual-listed arrangement that includes at least one entity or permanent establishment of either group subject to the arrangement which is located in a different jurisdiction with respect to the location of the other entities of the 2 groups;

“stapled structure” means an arrangement entered into by 2 or more ultimate parent entities of separate groups under which—

(a) 50 per cent or more of the ownership interests in the ultimate parent entities of separate groups are—

(i) if they are listed, quoted at a single price, and

(ii) by reason of form of ownership, restrictions on transfer, or other terms or conditions, combined with each other, and cannot be transferred or traded independently,

and

(b) one of the ultimate parent entities prepares consolidated financial statements—

(i) in which the assets, liabilities, income, expenses and cash flows of all the entities of the groups concerned are presented together as those of a single economic unit, and

(ii) that are required by a regulatory regime to be audited by an external independent auditor.

(2) Where entities and constituent entities of 2 or more groups form part of a multi-parented MNE group or multi-parented large-scale domestic group, the entities and constituent entities of each group shall be treated as members of one multi-parented MNE group or multi-parented large-scale domestic group, as the case may be.

(3) For the purposes of subsection (2) an entity, other than an excluded entity, shall be treated as a constituent entity if it is consolidated on a line-by-line basis in the consolidated financial statements of the multi-parented MNE group or multi-parented large-scale domestic group, or if its controlling interests are held by entities in the multi-parented MNE group or multi-parented large-scale domestic group, as the case may be.

(4) The ultimate parent entities of the separate groups that compose the multi-parented MNE group or multi-parented large-scale domestic group, as the case may be, shall be the ultimate parent entities of the multi-parented MNE group or multi-parented large-scale domestic group and in the application of this Part in respect of a multi-parented MNE group or multi-parented large-scale domestic group any references to an ultimate parent entity shall apply, as required, as if they are references to multiple ultimate parent entities.

(5) Sections 111E to 111J shall apply to the parent entities and ultimate parent entities of the multi-parented MNE group or multi-parented large-scale domestic group, as the case may be, with respect to their allocable share of the top-up tax of the low-taxed constituent entities.

(6) Sections 111L to 111N and section 111AZ shall apply to constituent entities of a multi-parented MNE group or multi-parented large-scale domestic group, as the case may be, taking into account the top-up tax of each low-taxed constituent entity that is a member of the multi-parented MNE group or multi-parented large-scale domestic group.

(7) The ultimate parent entities of the multi-parented MNE group or multi-parented large-scale domestic group shall be required to file the top-up tax information return in respect of the information concerning each of the groups that compose the multi-parented MNE group or multi-parented large-scale domestic group in accordance with section 111AAI, unless they appoint a designated filing entity.