111N. Calculation and allocation of UTPR top-up tax amount

(1) (a) The UTPR top-up tax amount arising pursuant to section 111L(1), 111M(1) or 111AZ(1), as the case may be, of an MNE group allocated to a constituent entity for a fiscal year shall be calculated as follows:

A × B

where—

A is the UTPR top-up tax amount of an MNE group allocated to the State for a fiscal year as determined in accordance with subsection (2), and

B is the UTPR percentage in respect of the constituent entity for a fiscal year as determined in accordance with paragraph (b).

(b) The UTPR percentage in respect of a constituent entity for a fiscal year shall be calculated as follows:

((A/ B) × 50 per cent) + ((C / D) × 50 per cent)

where—

A is the total number of employees of the constituent entity,

B is the total number of employees of all the constituent entities of the MNE group located in the State,

C is the sum of the net book values of tangible assets of the constituent entity, and

D is the sum of the net book values of tangible assets of all constituent entities of the MNE group located in the State.

(2) The UTPR top-up tax amount of an MNE group allocated to the State for a fiscal year shall be calculated as follows:

A × B

where—

A is the total UTPR top-up tax of the MNE group for a fiscal year as determined in accordance with subsection (3), and

B is the UTPR percentage in respect of the MNE group located in the State for a fiscal year as determined in accordance with subsection (6).

(3) The total UTPR top-up tax of an MNE group for a fiscal year shall be equal to the sum of the top-up tax calculated for each low-taxed constituent entity of the MNE group for that fiscal year, in accordance with section 111AD, as adjusted by subsections (4) and (5).

(4) UTPR top-up tax of a low-taxed constituent entity for a fiscal year shall be equal to zero for the purposes of subsection (3) where all of the ultimate parent entity’s ownership interests in such low-taxed constituent entity are held directly or indirectly by one or more parent entities which are required to apply a qualified IIR in respect of that low-taxed constituent entity for that fiscal year.

(5) Where subsection (4) does not apply, UTPR top-up tax of a low-taxed constituent entity for a fiscal year shall be reduced, for the purposes of subsection (3), by a parent entity’s allocable share of the top-up tax of that low-taxed constituent entity that is brought into charge under a qualified IIR.

(6) Subject to subsection (8), the UTPR percentage in respect of an MNE group located in the State for a fiscal year shall be calculated as follows:

((A/ B) × 50 per cent) + ((C / D) × 50 per cent)

where—

A is the total number of employees of all the constituent entities of the MNE group located in the State,

B is the total number of employees of all constituent entities of the MNE group located in jurisdictions that have a qualified UTPR in force for the fiscal year,

C is the sum of the net book value of tangible assets of all constituent entities of the MNE group located in the State, and

D is the sum of the net book value of tangible assets of all constituent entities of the MNE group located in jurisdictions that have a qualified UTPR in force for the fiscal year.

(7) The following shall apply for the purposes of subsections (1)(b) and (6):

(a) the number of employees of a constituent entity in a jurisdiction shall be the number of employees employed on a full-time equivalent basis located in that jurisdiction, including independent contractors provided that they participate in the ordinary operating activities of the constituent entity;

(b) the tangible assets of a constituent entity in a jurisdiction shall include the tangible assets of that constituent entity located in that jurisdiction but shall not include—

(i) cash or cash equivalent,

(ii) intangible assets, or

(iii) financial assets;

(c) a constituent entity that is a permanent establishment shall be allocated the employees whose payroll costs are included in the separate financial accounts of that permanent establishment as determined by subsection (1) of section 111R adjusted in accordance with subsection (2) of that section;

(d) a constituent entity that is a permanent establishment shall be allocated the tangible assets included in the separate financial accounts of the permanent establishment as determined by subsection (1) of section 111R adjusted in accordance with subsection (2) of that section;

(e) the number of employees and the tangible assets allocated to the jurisdiction of a permanent establishment shall not be taken into account for the number of employees and the tangible assets, as the case may be, of the jurisdiction of the main entity;

(f) the number of employees and the net book value of tangible assets held by an investment entity shall be excluded from the calculations in accordance with subsections (1)(b) and (6) of the UTPR percentage in respect of a constituent entity and an MNE group, as the case may be, located in the State;

(g) the number of employees and the net book value of tangible assets of a flow-through entity shall be excluded from the calculation in accordance with subsections (1)(b) and (6) of the UTPR percentage in respect of a constituent entity and an MNE group, as the case may be, located in the State, unless they are allocated to a permanent establishment, or, in the absence of a permanent establishment, to a constituent entity that is located in the jurisdiction where the flow-through entity was created.

(8) Where an amount of tax allocated to a jurisdiction under a qualified UTPR in a prior fiscal year has not resulted in the constituent entities of an MNE group located in that jurisdiction having an additional cash tax expense equal, in total, to that amount of tax for that prior fiscal year allocated to that jurisdiction, then—

(a) the UTPR percentage for that MNE group in respect of that jurisdiction shall be deemed to be zero for the fiscal year, and

(b) the number of employees and the net book value of tangible assets of the constituent entities of that MNE group which are located in that jurisdiction shall be excluded from the calculation in accordance with subsection (6) of the UTPR percentage in respect of an MNE group located in the State.

(9) Subsection (8) shall not apply for a fiscal year if all jurisdictions with a qualified UTPR in force for the fiscal year have a UTPR percentage of zero for the MNE group for that fiscal year.