قرار مجلس الوزراء رقم (142) لسنة 2024

بشأن فرض الضريبة التكميلية على المؤسسات متعددة الجنسيات

مجلس الوزراء:

بعد الاطلاع على الدستور،

وعلى القانون الاتحادي رقم (1) لسنة 1972 بشأن اختصاصات الوزارات وصلاحيات الوزراء، وتعديلاته،

وعلى المرسوم بقانون اتحادي رقم (28) لسنة 2022 في شأن الإجراءات الضريبية، وتعديلاته،

وعلى المرسوم بقانون اتحادي رقم (47) لسنة 2022 في شأن الضريبة على الشركات والأعمال، وتعديلاته،

وبناءً على ما عرضه وزير المالية، وموافقة مجلس الوزراء،

قرر:

المادة الأولى

فرض الضريبة التكميلية

يتم فرض الضريبة التكميلية على المؤسسات متعددة الجنسيات وفق الحالات والأحكام والشروط والقواعد والضوابط والإجراءات الواردة في المرفق.

المادة الثانية

سريان القرار بالنسبة للسنوات المالية

يسري هذا القرار على السنوات المالية التي تبدأ في أو بعد 01 يناير 2025.

المادة الثالثة

العمل بأحكام القرار والنشر

يُعمل بأحكام هذا القرار من 01 يناير 2025، ويُنشر في الجريدة الرسمية.

صدر عنا:

بتاريخ: 30/ جمادى الآخر / 1446هـ

الموافق: 31 / ديسمبر / 2024م

حالات وأحكام وشروط وقواعد وضوابط وإجراءات

فرض الضريبة التكميلية على المؤسسات متعددة الجنسيات

المرفقة بقرار مجلس الوزراء رقم (142) لسنة 2024

المادة (1)

نطاق التطبيق

1 - 1 نطاق تطبيق هذا القرار

1-1-1 يسري هذا القرار على الكيانات الأعضاء في مجموعة المؤسسات متعددة الجنسيات التي تبلغ إيراداتها السنوية مبلغ (750) سبعمائة وخمسين مليون يورو أو أكثر بحسب القوائم المالية الموحدة للكيان الأم النهائي في سنتين على الأقل من السنوات المالية الأربع التي تسبق مباشرة السنة المالية التي يتم اختبارها. تتضمن المادة 1.6 قواعد أخرى تُعدل تطبيق حد الإيرادات الموحدة في حالات معينة.

1-1-2 إذا كانت سنة واحدة أو أكثر من السنوات المالية لمجموعة المؤسسات متعددة الجنسيات المأخوذة في الاعتبار لأغراض المادة 1.1.1 مدتها ليست (12) اثني عشر شهراً، يتم تعديل الحدّ البالغ (750) سبعمائة وخمسين مليون يورو لكل سنة من تلك السنوات المالية تناسبياً ليتوافق مع مدة السنة المالية المعنية.

1 -2- مجموعة المؤسسات متعددة الجنسيات والمجموعة

1-2-1 مجموعة المؤسسات متعددة الجنسيات يقصد بها أي مجموعة تضم على الأقل كياناً واحداً أو منشأة دائمة لا يكون أي منهما كائناً في البلد الذي يوجد فيه الكيان الأم النهائي لمجموعة المؤسسات متعددة الجنسيات.

1-2-2 المجموعة يقصد بها مجموعة كيانات مرتبطة بمقتضى الملكية أو السيطرة بحيث تكون الأصول والالتزامات والدخل والنفقات والتدفقات النقدية لتلك الكيانات:

(أ) متضمنة في القوائم المالية الموحدة للكيان الأم النهائي.

(ب) أو مستثناة من القوائم المالية الموحدة للكيان الأم النهائي فقط لأسباب تتعلق بالحجم أو الأهمية النسبية أو أن الكيان محتفظ به لغرض بيعه.

1-2-3 المجموعة يقصد بها أيضاً كياناً يقع في بلد ولديه منشأة دائمة واحدة أو أكثر تقع في بلدان أخرى، شريطة ألا يكون الكيان جزءاً من مجموعة أخرى على النحو الوارد في المادة 2.2.1.

