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Amendment of Part 4A of Principal Act (Implementation of Council Directive (EU) 2022/2523 of 15 December 2022 on ensuring a global minimum level of taxation for multinational enterprise groups and large-scale domestic groups in the Union)
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115. (1) Part 4A of the Principal Act is amended—
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(a) in section 111A—
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(i) in subsection (1)—
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(I) by the substitution of the following definition for the definition of “hybrid entity”:
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“ ‘hybrid entity’ means—
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(a) an entity not treated as fiscally transparent in the jurisdiction where it is located but as fiscally transparent in the jurisdiction in which its owner is located, or
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(b) an entity which is located in a jurisdiction that does not have a corporate income tax and the entity—
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(i) is treated as fiscally transparent in the jurisdiction where its owner is located, and
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(ii) is not treated as a flow-through entity and a tax transparent entity under subsection (5)(c);”,
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and
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(II) by the insertion of the following definitions:
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“ ‘securitisation arrangement’ means an arrangement that—
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(a) is implemented for the purpose of pooling and repackaging a portfolio of assets, or exposures to assets, for investors that are not constituent entities of the MNE group which is undertaking the arrangement, in a manner that legally segregates one or more than one identified pool of assets, and
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(b) seeks through contractual agreements to limit the exposure of the investors referred to in paragraph (a) to the risk of insolvency of an entity holding the legally segregated assets by controlling the ability of identified creditors of that entity, or of another entity in the arrangement, to make claims against it through legally binding documentation entered into by those creditors;
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‘securitisation entity’ shall be construed in accordance with subsection (8);”,
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(ii) by the insertion of the following subsection after subsection (5):
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“(5A) For the purposes of applying subsection (5)(a) to a flow-through entity, a reference in that subsection to ‘owner’ means the constituent entity owner that is closest in the ownership chain to the flow-through entity that is either—
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(a) not a flow-through entity, or
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(b) where there is no such constituent entity-owner, a flow-through entity that is the ultimate parent entity of the MNE group or large-scale domestic group.”,
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and
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(iii) by the insertion of the following subsection after subsection (7):
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“(8) (a) Subject to paragraph (b), in this Part, ‘securitisation entity’ means an entity which is a participant in a securitisation arrangement, that—
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(i) solely carries out activities that facilitate one or more than one securitisation arrangement,
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(ii) grants security over its assets in favour of its creditors, or the creditors of another securitisation entity, and
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(iii) pays out all cash received from its assets to its creditors, or the creditors of another securitisation entity, on an annual or more frequent basis, other than—
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(I) cash retained to meet an amount of profit required by the documentation of the securitisation arrangement for eventual distribution to equity holders or their equivalent, where the entity is not a company, or
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(II) cash reasonably required under the terms of the securitisation arrangement to—
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(A) make provision for future payments which are required, or will likely be required, to be made by the entity under the terms of the securitisation arrangement, or
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(B) maintain or enhance the creditworthiness of the entity.
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(b) An entity shall not be a securitisation entity unless any profit referred to in clause (I) of paragraph (a)(iii) for a given fiscal year is negligible relative to the revenues of that entity.”,
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(b) in section 111B(1), in the definition of “OECD Pillar Two guidance”, by the substitution of the following paragraph for paragraph (b):
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“(b) the document entitled OECD (2024), Tax Challenges Arising from the Digitalisation of the Economy – Global Anti-Base Erosion Model Rules (Pillar Two) Examples, OECD, Paris, published by the OECD on 25 April 2024,”,
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(c) in section 111C(1), by the substitution of “Subject to subsection (2) and sections 111AL, 111AAA and 111AAD” for “Subject to subsection (2) and section 111AL”,
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(d) in section 111S(1), by the substitution of “the MNE group or large-scale domestic group” for “an MNE group or large-scale domestic group”,
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(e) in section 111V(3)(a)(ii), by the insertion of “for a price equal to, or exceeding, the marketable price floor” after “origination year”,
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(f) in section 111X—
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(i) in subsection (1), by the insertion of the following definitions:
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“ ‘aggregate deferred tax liability category’ means a category of deferred tax liabilities determined in relation to two or more general ledger accounts, consistent with the chart of accounts used for the purposes of determining the financial accounting net income or loss of an entity, that fall under the same balance sheet account or sub-balance sheet account;
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‘FIFO methodology’ means the methodology set out in paragraphs 90.22 and 90.23 of section 1.3, paragraph 59 of the June 2024 Guidance;
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‘June 2024 Guidance’ means the document entitled OECD (2024), Tax Challenges Arising from the Digitalisation of the Economy – Administrative Guidance on the Global Anti-Base Erosion Model Rules (Pillar Two), June 2024, OECD/G20 Inclusive Framework on BEPS, OECD, Paris, published by the OECD on 17 June 2024;
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‘LIFO methodology’ means the methodology set out in paragraphs 90.22 and 90.24 of section 1.3, paragraph 59 of the June 2024 Guidance;
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‘swinging account’ means a general ledger account for which variances in accounting and tax rules result in a net deferred tax asset or a net deferred tax liability at different points over the life of the assets or liabilities encompassed within the general ledger account;”,
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(ii) by the substitution of the following subsection for subsection (8):
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“(8) (a) Where a deferred tax asset which is attributable to a qualifying loss of a constituent entity has been recorded for a fiscal year at a rate lower than the minimum tax rate, provided that the constituent entity can demonstrate that the deferred tax asset is attributable to a qualifying loss, it may be recalculated at the minimum tax rate in the same fiscal year and the total deferred tax adjustment amount shall be reduced accordingly.
