Part 3Multinational top-up tax

Chapter 4Calculation of adjusted profits of members of a multinational group

Dealing with transparency and entities subject to qualifying dividend regime

167Underlying profits of hybrids

1

This section applies where a member of a multinational group (“M”)—

a

is not regarded as tax transparent in the territory in which it is located, and

b

is regarded as tax transparent in a territory in which a member of the group with an ownership interest in it (“G”) is located.

2

Where—

a

the adjusted profits of G reflect profits of M, and

b

the basis for the profits of M being so reflected is that M (along with any other entities through which G holds that interest) is regarded as tax transparent in the territory in which G is located,

such profits as are reflected on that basis are to be allocated to M (and included in the adjusted profits of M to the extent not already included) and excluded from the adjusted profits of G.