Part 3Multinational top-up tax
Chapter 10Definitions etc
Ownership of entities
246Calculating percentage direct and indirect ownership interests
1
To determine the percentage of direct ownership interest an entity or individual (“E”) has in an entity (“F”)—
a
add together the proportional entitlement of E to the following types of interest that are relevant—
i
an interest that gives rise to a share of profits of F,
ii
an interest that gives rise to a share of the capital of F, and
iii
an interest that gives rise to a share of the reserves of F, and
b
if—
i
F issues all of those types of interest and all of those types are relevant, divide the result of paragraph (a) by 3, or
ii
F only issues 2 of the relevant types of interest or there are only 2 types of interest that are relevant and E issues both of them, divide the result of paragraph (a) by 2.
2
For the purposes of subsection (1)—
a
where a provision under which a percentage of ownership interests is to be determined refers to types of interest mentioned in those sub-paragraphs, the types referred to are “relevant”, and
b
where such a provision does not refer to types of interest mentioned in sub-paragraphs (i) to (iii) of subsection (1)(a), all of those types of interest are “relevant”.
3
To determine the percentage indirect ownership interest an entity or individual (“G”) has in an entity (“H”)—
a
determine the percentage indirect ownership interest arising as a result of each stack through which it has an indirect ownership interest in H, and
b
add those percentage indirect ownership interests for those stacks together.
4
For the purposes of subsection (3) a “stack” means a chain of entities through which G has an indirect ownership interest in H which is comprised of an entity (“J”) which has a direct ownership interest in H and—
a
where G has a direct ownership interest in J, G, or
b
where G does not have a direct ownership interest in J—
i
G,
ii
an entity (“K”) which has a direct ownership interest in J and that G has a direct or indirect ownership interest in, and
iii
where G does not have a direct ownership interest in K, an entity which has a direct ownership interest in K and that G has a direct or indirect ownership interest in, and so on until an entity is reached that G has a direct ownership interest in.
5
To determine G’s percentage indirect ownership interest in H arising as a result of a stack—
a
determine, in accordance with subsection (1)—
i
J’s percentage direct ownership interest in H, and
ii
the percentage direct ownership interest each other member of the stack has in the member of the stack it has a direct ownership interest in, and
b
multiply together the percentage direct ownership interests determined under paragraph (a).