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(b) For the purposes of determining the total deferred tax adjustment amount for a fiscal year, the reversal of a loss deferred tax asset shall first be attributable to a loss deferred tax asset which arose in the most recent fiscal year until the balance of the loss deferred tax asset is exhausted by such amounts, and then, if necessary, to a loss deferred tax asset which arose in the next most recent fiscal year until the balance of the loss deferred tax asset is exhausted by such amounts, and so on for preceding fiscal years.”,
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(iii) by the substitution of the following subsection for subsection (10):
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“(10) (a) Subject to paragraph (b), where a deferred tax liability is a recapture exception accrual, it shall not be recaptured in accordance with subsection (9).
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(b) Where a constituent entity has a general ledger account or aggregate deferred tax liability category, as the case may be, that includes one or more deferred tax liabilities that are not a recapture exception accrual, paragraph (a) shall not apply to the general ledger account or the entire aggregate deferred tax liability category, as the case may be.”,
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and
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(iv) by the insertion of the following subsections after subsection (10):
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“(11) For the purposes of subsection (9), subject to subsections (12) and (13), categories of deferred tax liability for an entity shall be determined—
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(a) on an item-by-item basis, where deferred tax liabilities related to each single asset or liability are tracked individually,
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(b) on a general ledger account basis, where deferred tax liabilities related to all the assets or liabilities encompassed in a general ledger account are grouped and tracked as a single deferred tax liability category, or
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(c) on an aggregate deferred tax liability category basis.
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(12) For the purposes of subsections (9) and (11), where categories of deferred tax liability are determined on an aggregate deferred tax liabilities category basis as referred to in subsection (11)(c), deferred tax liabilities related to—
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(a) non-amortisable intangible assets, including goodwill,
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(b) amortisable intangible assets with an accounting life of more than 5 years, or
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(c) receivables from, and payables to, a connected person,
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as the case may be, shall only be aggregated up to the general ledger account and cannot be aggregated with other general ledger accounts.
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(13) For the purposes of subsections (9) and (11), an aggregate deferred tax liability category shall not include—
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(a) any general ledger account that on a standalone basis would always generate only deferred tax assets, or
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(b) deferred tax liabilities relating to swinging accounts.
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(14) (a) For the purposes of subsection (9), a constituent entity may use the FIFO methodology to determine whether a deferred tax liability has reversed where—
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(i) the deferred tax liability is determined in relation to a single general ledger account,
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(ii) the deferred tax liability is determined in relation to an aggregate deferred tax liability category that consists solely of deferred tax liabilities determined in relation to general ledger accounts with a similar reversal trend, or
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(iii) the deferred tax liability and other deferred tax liabilities are aggregated within an aggregate deferred tax liability category without a similar reversal trend but the constituent entity can demonstrate that the FIFO methodology nevertheless results in appropriate recapture of deferred tax liabilities to the extent their reversal trend extends beyond 5 years.
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(b) For the purposes of paragraph (a), deferred tax liabilities related to an aggregate deferred tax liability category are considered to have a similar reversal trend if such deferred tax liabilities fully reverse within a two-year period of each other.