1 -3- الكيان العضو

1-3-1 يعد كياناً عضواً أي مما يلي:

(أ) أي كيان متضمن في مجموعة.

(ب) أي منشأة دائمة لكيان رئيسي تنطبق عليه الفقرة (أ).

1-3-2 تُعامل المنشأة الدائمة التي تكون كياناً عضواً بموجب الفقرة (ب) أعلاه على أنها منفصلة عن الكيان الرئيسي وعن أي منشأة دائمة أخرى لذلك الكيان الرئيسي.

1-3-3 لا يعد الكيان المستثنى كياناً عضواً.

1 -4 الكيان الأم النهائي

1-4-1 يقصد بالكيان الأم النهائي أي من الكيانين الآتيين:

(أ) كيان يستوفي الشرطين الآتيين:

1. يمتلك بشكل مباشر أو غير مباشر حصة مسيطرة في أي كيان آخر.
2. غير مملوك، بمقتضى حصة مسيطرة، بشكل مباشر أو غير مباشر، من قبل كيان آخر.

(ب) الكيان الرئيسي لمجموعة تقع ضمن نطاق التعريف الوارد في المادة 3.2.1.

1 -5 الكيان المستثنى

1-5-1 تعد الكيانات التالية كيانات مستثناة:

(أ) الكيان الحكومي.

(ب) المنظمة الدولية.

(ج) المنظمة غير الربحية.

(د) صندوق المعاشات التقاعدية.

(هـ) صندوق الاستثمار الذي يكون كياناً أماً نهائياً.

(و) أداة الاستثمار العقاري التي تكون كياناً أماً نهائياً.

1-5-2 تعد الكيانات التالية أيضاً كيانات مستثناة:

(أ) كيان مملوك بما لا يقل عن 95% من قيمته (مباشرة أو من خلال سلسلة من الكيانات المستثناة) من قبل واحد أو أكثر من الكيانات المستثناة المشار إليها في المادة 1.5.1 (باستثناء كيان خدمات المعاشات التقاعدية)، متى استوفى هذا الكيان أحد الشرطين التاليين أو كليهما:

1. أن يقوم بشكل حصري أو شبه حصري الاحتفاظ بالأصول أو استثمار الأموال لصالح الكيان المستثنى أو الكيانات المستثناة.
2. أن يمارس فقط أنشطة مساندة لتلك التي يمارسها الكيان المستثنى أو الكيانات المستثناة.

(ب) كيان مملوك بما لا يقل عن 85% من قيمته (مباشرة أو من خلال سلسلة من الكيانات المستثناة) من قبل واحد أو أكثر من الكيانات المستثناة المشار إليها في المادة 1.5.1 (باستثناء كيان خدمات المعاشات التقاعدية)، شريطة أن يكون كامل دخل الكيان بشكل كبير يتمثل في توزيعات أرباح مستثناة، أو مكاسب أو خسائر حقوق الملكية المستثناة التي تكون مستبعدة من حساب دخل أو خسارة الركيزة الثانية وفقاً للفقرة (ب) أو الفقرة (ج) من المادة 1.2.3.

1-5-3 يجوز للكيان العضو المبلغ أن يختار ألا يعامل كياناً ما على أنه كيان مستثنى بموجب المادتين 2.5.1. و 9.1. يكون الاختيار بموجب هذه المادة اختيار مدته خمس سنوات.

1-6 صناديق الثروة السيادية

1-6-1 على الرغم من المادة 4.1، لا يعد صندوق الثروة السيادي الذي يستوفي تعريف الكيان الحكومي كياناً أماً نهائياً.

1-6-2 إذا احتفظ صندوق الثروة السيادي المشار إليه في المادة 1.6.1 حصة مسيطرة مباشرة في كيان ما، يتم اعتبار ذلك الكيان هو الكيان الأم النهائي للمجموعة متى استوفى أياً من الشرطين الآتيين:

(أ) أن يمتلك بشكل مباشر أو غير مباشر حصة مسيطرة في كيان آخر.

