Finance (No. 2) Act 2023

222 Investment entity effective tax rate

The investment entity effective tax rate in a territory for an accounting period is determined by taking the following steps—

• Step 1

  Determine the adjusted profits made by each of the investment entities in the territory, as determined under Chapter 4 and adjusted under section 223.

• Step 2

  Subtract the sum of the losses of those investment entities that made a loss in that period from the sum of the profits of those investment entities that made a profit in that period.

• Step 3

  If the result of Step 2 is nil or less, the investment entity effective tax rate is to be treated as 15%. Otherwise, proceed to Step 4.

• Step 4

  Determine the covered tax balance of each such investment entity in accordance with Chapter 5.

• Step 5

  Adjust the amounts determined in Step 4 in accordance with section 223 (to the extent applicable).

• Step 6

  Add together the amounts determined in Step 5 that are adjusted positive covered tax balances.

• Step 7

  Add together the amounts determined in Step 5 that are adjusted negative covered tax balances.

• Step 8

  Subtract the result of Step 7 from the result of Step 6.

• Step 9

  Divide the result of Step 8 by the result of Step 1. This is the investment entity effective tax rate.