Global Minimum Tax Act (S.C. 2024, c. 17, s. 81)

SUBDIVISION DDe Minimis Jurisdiction Exclusion

Marginal note:De minimis jurisdiction exclusion

• 33 (1) Despite sections 30 and 34, the top-up amount for a particular fiscal year of each constituent entity (referred to in this section as an “eligible constituent entity”) of an MNE group that is located in a jurisdiction (other than a stateless constituent entity, investment entity or insurance investment entity) is deemed to be the amount that would be the top-up amount of the eligible constituent entity if the top-up percentage that is relevant in calculating that top-up amount were nil, if

  • (a) the filing constituent entity of the MNE group elects in respect of the jurisdiction for the particular fiscal year;

  • (b) the amount determined by the following formula is less than €10 million:

    (A + B + C) ÷ D

    where

    A

    is the jurisdictional GloBE revenue of the MNE group for the jurisdiction for the particular fiscal year,

    B

    is the jurisdictional GloBE revenue of the MNE group for the jurisdiction for the fiscal year (referred to in this subsection as the “first preceding year”) immediately preceding the particular fiscal year,

    C

    is the jurisdictional GloBE revenue of the MNE group for the jurisdiction for the fiscal year (referred to in this subsection as the “second preceding year”) immediately preceding the first preceding year, and

    D

    is

    • (i) 3, if the jurisdictional GloBE revenue of the MNE group for the jurisdiction is greater than nil — or at least one eligible constituent entity of the MNE group that is located in the jurisdiction has a GloBE loss — for both the first preceding year and the second preceding year,

    • (ii) 2, if the jurisdictional GloBE revenue of the MNE group for the jurisdiction is greater than nil — or at least one eligible constituent entity of the MNE group that is located in the jurisdiction has a GloBE loss — for only one of the first preceding year and the second preceding year, and

    • (iii) 1, in any other case; and

  • (c) the amount determined by the following formula is less than €1 million:

    (E + F + G) ÷ D

    where

    E

    is the jurisdictional GloBE income or loss of the MNE group for the jurisdiction for the particular fiscal year,

    F

    is the jurisdictional GloBE income or loss of the MNE group for the jurisdiction for the first preceding year, and

    G

    is the jurisdictional GloBE income or loss of the MNE group for the jurisdiction for the second preceding year.

• Marginal note:Definition of jurisdictional GloBE revenue

  (2) The jurisdictional GloBE revenue, of an MNE group for a jurisdiction for a fiscal year, means the total of all amounts determined by the formula

  A × B ÷ 365

  where

  A

  is the financial accounting revenue of an eligible constituent entity of the MNE group that is located in the jurisdiction for the fiscal year, subject to any adjustments made in determining the GloBE income or loss of the eligible constituent entity for the fiscal year under Division 2, subsection 25(6) and paragraphs 27(1)(b) and 37(4)(b) and (5)(b), other than any adjustment

  • (a) in respect of expenses, or

  • (b) that is a decrease to the eligible constituent entity’s GloBE income or loss for the fiscal year resulting from the application of an ETR adjustment provision in a subsequent fiscal year; and

  B

  is the number of days in the fiscal year.

• Marginal note:Definition of financial accounting revenue

  (3) The financial accounting revenue, of an eligible constituent entity of an MNE group for a fiscal year, means the revenue amount for the fiscal year determined for the entity in the manner set out, and in accordance with the principles reflected, in the definition financial accounting income in subsection 17(1), with such modifications as the context requires.

• Marginal note:Definition of jurisdictional GloBE income or loss

  (4) The jurisdictional GloBE income or loss, of an MNE group for a jurisdiction for a fiscal year, means the amount that would, in the absence of section 8, be determined by the formula

  A × B ÷ 365

  where

  A

  is the total of all amounts each of which is the GloBE income or loss for the fiscal year of an eligible constituent entity of the MNE group that is located in the jurisdiction determined without taking into account any adjustment that is a decrease to the eligible constituent entity’s GloBE income or loss for the fiscal year resulting from the application of an ETR adjustment provision in a subsequent fiscal year; and

  B

  is the number of days in the fiscal year.