(ب) أن يكون كياناً رئيسياً يقع في بلد ولديه منشأة دائمة واحدة أو أكثر تقع في بلدان أخرى، شريطة ألا يكون الكيان الرئيسي جزءًا من مجموعة أخرى مشار إليها في المادة 2.2.1 أو الفقرة (أ) من المادة .2.6.1

1-6-3 لأغراض المادة 2.6.1 وعلى الرغم من المادة 1.2.2، يقصد بالمجموعة الكيان الأم النهائي المشار إليه في المادة 2.6.1 بالإضافة إلى كل مما يلي:

(أ) الكيانات والمنشآت الدائمة المشار إليها في الفقرة (أ) أو (ب) من المادة 2.6.1.

(ب) الكيانات التي كان سيتم استبعادها فقط على أساس الحجم أو الأهمية أو على أساس أن الكيان محتفظ به لغرض بيعه، إذا كان الكيان الأم النهائي المشار إليه في المادة 2.6.1 مطالباً بإعداد قوائم مالية موحدة.

1-7 المنشآت الدائمة العائدة للكيانات المستثناة

1-7-1 إذا كان الكيان الرئيسي كياناً مُستثنى وفقاً للمادة 1.5.1 تعامل منشآته الدائمة ككيانات مستثناة.

1-7-2 لأغراض المادة 2.5.1، تؤخذ الأنشطة التي تقوم بها المنشآت الدائمة العائدة للكيان الرئيسي في الاعتبار لأغراض تحديد ما إذا كان الكيان الرئيسي يستوفي المتطلبات الواردة في الفقرتين الفرعيتين (1) و (2) من الفقرة (أ) أو الفقرة (ب) من المادة 2.5.1. وفي حال استيفاء تلك المتطلبات يتم اعتبار المنشآت الدائمة العائدة للكيان الرئيسي أيضاً كيانات مستثناة وفقاً للمادة 2.5.1.

1-8 الكيان المُستثنى المملوك من قبل صندوق استثمار أو أداة استثمار عقاري لا يكون أي منهما كيان ضمن مجموعة

1-8-1 لأغراض المادة 2.5.1، يعتبر الشرط الذي يتطلب أن يكون الكيان ضمن المجموعة مملوكاً (مباشرة أو من خلال سلسلة من الكيانات المستثناة) من قبل واحد أو أكثر من الكيانات المستثناة المشار إليها في المادة 1.5.1 مستوفى في حال كان الكيان المذكور أولاً مملوكاً من قبل صندوق استثمار أو أداة استثمار عقاري لا يكون أي منهما كيان ضمن مجموعة.

1-9 الكيانات المملوكة من قبل المنظمات غير الربحية

1-9-1 يعامل الكيان المملوك من قبل منظمة غير ربحية ككيان مستثنى شريطة استيفاء جميع الشروط الآتية:

(أ) أن تمتلك منظمة غير ربحية واحدة أو أكثر، بشكل مباشر أو غير مباشر، 100% من قيمة الكيان.

(ب) أن يكون إجمالي إيرادات المجموعة التي يكون الكيان عضواً فيها أقل من (750) سبعمائة وخمسين مليون يورو إذا لم تؤخذ في الاعتبار إيرادات المنظمات غير الربحية والكيانات المستثناة بموجب المادة .2.5.1

(ج) أن تكون إيرادات الكيان وجميع الكيانات الأخرى التي ليست منظمات غير ربحية وليست كيانات مستثناة بموجب المادة 2.5.1، أقل من 25% من إيرادات مجموعة المؤسسات متعددة الجنسيات.

1-9-2 إذا كانت مدة السنة المالية لمجموعة المؤسسات متعددة الجنسيات ليست (12) اثني عشر شهراً، يتم تعديل الحساب بموجب الفقرة (ب) من المادة 1.9.1 وفقاً للمادة 2.1.1.

المادة (2)

أحكام فرض الضريبة

2-1 يجب على الكيانات التالية سداد الضريبة التكميلية للسنة المالية:

(أ) الكيانات الأعضاء الموجودة في الدولة خلال تلك السنة المالية، بما في ذلك الكيانات التي تكون أعضاءً في مجموعة فرعية مملوكة بنسبة أقلية.

(ب) المشاريع المشتركة والمشاريع المشتركة التابعة الموجودة في الدولة خلال تلك السنة المالية.

