(1)The top-up amount for an accounting period of a member of a multinational group that is an investment entity is, subject to subsection (2), determined by taking the following steps—
Step 1
Determine the adjusted profits (if any) of the entity for the period in accordance with Chapter 4. If the adjusted profits are nil or less, the top-up amount is nil. Otherwise, proceed to Step 2.
Step 2
Adjust the result of Step 1 in accordance with section 223 (to the extent applicable). If the adjusted result is nil, the top-up amount is nil. Otherwise, proceed to Step 3.
Step 3
Determine the substance-based income exclusion for the entity for the period (see section 221).
Step 4
Adjust the result of Step 3 in accordance with section 223 (to the extent applicable).
Step 5
Subtract the result of Step 4 from the result of Step 2. If the result is nil or less, the top-up amount is nil. Otherwise, proceed to Step 6.
Step 6
Determine the investment entity effective tax rate for the territory for the period (see section 222).
Step 7
Subtract the result of Step 6 from 15%. If the result is nil or less, the top-up amount is nil. Otherwise, proceed to Step 8.
Step 8
Multiply the result of Step 7 by the result of Step 5. This is the top-up amount for the entity.
(2)If an election under section 214 (taxable distribution method election) has been made in relation to the entity, the top-up amount for an accounting period of the entity is the top-up amount determined under subsection (1) added together with any positive undistributed income amount for the entity for the period (see section 215).
(3)For the purposes of applying Chapter 4 in relation to an investment entity, the references in section 33(2) to “standard members” of a multinational group are instead to members of the multinational group that are investment entities.