SUBDIVISION ETop-up Amount of a Minority-Owned Constituent Entity

Marginal note:Deeming rule — minority-owned subgroup

• 34 (1) For the purposes of sections 29 to 31 and subsections 32(1), (2), (4), (8) to (10) and (16), each minority-owned constituent entity that would, in the absence of this section, be a constituent entity of an MNE group is deemed not to be a constituent entity of the MNE group.

• Marginal note:Minority-owned constituent entity — top-up amount

  (2) The top-up amount of a minority-owned constituent entity (other than an investment entity or an insurance investment entity) of a minority-owned subgroup that is located in a jurisdiction for a fiscal year is the amount that would be determined under subsection 30(1) if the references in sections 29 to 31 and subsections 32(1) to (4), (8) to (10) and (16) to “MNE group” and “standard constituent entity” were read as references to “minority-owned subgroup” and “minority-owned constituent entity (other than an investment entity or an insurance investment entity)”, respectively.

• Marginal note:Interpretation rule

  (3) For the purposes of determining the top-up amount of a minority-owned constituent entity under subsection (2), subsection 21(3) and sections 37 to 39, 41 and 42 apply with such modifications, if any, as the context requires.

• Marginal note:Allocation of minority-owned constituent entity top-up amount

  (4) For the purposes of Division 1, the GloBE income of a minority-owned constituent entity of a minority-owned subgroup that is located in a jurisdiction for a fiscal year, is

  • (a) if the net GloBE income of the minority-owned subgroup for the jurisdiction for the fiscal year, as computed in determining the top-up amount of the minority-owned constituent entity under subsection (2), is nil, the GloBE income that would be determined under subsection 15(5) if the net GloBE income, and the allocated adjustment top-up amount and excess negative tax expense top-up amount of the minority-owned constituent entity, were the amounts computed in determining the top-up amount of the minority-owned constituent entity under subsection (2); and

  • (b) in any other case, the GloBE income computed in determining the minority-owned constituent entity’s top-up amount under subsection (2).

SUBDIVISION FTop-up Amount of a Joint Venture Entity

Marginal note:Joint venture top-up amount

• 35 (1) The top-up amount of a joint venture entity of a joint venture group, in respect of a particular MNE group, for a fiscal year is the amount that would be determined under subsection 30(1), 34(2) or 36(2), if

  • (a) all references in Divisions 2 and 3, Subdivisions A to E, G and H of this Division, Divisions 5 to 7 and Subdivision B of Division 8 to

    • (i) “MNE group” and “ultimate parent entity” were read as references to “joint venture group” and “joint venture”, respectively, and

    • (ii) “standard constituent entity” and “constituent entity” were read as references to “joint venture entity”;

  • (b) for greater certainty, the GloBE income or loss and adjusted covered taxes, as well as all the amounts that are to be computed under Subdivisions A to E, G and H of this Division and Divisions 5 to 7 in determining the top-up amount of the joint venture entity, were determined

    • (i) applying the rules in paragraph (a), and

    • (ii) based on the assumption that the joint venture group was a separate MNE group of which the joint venture was the ultimate parent entity and the joint venture entities were the only constituent entities;

  • (c) any amount of covered taxes that would be allocated from a constituent entity of the particular MNE group to the joint venture entity under any of subsections 24(4) to (6), if those subsections were applied without regard to paragraphs (a) and (b) of this subsection and the joint venture entity were a constituent entity of the particular MNE group, were allocated to the joint venture entity; and

  • (d) for the purposes of this subsection, any other modifications were made to Part 1 and Divisions 2 and 3, this Division, Divisions 5 to 7, Subdivision B of Division 8 and Subdivision A of Division 9 of this Part as the context requires.