(ج) الكيانات الأعضاء بلا بلد التي تم إنشاؤها وفقاً لقوانين الدولة والتي تعد كيانات هجينة عكسية فيما يتعلق بأي من دخل أو خسارة الركيزة الثانية الخاصة بتلك الكيانات كما تم تخصيصها وحسابها وفقاً لهذا القرار.

2-2 على الرغم من المادة 1.2، تسري الأحكام الآتية:

(أ) يجوز للكيانات الأعضاء في المجموعة الرئيسية المحلية والمجموعة الفرعية المحلية المملوكة بنسبة أقلية تعيين كيان مبلغ معين محلي لسداد الضريبة التكميلية نيابة عن أعضاء مجموعاتهم المحلية.

(ب) يجوز للمشروع المشترك والمشاريع المشتركة التابعة في مجموعة مشاريع مشتركة محلية تعيين كيان مبلغ معين محلي لسداد الضريبة التكميلية نيابة عن أعضاء مجموعة المشاريع المشتركة المحلية الخاصة بهم.

(ج) يجوز للكيانات الهجينة العكسية المشار إليها في الفقرة (ج) من المادة 1.2 تعيين كيان مبلغ معين محلي والذي يكون عضواً في المجموعة الرئيسية المحلية أو المجموعة الفرعية المحلية المملوكة بنسبة أقلية، لسداد الضريبة التكميلية الخاصة بها.

2-3 لا يخضع الكيان الاستثماري الموجود في الدولة للضريبة التكميلية.

المادة (3)

حساب دخل أو خسارة الركيزة الثانية

3-1 الحسابات المالية لتحديد دخل أو خسارة الركيزة الثانية

3-1-1 إن دخل أو خسارة الركيزة الثانية لكل كيان عضو هو صافي دخل أو خسارة المحاسبة المالية المحدد للكيان العضو للسنة المالية المعدل وفق البنود الواردة في المواد من 2.3 إلى 5.3.

3-1-2 يتم تحديد صافي الدخل أو الخسارة المحاسبة المالية للكيان العضو للسنة المالية وفقاً لقوائمه المالية المستقلة المعدة وفقاً للمعايير الدولية لإعداد التقارير المالية شريطة استيفاء كل مما يلي:

(أ) أن يكون من المتعين على جميع الكيانات الأعضاء الموجودة في الدولة إعداد قوائم مالية مستقلة وفقاً للمرسوم بقانون اتحادي رقم (47) لسنة 2022 أو القوانين واجبة التطبيق في الدولة.

(ب) أن يتم إعداد جميع القوائم المالية المستقلة للكيانات الأعضاء الموجودة في الدولة وفقاً للمعايير الدولية لإعداد التقارير المالية.

(ج) أن تكون السنة المالية لجميع القوائم المالية المستقلة للكيانات الأعضاء الموجودة في الدولة هي ذات السنة المالية للقوائم المالية الموحدة للكيان الأم النهائي.

3-1-3 في حال عدم استيفاء الشروط الواردة في المادة 2.1.3، فإن صافي دخل أو خسارة المحاسبة المالية يكون هو صافي الدخل أو الخسارة المحددة لكيان عضو عند إعداد القوائم المالية الموحدة للكيان الأم النهائي على ألا يتضمن ذلك تعديلات التوحيد العائدة إلى ما يأتي:

(أ) المعاملات التي تتم داخل المجموعة، ما لم تنطبق المادة 8.2.3.

(ب) تخصيص سعر الشراء عند استحواذ كيان ضمن مجموعة على حصة مسيطرة في كيان نتيجة اندماج الأعمال، ما لم يُستوف الشرطين الآتيين:

1. أن يقع تاريخ الاستحواذ قبل 1 ديسمبر 2021.
2. ألا يكون لدى مجموعة المؤسسات متعددة الجنسيات سجلات كافية لتحديد صافي دخل أو خسارة المحاسبة المالية الخاصة بها بناءً على القيم الدفترية غير المعدلة للأصول والالتزامات المستحوذ عليها.

