(1)The filing member of a multinational group may elect that a member of the group (an “owner”) with direct ownership interests in an investment entity that is a member of the group is to have those interests treated in accordance with this section.
(2)The filing member may only make such an election if—
(a)an election under section 213 is not in effect in relation to the owner,
(b)the owner is not itself an investment entity, and
(c)the owner can reasonably be expected to be subject to tax (in the territory in which it is located) on distributions from the entity at a rate equal to or exceeding 15%.
(3)If an election is made under this section, in calculating amounts under this Part—
(a)distributions and deemed distributions from the investment entity to the owner in an accounting period are to be included in the adjusted profits of the owner in that period;
(b)credit the owner receives to reduce the tax payable by the owner in an accounting period to reflect tax payable or to be paid by the entity in that period is to be included in the adjusted profits of the owner in that period;
(c)if the owner receives such credit, such tax payable or to be paid by the entity in an accounting period is to be taken into account in determining the covered tax balance of the owner in that period.
(4)If an election is made under this section—
(a)an undistributed income amount for the entity for an accounting period is to be determined under section 215, and
(b)any positive undistributed income amount is to be added to the top-up amount of that entity as determined under section 220(1) (see section 220(2)).
(5)Paragraph 1 of Schedule 15 (long term elections) applies to an election under this section.
(6)Subsection (7) applies where—
(a)an election under this section has been revoked, and
(b)the adjusted profits of the investment entity fall to be determined under section 220 for the first accounting period in respect of which the election no longer applies.
(7)Those profits are to include any positive undistributed income amount for the entity for the previous accounting period.