• Marginal note:Allocation of joint venture top-up amount

  (2) For the purposes of Division 1 of this Part and Division 2 of Part 5,

  • (a) any joint venture entity in respect of a qualifying MNE group is deemed to be a constituent entity but not a relevant parent entity of the qualifying MNE group; and

  • (b) the GloBE income of a joint venture entity of a joint venture group that is located in a jurisdiction for a fiscal year, is

    • (i) if the net GloBE income of the joint venture group for the jurisdiction for the fiscal year, as computed in determining the top-up amount of the joint venture entity under subsection (1), is nil, the GloBE income that would be determined under subsection 15(5) if the net GloBE income, and the allocated adjustment top-up amount and excess negative tax expense top-up amount of the joint venture entity, were the amounts computed in determining the top-up amount of the joint venture entity under subsection (1), and

    • (ii) in any other case, the GloBE income computed in determining the joint venture entity’s top-up amount under subsection (1).

• Marginal note:Permanent establishment — deemed joint venture subsidiary

  (3) For the purposes of this section, if the main entity in respect of a permanent establishment is a joint venture, or a joint venture subsidiary of the joint venture, the permanent establishment is deemed to be a joint venture subsidiary of the joint venture separate and distinct from the main entity and any other permanent establishment of the main entity that is also deemed to be a joint venture subsidiary under this subsection.

SUBDIVISION GTop-up Amount of an Investment Entity

Marginal note:Definitions

• 36 (1) The following definitions apply in this section.

  investment entity adjusted covered taxes amount

  investment entity adjusted covered taxes amount means the amount that would, in the absence of section 8, be determined in respect of an investment subgroup entity for a fiscal year by the formula

  A − (B × A)

  where

  A

  is the amount of adjusted covered taxes of the investment subgroup entity for the fiscal year; and

  B

  is the minority investor percentage of the investment subgroup entity for the fiscal year. (montant des impôts concernés ajustés de l’entité d’investissement)

  investment entity GloBE income amount

  investment entity GloBE income amount means the amount that would, in the absence of section 8, be determined in respect of an investment subgroup entity for a fiscal year by the formula

  A − (B × A)

  where

  A

  is the GloBE income or loss of the investment subgroup entity for the fiscal year; and

  B

  is the minority investor percentage of the investment subgroup entity for the fiscal year. (montant du revenu GloBE de l’entité d’investissement)

  investment subgroup

  investment subgroup, in respect of an MNE group, means all investment subgroup entities of the MNE group. (sous-groupe d’investissement)

  investment subgroup entity

  investment subgroup entity, of an MNE group, means a constituent entity of the MNE group that is an investment entity or an insurance investment entity. (entité de sous-groupe d’investissement)

  minority investor percentage

  minority investor percentage, of an investment subgroup entity for a fiscal year, means the percentage of the GloBE income or loss of the investment subgroup entity for the fiscal year that is attributable (based on the relevant assumptions) to any ownership interest in the investment subgroup entity, other than any ownership interest held, directly or indirectly, by the ultimate parent entity of the MNE group of which the investment subgroup entity is a constituent entity. (pourcentage de l’investisseur minoritaire)

  minority-owned investment entity

  minority-owned investment entity, of a minority-owned subgroup of an MNE group, means a constituent entity of the MNE group that is

  • (a) an investment entity or an insurance investment entity; and

  • (b) included in the minority-owned subgroup. (entité d’investissement à détention minoritaire)

  minority-owned investment subgroup

  minority-owned investment subgroup, in respect of a minority-owned subgroup, means all minority-owned investment entities of the minority-owned subgroup. (sous-groupe d’investissement à détention minoritaire)

  relevant assumptions

  relevant assumptions, in respect of an attribution of GloBE income or loss for a fiscal year to an ownership interest in an investment subgroup entity, means the assumptions that