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(15) For the purposes of subsection (9), for any aggregate deferred tax liability category for which a constituent entity chooses not to use, or for which it cannot use, the FIFO methodology, the LIFO methodology shall be used to determine whether a deferred tax liability has reversed.
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(16) Unless otherwise expressly provided for under this Part, where under this Part the qualifying income or loss of a constituent entity related to an asset or a liability, as the case may be, is calculated based on a value of the asset or the liability (in this subsection referred to as the ‘GloBE carrying value’) which differs from the value of the asset or liability as recorded in the financial statements used to determine the qualifying income or loss of the constituent entity, the constituent entity shall, for the purposes of this section, determine—
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(a) the deferred tax assets and liabilities relating to the asset or liability by reference to the GloBE carrying value, and
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(b) the total deferred tax adjustment amount using a deferred tax expense determined—
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(i) by reference to the deferred tax assets and liabilities calculated in accordance with paragraph (a), and
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(ii) in accordance with the accounting standard used to calculate the deferred tax expense recorded in the financial statements used to determine the qualifying income or loss of the constituent entity.”,
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(g) in section 111Z—
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(i) by the substitution of the following subsection for subsection (5):
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“(5) Subject to subsection (7), a constituent entity that is a hybrid entity or a reverse hybrid entity shall be allocated the amount of any covered taxes included in the financial accounts of its constituent entity-owner which relates to qualifying income of the constituent entity.”,
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and
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(ii) by the insertion of the following subsection after subsection (8):
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“(9) (a) On the making of an election by a filing constituent entity in respect of a jurisdiction, the deferred tax expenses which otherwise would be allocated from a constituent entity located in the jurisdiction to another constituent entity under subsections (2), (4), (5) and (6), shall be excluded from the adjusted covered taxes of all constituent entities.
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(b) Where the election referred to in paragraph (a) is made, the deferred tax expense with respect to passive income which would have been allocated to another entity under subsection (4) or (5) if subsection (7) were not applied is also excluded from the adjusted covered taxes of all constituent entities.
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(c) The election referred to in paragraph (a) shall be made in accordance with section 111AAAD.”,
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(h) in section 111AA(1), in the definition of “jurisdictional ETR”, by the insertion of “entities located in” after “the effective tax rate for”,
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(i) in section 111AI—
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(i) by the substitution of the following subsection for subsection (2):
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“(2) Notwithstanding section 111AD(3), and subject to subsections (3) to (6), on the making of an election by a filing constituent entity in respect of a QDTT subgroup for a fiscal year, jurisdictional top-up tax in respect of the QDTT subgroup for the fiscal year concerned, other than such portion of the jurisdictional top-up tax as comprises additional top-up tax determined in accordance with section 111AF(1)(b), shall be deemed to be zero (in this section, referred to as the ‘QDTT Safe Harbour’) where the qualified domestic top-up tax implemented under the tax law of that jurisdiction is determined to have met the QDTT Safe Harbour standards under an OECD peer review process in respect of that fiscal year.”,
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(ii) in subsection (4)—
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(I) in paragraph (b), by the substitution of “under the laws of that jurisdiction on that flow-through entity,” for “under the laws of that jurisdiction on that flow-through entity, or”,
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(II) in paragraph (c), by the substitution of “in respect of the constituent entities located in that jurisdiction, or” for “in respect of the constituent entities located in that jurisdiction.”, and
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(III) by the insertion of the following paragraph after paragraph (c):
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“(d) the members of the MNE group include a securitisation entity located in the jurisdiction and qualified domestic top-up tax is not charged under the laws of that jurisdiction on the securitisation entity, except where the jurisdiction applies the qualified domestic top-up tax to a securitisation entity but includes provisions to impose any qualified domestic top-up tax liability in respect of the income of a securitisation entity on another constituent entity of the MNE group that is not a securitisation entity, or on the securitisation entity itself if the domestic top-up tax liability cannot be otherwise collected.”,
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(j) in section 111AJ—
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(i) in subsection (1)—
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(I) by the substitution of the following definition for the definition of “qualified CbC report”:
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“ ‘qualified CbC report’ means, in respect of a jurisdiction, a CbC report prepared and provided using qualified financial statements for the jurisdiction;”,
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and
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(II) by the insertion of the following definitions:
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“ ‘additional tier one capital’ means an instrument issued by a constituent entity pursuant to prudential regulatory requirements;
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‘deduction without inclusion arrangement’, ‘duplicate loss arrangement’ and ‘duplicate tax recognition arrangement’ have the meaning assigned to them, respectively, in subsection (17);
