Treasury Laws Amendment (Multinational - Global and Domestic Minimum Tax) (Consequential) Act 2024 (134 of 2024)

Schedule 1   Amendments

Income Tax Assessment Act 1997

20   At the end of Subdivision 770-C

Add:

770-145 When foreign income tax is considered not paid - foreign DMT tax reduced by amount of benefit

(1) This section applies if:

(a) an entity is:

(i) a *Group Entity of an *Applicable MNE Group; or

(ii) a *GloBE Joint Venture of an Applicable MNE Group; or

(iii) a *GloBE JV Subsidiary of a GloBE Joint Venture of an Applicable MNE Group; and

(b) the entity pays an amount of *foreign income tax imposed by a tax law of a foreign country; and

(c) the foreign income tax is *foreign DMT tax; and

(d) the entity, or another entity of a kind mentioned in subparagraph (a)(i), (ii) or (iii), is entitled to an amount of any of the following benefits in respect of the entity:

(i) a refundable tax credit (whether by way of cash or cash equivalent, or through an offset of unrelated, existing liabilities), to the extent that the tax credit is computed as an excess over the entity's income tax liability;

(ii) consideration received for the transfer of a transferable tax credit to which the entity was entitled in respect of foreign income tax of the foreign country;

(iii) cash or cash equivalent amounts recognised as government grants under *accounting standard AASB 120 (or, if that standard does not apply to the entity, a comparable accounting standard that applies to the entity under a *foreign law);

(iv) if the foreign country is specified in a determination under subsection (3) - a benefit of a kind specified in the determination in respect of the foreign country; and

(e) both of the following are in relation to the same *foreign tax period in relation to the entity:

(i) the foreign income tax;

(ii) the benefits.

(2) Despite anything else in this Division, this Act applies to the entity as if the amount of *foreign DMT tax were reduced by the amount of the benefit (but not below zero).

(3) The Minister may, by legislative instrument, make a determination specifying a benefit in respect of a specified foreign country.

(4) In making the determination, the Minister must have regard to the following:

(a) the extent (if any) to which the benefit has been designed to be available to *Applicable MNE Groups;

(b) the extent (if any) to which the benefit could increase the amount of *foreign DMT tax payable in the foreign country;

(c) the extent (if any) to which the benefit could increase the amount of a *tax offset under this Division;

(d) the nature of any other benefit specified in the determination.

(5) A reference in this section to a *Group Entity does not include a reference to a *GloBE Excluded Entity.

770-150 Meaning of foreign DMT tax

(1) A tax is a foreign DMT tax if it is any of the following:

(a) tax that is payable under a *foreign law and is a *Qualified Domestic Minimum Top-up Tax;

(b) tax that is payable under a foreign law and would be a Qualified Domestic Minimum Top-up Tax if paragraph (c) of the definition of Qualified Domestic Minimum Top-up Tax in the *GloBE Rules were disregarded;

(c) tax that is payable under a foreign law specified by regulations made for the purposes of this paragraph.

(2) If regulations made for the purposes of this subsection specify a provision of this Act and a tax that is payable under a foreign law, for the purposes of that provision, that tax is also a foreign DMT tax .