Schedules
Schedule 16Multinational top-up tax: transitional provision
Part 2Transitional safe harbour
Chapter 1Transitional safe harbour election
4Qualified financial statements and basis of calculations
1
For the purposes of this Part of this Schedule “qualified financial statements” of a multinational group means—
a
the accounts used to prepare the consolidated financial statement of the ultimate parent, or
b
financial statements of members of the group prepared in accordance with acceptable accounting standards or an authorised accounting standard.
2
Where a member of a multinational group is not included in consolidated financial statements of any member of the group on a line-by-line basis solely due to size or materiality grounds, the financial accounts of that member that are used for preparation of the group’s country-by-country report are to be regarded as forming part of the qualified financial statements of the group.
3
For the purposes of establishing whether the tests in paragraphs 7 to 9 are met in relation to members of a multinational group in a territory, the basis for that determination is to be the information derived from qualified financial statements as to—
a
revenue,
b
profit (loss) before income tax, and
c
qualifying income tax expense (see paragraph 5).
4
Information derived from qualified financial statements as to revenue or profit (loss) before income tax must be adjusted—
a
as the information was adjusted for the purposes of its inclusion in a qualifying country-by-country report in relation to the territory, or
b
if the information was not included in such a report, as it would have been adjusted had it been included in such a report.
See also paragraph 6 which provides for circumstances in which further adjustments are required to profit (loss) before income tax and circumstances in which adjustments are required to qualifying income tax expense.
5
The information described in sub-paragraph (3)(a) to (c) that must be used to determine whether the tests in paragraphs 7 to 9 are met in relation to members of a multinational group in a territory must be derived from whichever of the following was used to prepare the qualifying country-by-country report in relation to the territory—
a
qualified financial statements falling within sub-paragraph (1)(a), along with any financial accounts treated as qualified financial statements as a result of sub-paragraph (2), or
b
qualified financial statements falling within sub-paragraph (1)(b), along with any financial accounts treated as qualified financial statements as a result of sub-paragraph (2).
6
Where that information in respect of a territory is not available in qualified financial statements of a multinational group, no election may be made in respect of that territory.