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‘hybrid arbitrage arrangement’ means a deduction without inclusion arrangement, a duplicate loss arrangement or a duplicate tax recognition arrangement;
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‘OECD Report of 2015’ has the same meaning as in section 891H;
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‘OECD CBCR Guidance’ means the document entitled OECD (2024), Guidance on the Implementation of Country-by-Country Reporting: BEPS Action 13, OECD, Paris, published by the OECD in May 2024;”,
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(ii) in subsection (2), by the substitution of “subject to subsections (4), (7) to (11), (14) and (18)” for “subject to subsections (4), (7) to (11) and (14)”, and
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(iii) by the insertion of the following subsections after subsection (14):
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“(15) Where purchase price accounting adjustments have been included in the financial accounts of a constituent entity that are used in the preparation of the consolidated financial statements of the ultimate parent entity before any consolidation adjustments eliminating intra group transactions, or the separate financial statements of the constituent entity, those financial accounts or separate financial statements shall not be considered qualified financial statements unless—
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(a) the MNE group of which the constituent entity is a member has not filed a CbC report for a fiscal year beginning after 31 December 2022 that was based on financial information that excluded the purchase price accounting adjustments, except where the constituent entity was required by law or regulation to change its financial information to include purchase price accounting adjustments, and
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(b) any reduction to the constituent entity’s income attributable to an impairment of goodwill related to transactions entered into after 30 November 2021 has been added back to the profit or loss before income tax—
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(i) for the purposes of applying the routine profits test, and
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(ii) for the purposes of calculating the simplified ETR in accordance with subsection (3), but only if the financial accounts do not also have a reversal of deferred tax liability, or recognition or increase of a deferred tax asset, in respect of the impairment of goodwill.
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(16) For the purpose of subsection (3)—
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(a) the income tax expense in respect of a permanent establishment’s income in the jurisdiction in which the permanent establishment is located must be allocated solely to that jurisdiction and shall not be included in the calculation of the simplified ETR for the main entity’s jurisdiction, and
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(b) taxes paid under a controlled foreign company tax regime or paid by a main entity in relation to the qualifying income or loss of a permanent establishment and that are included in qualified financial statements of the constituent entity-owner or main entity, as the case may be, shall not be allocated for the purposes of determining the simplified ETR for the jurisdiction of the constituent entity-owner or main entity.
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(17) (a) A deduction without inclusion arrangement is an arrangement under which one constituent entity (in this paragraph referred to as the ‘first-mentioned constituent entity’) directly or indirectly provides credit or otherwise makes an investment in another constituent entity that results in an expense or loss in the financial statements of a constituent entity to the extent that—
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(i) there is no commensurate increase in the revenue or gain in the financial statements of the first-mentioned constituent entity, or
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(ii) the first-mentioned constituent entity is not reasonably expected over the life of the arrangement to have a commensurate increase in its taxable income,
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but an arrangement will not be a deduction without inclusion arrangement to the extent that the expense or loss is solely with respect to additional tier one capital.
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(b) (i) A duplicate loss arrangement is an arrangement that results in an expense or loss being included in the financial statements of a constituent entity to the extent that—
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(I) the expense or loss is also being included as an expense or loss in the financial statements of another constituent entity, or
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(II) the arrangement gives rise to an amount that is deductible for the purposes of determining the taxable income of another constituent entity in another jurisdiction.
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(ii) An arrangement shall not be a duplicate loss arrangement under subparagraph (i)(I) to the extent that the amount of the expense or loss is offset against revenue or income which is included in the financial statements of both constituent entities.
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(iii) An arrangement shall not be a duplicate loss arrangement under subparagraph (i)(II) to the extent that the amount of the expense or loss is offset against revenue or income which is included in both—
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(I) the financial statements of the constituent entity that is including the expense or loss in its financial statements, and
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(II) the taxable income of the constituent entity availing of the deduction against taxable income for the expense or loss.
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(c) (i) A duplicate tax recognition arrangement is an arrangement that results in more than one constituent entity including part or all of the same income tax expense in its—
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(I) adjusted covered taxes, or
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(II) simplified ETR for the purposes of applying the transitional CbCR safe harbour,
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unless such arrangement also results in the income subject to the tax being included in the financial statements of each such constituent entity.