  • (a) the principles of the authorized financial accounting standard applicable in the preparation of the consolidated financial statements for the fiscal year of the ultimate parent entity of the MNE group that includes the investment subgroup entity are used for the purposes of the attribution;

  • (b) the net income of the investment subgroup entity is equal to its GloBE income or loss; and

  • (c) no amount of the GloBE income or loss of the investment subgroup entity is attributable to transactions with other group entities of the MNE group. (hypothèses pertinentes)

• Marginal note:Investment subgroup entity — top-up amount

  (2) Subject to subparagraphs 42(2)(d)(ii) and (e)(ii), the top-up amount of an investment subgroup entity of an investment subgroup in respect of an MNE group for a fiscal year is the amount determined under subsection 30(1) applying the following rules:

  • (a) any references in sections 29 to 32 and 34 to

    • (i) “MNE group”, except the reference to that term in the expression “ultimate parent entity of the MNE group” in subsection 32(15) which is to be read as a reference to “ultimate parent entity of the MNE group in which the investment subgroup is included”, are to be read as references to “investment subgroup”,

    • (ii) “standard constituent entity” or “constituent entity” are to be read as references to “investment subgroup entity”,

    • (iii) “GloBE income or loss”, except the references to that term in subsection 31(1), paragraph 32(3)(e) and subparagraph 32(14)(d)(iii), are to be read as references to “investment entity GloBE income amount”,

    • (iv) “GloBE income”, except the references to that term in paragraph 32(5)(a) and subsection 32(6), are to be read as references to “positive investment entity GloBE income amount”,

    • (v) “GloBE loss” are to be read as references to “negative investment entity GloBE income amount”,

    • (vi) “adjusted covered taxes”, except references to that term in subsection 31(1), are to be read as references to “investment entity adjusted covered taxes amount”,

    • (vii) “minority-owned subgroup” are to be read as references to “minority-owned investment subgroup”, and

    • (viii) “minority-owned constituent entity (other than an investment entity or an insurance investment entity)” are to be read as references to “minority-owned investment entity”;

  • (b) for greater certainty, all other amounts that are to be determined under sections 29 to 32 and 34 in determining the top-up amount of an investment subgroup entity of an investment subgroup are also to be determined applying the rules in paragraph (a);

  • (c) the amounts that would, in the absence of this paragraph, be determined for A and B in the formula in subsection 32(1) in respect of the investment subgroup entity are to be multiplied by the ratio determined by the formula

    A ÷ B

    where

    A

    is the investment entity GloBE income amount of the investment subgroup entity for the fiscal year, and

    B

    is the GloBE income or loss of the investment subgroup entity for the fiscal year;

  • (d) despite paragraph (a), all references to “fiscal year” in sections 29 to 32 and 34 are to the fiscal year of the MNE group; and

  • (e) any other modifications are made to sections 29 to 32 and 34 as the context requires.

• Marginal note:Interpretation rule

  (3) For the purposes of determining the top-up amount of an investment subgroup entity under subsection (2), subsection 21(3) and sections 37 to 39, 41 and 42 apply with such modifications, if any, as the context requires.

• Marginal note:Allocation of investment subgroup entity top-up amount

  (4) For the purposes of Division 1, the GloBE income of an investment subgroup entity of an investment subgroup that is located in a jurisdiction for a fiscal year, is

  • (a) if the net GloBE income of the investment subgroup for the jurisdiction for the fiscal year, as computed in determining the top-up amount of the investment subgroup entity under subsection (2), is nil, the GloBE income that would be determined under subsection 15(5) if the net GloBE income, and the allocated adjustment top-up amount and excess negative tax expense top-up amount of the investment subgroup entity, were the amounts computed in determining the top-up amount of the investment subgroup entity under subsection (2); and

  • (b) in any other case, the GloBE income computed in determining the investment subgroup entity’s top-up amount under subsection (2).