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(ii) An arrangement shall not be a duplicate tax recognition arrangement if it arises solely because the simplified ETR of a constituent entity (in this subparagraph referred to as ‘the first mentioned constituent entity’) does not require adjustments for income tax expenses which would be allocated to another constituent entity in determining the first-mentioned constituent entity’s adjusted covered taxes.
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(d) Notwithstanding section 111A, a reference to constituent entity in this subsection and subsection (18) shall include—
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(i) a reference to any entity treated as a constituent entity for the purposes of this Part,
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(ii) a joint venture or joint venture affiliate, and
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(iii) any entity with qualified financial statements that has been taken into account for the purposes of the transitional CbCR safe harbour,
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regardless of whether such entities are located in the same jurisdiction.
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(e) In this subsection, ‘financial statements of a constituent entity’ means the financial statements used to calculate that constituent entity’s qualifying income or loss or the qualifying financial statements where that constituent entity is subject to the transitional CbCR safe harbour.
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(f) For the purposes of this subsection, a constituent entity (in this paragraph referred to as ‘the first-mentioned constituent entity’) shall not be considered to have a commensurate increase in its taxable income to the extent that—
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(i) the amount included in taxable income of the first-mentioned constituent entity is offset by a tax attribute with respect to which a valuation adjustment or accounting recognition adjustment has been made or would have been made if the determination whether to make such a valuation adjustment or accounting recognition adjustment were made without regard to the ability of the first-mentioned constituent entity to use the tax attribute with respect to any hybrid arbitrage arrangement entered into after 15 December 2022, or
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(ii) the payment that gives rise to the expense or loss also gives rise to a taxable deduction or loss of a constituent entity that is located in the same jurisdiction as the first-mentioned constituent entity without being included as an expense or loss in determining the profit or loss before income tax for that jurisdiction, including as a result of being an expense or loss in the financial statements of a flow-through entity which is owned by a constituent entity located in the jurisdiction of the first mentioned constituent entity.
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(g) For the purposes of this subsection, an expense or loss shall not be considered to be included in the financial statements of a tax transparent entity to the extent that the expense or loss is included in the financial statements of its constituent-entity owners.
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(18) (a) For the purposes of determining whether the transitional CbCR safe harbour applies to an MNE group in respect of a jurisdiction for a fiscal year, in respect of any hybrid arbitrage arrangement entered into after 15 December 2022—
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(i) any expense or loss arising as a result of a deduction without inclusion arrangement or duplicate loss arrangement shall be excluded from the MNE group’s profit or loss before income tax in respect of the jurisdiction, and
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(ii) any income tax expense arising as a result of a duplicate tax recognition arrangement shall be excluded from the MNE group’s income tax expense in respect of the jurisdiction.
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(b) For the purposes of this subsection, a constituent entity shall be considered to have entered into a hybrid arbitrage arrangement after 15 December 2022 if after that date—
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(i) the arrangement is amended or transferred,
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(ii) the performance of any rights or obligations under the arrangement differs from the performance prior to 15 December 2022 including where payments are reduced or ceased with the effect of increasing the balance of a liability, or
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(iii) there is a change in the accounting treatment with respect to the arrangement.
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(c) Where a duplicate loss arrangement arises under paragraph (b)(i)(I) of subsection (17), and all constituent entities that include the relevant expense or loss in their financial statements are located in the same jurisdiction, then an adjustment shall not be made under subparagraph (a)(i) with respect to the expense or loss in the financial statements of one of the constituent entities.
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(19) An MNE group or large-scale domestic group that is not required to file a CbC report may apply the provisions of this section for a fiscal year where the top-up tax information return that is filed by the group for that fiscal year is completed using the data from qualified financial statements that would have been reported as total revenue and profit or loss before income tax in a qualified CbC report if the MNE group or large-scale domestic group were required to file a CbC report in accordance with the country-by-country reporting requirements in the jurisdiction where the ultimate parent entity is located, or if that jurisdiction does not have such requirements, the amounts that would have been reported in accordance with the OECD Report of 2015 and the OECD CBCR Guidance.”,
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(k) in Chapter 5, by the insertion of the following section after section 111AK:
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“Simplified calculations safe harbour
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111AKA. (1) In this section—
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‘CbC report’ has the same meaning as in section 111AJ(1);
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‘non-material constituent entity’ means a constituent entity, including its permanent establishments, that is a member of an MNE group or large-scale domestic group, as the case may be, and that is not consolidated on a line-by-line basis in the ultimate parent entity’s consolidated financial statements solely on size or materiality grounds, provided that—
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(a) the consolidated financial statements are consolidated financial statements to which paragraph (a) or (c), as the case may be, of the definition of that term in section 111A(1) applies,
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(b) the consolidated financial statements are audited by an external independent auditor and that auditor’s opinion on the consolidated financial statements does not contain any objections or qualifications in relation to the entity not being consolidated on a line-by-line basis, and
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(c) in the case of an entity with a total revenue, as determined in accordance with the relevant CbC regulations in respect of the fiscal year, that exceeds €50,000,000, its financial accounts, that are used to complete the CbC report for the group of which the entity is a member, are prepared in accordance with an acceptable financial accounting standard or an authorised financial accounting standard;
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‘NMCE’ means non-material constituent entity;
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‘NMCE simplified calculations’ means the simplified income calculation, the simplified revenue calculation and the simplified tax calculation;
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‘OECD Report of 2015’ and ‘OECD CBCR Guidance’ have the meaning assigned to them, respectively, in section 111AJ(1);
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‘relevant CbC regulations’ means the Country-by-Country Reporting regulations of the jurisdiction in which the ultimate parent entity of an MNE group is located, or where the surrogate parent entity is located if a CbC report is not filed by the MNE group in the jurisdiction of the ultimate parent entity, but where an MNE group is not required to file a CbC report in any jurisdiction, it shall mean the OECD Report of 2015 and the OECD CBCR Guidance;
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‘simplified income calculation’ means the qualifying income or loss of an NMCE is equal to the total revenue as determined in accordance with the relevant CbC regulations in respect of the fiscal year;
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‘simplified revenue calculation’ means the qualifying revenue of an NMCE is equal to the total revenue as determined in accordance with the relevant CbC regulations in respect of the fiscal year;
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‘simplified tax calculation’ means the adjusted covered taxes of an NMCE is equal to its current year income tax accrued as determined in accordance with the relevant CbC regulations in respect of the fiscal year;
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‘surrogate parent entity’ means a constituent entity appointed by an MNE group as a sole substitute for the ultimate parent entity, to file a CbC report on behalf of the MNE group.
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(2) Subject to subsection (3), notwithstanding section 111AD(3), at the election of the filing constituent entity, the jurisdictional top-up tax for a jurisdiction for a fiscal year, other than additional top-up tax for a jurisdiction for a fiscal year determined in accordance with section 111AF, shall be deemed to be zero where the MNE group or large scale domestic group, as the case may be, meet the requirements set out in subsection (4), (5) or (6).
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(3) An election shall not be made in respect of a jurisdiction under subsection (2) where there is no NMCE of the MNE group or large-scale domestic group, as the case may be, located in the jurisdiction for the fiscal year.
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(4) The requirements of this subsection shall be met where there is no excess profit determined for a jurisdiction for a fiscal year in accordance with section 111AD(4).
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(5) The requirements of this subsection shall be met where—
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(a) the average qualifying revenue of all constituent entities of an MNE group or large-scale domestic group, as the case may be, located in a jurisdiction is less than €10,000,000, and
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(b) the average qualifying income or loss of all constituent entities of an MNE group or large-scale domestic group, as the case may be, in that jurisdiction is a loss or is less than €1,000,000,
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where the average qualifying revenue and average qualifying income or loss of all constituent entities of an MNE group or large-scale domestic group are determined in accordance with section 111AG.
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(6) The requirements of this subsection shall be met where the effective tax rate of a jurisdiction for a fiscal year calculated in accordance with section 111AC is equal to or greater than the minimum tax rate.
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(7) Notwithstanding sections 111O(1), 111U and 111AG(3), for the purposes of this section, a filing constituent entity may make an election to determine the qualifying income or loss, qualifying revenue and adjusted covered taxes of an NMCE for a fiscal year using the NMCE simplified calculations.
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(8) (a) Where a main entity is not an NMCE then none of its permanent establishments shall be considered to be an NMCE but where a main entity is an NMCE then all of its permanent establishments shall be considered to be NMCEs.
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(b) In the case of a permanent establishment that is an NMCE, the amount of the NMCE simplified calculations shall be determined under the relevant CbC regulations with respect to such permanent establishment.
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(9) All relevant information concerning the application of the simplified calculations safe harbour shall be included in the top-up tax information return for the fiscal year in accordance with section 111AAI.
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(10) The elections referred to in subsections (2) and (7) shall be made in accordance with section 111AAAD.”,
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(l) in section 111AS(7)(a)(ii), by the substitution of “transfers substantially all of its assets to a person” for “substantially all of its assets are transferred to a person”,
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(m) in section 111AT(4)(b), by the substitution of “top-up tax” for “effective tax rate”,
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(n) in section 111AW—
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(i) in subsection (2), by the insertion of the following paragraph after paragraph (d):
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“(e) For the purposes of determining the total deferred tax adjustment amount, as set out in section 111X, the reversal of a loss deferred tax asset, as set out in section 111X, shall first be attributable to a loss deferred tax asset which arose in the most recent fiscal year until the balance of the loss deferred tax asset is exhausted by such amounts, and then, if necessary, to a loss deferred tax asset which arose in the next most recent fiscal year until the balance of the loss deferred tax asset is exhausted by such amounts, and so on for preceding fiscal years.”,
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and
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(ii) in subsection (3), by the substitution of “effective tax rate” for “effective rate”,
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(o) in section 111AY(1)(b)—
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(i) in subparagraph (i), by the substitution of “section 111G(1)” for “section 111F(1)”, and
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(ii) in subparagraph (ii), by the substitution of “section 111G(2)” for “section 111F(2)”,
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(p) in section 111AAA, by the designation of that section as subsection (1) and by the insertion of the following subsection after subsection (1):
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“(2) Chapter 10 shall apply for the purpose of administering the charge to domestic top-up tax of a qualifying entity.”,
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(q) in section 111AAB(1)(c)—
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(i) in subparagraph (i), by the deletion of “and”,
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(ii) in subparagraph (ii), by the substitution of “by virtue of section 111C(2), and” for “by virtue of section 111C(2),” and
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(iii) by the insertion of the following subparagraph after subparagraph (ii):
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“(iii) is not an investment undertaking (within the meaning of section 246),”,
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(r) in section 111AAC, by the insertion of the following subsection after subsection (3):
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“(4) (a) Subject to paragraph (b), where a securitisation entity is a member of an MNE group or large-scale domestic group, then no domestic top-up tax shall be charged on that securitisation entity for a fiscal year and for the purposes of determining the domestic top-up tax of all the other qualifying entities, excluding securitisation entities, of that MNE group or large-scale domestic group for the fiscal year, section 111AD(5) shall apply as if the sum, if any, of the qualifying income of all the qualifying entities of that MNE group or large-scale domestic group for a fiscal year located in the State excluded the qualifying income, if any, of the securitisation entity.
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(b) Paragraph (a) shall not apply where there are no entities of an MNE group or large-scale domestic group located in the State in a fiscal year other than a securitisation entity.”,
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(s) in section 111AAD—
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(i) in subsection (1), by the substitution of “subsections (2) to (8)” for “subsections (2) to (6)”,
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(ii) in subsection (2), by the substitution of the following paragraph for paragraph (c):
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“(c) sections 111T(1)(b), 111AI and 111AS were omitted,”,
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(iii) in subsection (2), by the substitution of the following paragraph for paragraph (f):
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“(f) subject to subsection (8), subsections (4), (5) and (7) of section 111Z did not apply,”,
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(iv) by the insertion of the following subsection after subsection (2):
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“(2A) Where the financial accounting net income or loss for a fiscal year is determined in accordance with a local accounting standard in accordance with section 111O (as modified by subsection (2)(e)), then, for the purposes of subsection (1), this Part shall have effect for domestic purposes as if—
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(a) the reference in section 111P(6)(a) to consolidated financial statements were to financial statements prepared in accordance with the local accounting standard,
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(b) the reference in section 111AE(5) to consolidated financial statements of the ultimate parent entity were to financial statements prepared in accordance with the local accounting standard, and
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(c) the reference in section 111AN(3) to consolidated financial statements of its ultimate parent entity were to financial statements prepared in accordance with the local accounting standard.”,
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(v) in subsection (4)(a)(ii), by the insertion of “, other than a partially-owned parent entity,” after “are held by a parent entity”, and
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(vi) by the insertion of the following subsection after subsection (7):
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“(8) Notwithstanding subsection (2)(f), for the purposes of this section, a qualifying entity that is a hybrid entity or reverse hybrid entity shall be allocated the amount of any covered taxes included in the financial accounts of its constituent entity-owner where the taxes—
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(a) are allocated to the qualifying entity under section 111Z(5),
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(b) are imposed by the jurisdiction in which the constituent entity is located, and
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(c) relate to the income of the qualifying entity.”,
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(t) in section 111AAF—
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(i) in subsection (1), by the substitution of the following definition for the definition of “specified return date”:
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“ ‘specified return date’ in respect of a fiscal year, means, subject to subsection (5)—
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(a) the last day of the period of 15 months beginning on the day immediately following the end of the fiscal year, or
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(b) where the fiscal year is a transition year, the last day of the period of 18 months beginning on the day immediately following the end of the fiscal year;”,
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and
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(ii) by the insertion of the following subsection after subsection (4):
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“(5) For the purpose of the definition of ‘specified return date’ in subsection (1), where the specified return date of an entity or group would otherwise arise before 30 June 2026, the specified return date of that entity or group shall instead be 30 June 2026.”,
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(u) in section 111AAH, by the substitution of the following subsection for subsection (1):
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“(1) (a) An entity that is subject to IIR top-up tax for a fiscal year (in this Chapter referred to as a ‘relevant parent entity’), shall give notice to the Revenue Commissioners, in the form and manner specified by the Revenue Commissioners, that it is such an entity, not later than—
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(i) the last day of the period of 12 months starting on the day immediately following the last day of the first fiscal year during which it is a relevant parent entity, immediately following a fiscal year for which it was not a relevant parent entity (in this paragraph referred to as the ‘IIR registration date’), or
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(ii) 31 December 2025, where the IIR registration date is earlier than 31 December 2025.
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(b) An entity that is subject to UTPR top-up tax for a fiscal year (in this Chapter referred to as a ‘relevant UTPR entity’) shall give notice to the Revenue Commissioners in the form and manner specified by the Revenue Commissioners, that it is such an entity, not later than—
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(i) the last day of the period of 12 months starting on the day immediately following the last day of the first fiscal year during which it is a relevant UTPR entity, immediately following a fiscal year for which it was not a relevant UTPR entity (in this paragraph referred to as the ‘UTPR registration date’), or
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(ii) 31 December 2025, where the UTPR registration date is earlier than 31 December 2025.
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(c) A qualifying entity shall give notice to the Revenue Commissioners, in the form and manner specified by the Revenue Commissioners, that it is such an entity, not later than—
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(i) the last day of the period of 12 months starting on the day immediately following the last day of the first fiscal year that it is a qualifying entity, immediately following a fiscal year for which it was not a qualifying entity (in this paragraph referred to as the ‘QDTT registration date’), or
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(ii) 31 December 2025, where the QDTT registration date is earlier than 31 December 2025.”,
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(v) in section 111AAZ(5), by the substitution of “entity” for “constituent entity”, and
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(w) in section 111AAAD—
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(i) by the substitution of the following subsection for subsection (5):
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“(5) The election referred to in section 111W(2) shall not be withdrawn with respect to an ownership interest, other than a qualified ownership interest as referred to in that section, where a loss in respect of that ownership interest was included in the calculation of the qualifying income or loss of the constituent entity in the five-year period beginning on the first day of the fiscal year in respect of which the election was made.”,
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(ii) by the insertion of the following subsection after subsection (8):
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“(8A) The election referred to in section 111AKA(7) shall be made in respect of each entity to which it relates.”,
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(iii) in subsection (10), by the substitution of “subsection (7), (8), (8A) or (9)” for “subsection (7), (8) or (9)”,
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(iv) in column (1) of the Table, by the insertion of “Section 111Z(9)” after “Section 111W(2)”, and
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(v) in column (2) of the Table, by the insertion of “Section 111AKA(2) and (7)” after “Section 111AG(1)”.
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(2) Subject to subsection (3), subsection (1) shall apply in respect of a fiscal year (within the meaning of section 111A of the Principal Act) or an accounting period, as the case may be, commencing on or after 31 December 2024.
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(3) The following provisions of subsection (1) shall apply in respect of a fiscal year (within the meaning of section 111A of the Principal Act) or an accounting period, as the case may be, commencing on or after 31 December 2023:
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(a) subparagraphs (i)(II) and (iii) of paragraph (a);
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(b) subparagraph (ii) of paragraph (g);
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(c) paragraphs (k), (p), (q), (r), (t) and (u);
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(d) subparagraphs (ii), (iii), (iv) and (v) of paragraph (w).
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