ويجب أن يتضمن صافي دخل أو خسارة المحاسبة المالية تعديلات التوحيد الأخرى غير المشار إليها في الفقرتين (أ) و(ب) أعلاه وتم تضمينها في صافي دخل أو خسارة المحاسبة المالية إلى الحد الذي يمكن من خلاله، بشكل موثوق ومتسق، إثبات تعلقها بالكيان ذي الصلة.

3-1-4 إذا لم يكن من الممكن عملياً بشكل معقول تحديد صافي دخل أو خسارة المحاسبة المالية لكيان عضو بناء على معيار المحاسبة المستخدم في إعداد القوائم المالية الموحدة للكيان الأم النهائي بموجب المادة 3.1.3، يجوز تحديد صافي دخل أو خسارة المحاسبة المالية للكيان العضو للسنة المالية باستخدام معيار محاسبة مالية مقبول آخر أو معيار محاسبة مالية معتمد (يتم تعديله لمنع التباين التنافسي الجوهري) في حال استيفاء كل مما يلي:

(أ) أن يتم الاحتفاظ بالحسابات المالية للكيان العضو على أساس ذلك المعيار المحاسبي.

(ب) أن تكون المعلومات الواردة في الحسابات المالية موثوقة.

(ج) أن تكون الفروق الدائمة التي تزيد عن (1) مليون يورو، والتي تنشأ عن تطبيق مبدأ أو معيار معين على بنود الدخل أو النفقات أو المعاملات التي تختلف عن المعيار المالي المستخدم في إعداد القوائم المالية الموحدة للكيان الأم النهائي، متوافقة مع المعاملة المطلوبة بموجب معيار المحاسبة المستخدم في القوائم المالية الموحدة للكيان الأم النهائي.

3-1-5 تسري المواد 1.1.3 إلى 4.1.3 بشكل منفصل على كل مما يلي:

(أ) المشروع المشترك والمشاريع التابعة في مجموعة مشاريع مشتركة محلية.

(ب) الكيان الهجين العكسي الذي تم إنشاؤه وفقاً لقوانين الدولة.

3-2 التعديلات التي يتم إجراؤها لتحديد دخل أو خسارة الركيزة الثانية

3-2-1 يتم تعديل صافي دخل أو خسارة المحاسبة المالية للكيان العضو بموجب البنود التالية للوصول إلى دخل أو خسارة الركيزة الثانية لذلك الكيان:

(أ) صافي نفقات الضرائب.

(ب) توزيعات الأرباح المستثناة.

(ج) مكاسب أو خسائر حقوق الملكية المستثناة.

(د) طريقة إعادة التقييم المتضمّنة لمكسب أو خسارة.

(هـ) ما يستثنى بموجب المادة 3.6 من المكسب أو الخسارة من التصرف في الأصول والالتزامات.

(و) مكاسب أو خسائر العملات الأجنبية غير المتماثلة.

(ز) النفقات غير المسموح بخصمها وفق السياسة.

(ح) أخطاء الفترات السابقة والتغييرات في المبادئ المحاسبية.

(ط) نفقات المعاشات التقاعدية المستحقة.

(ي) دخل المعاش التقاعدي المستحق.

(ك) نفقات احتياطيات التأمين المستبعدة.

3-2-2 وفقاً لاختيار الكيان العضو المبلغ، يجوز لكيان عضو في حساب دخل أو خسارة الركيزة الثانية الخاصة به استبدال مبلغ التعويض القائم على الأسهم المسموح بخصمه في حساب دخله الخاضع للضريبة في الدولة، بالمبلغ المقيد في حساباته المالية كنظير تكاليف أو نفقات هذا الكيان العضو الذي تم دفعه عن التعويض القائم على الأسهم، إلى الحد الذي يسمح فيه بهذا الخصم بموجب المرسوم بقانون رقم (47) لسنة 2022. إذا نشأت نفقات التعويض القائمة على الأسهم فيما يتعلق باختيار تنتهي صلاحيته دون ممارسة، فيجب على الكيان العضو تضمين المبلغ الإجمالي الذي تم خصمه سابقاً في حساب دخل أو خسارة الركيزة الثانية الخاصة به للسنة المالية التي ينتهي فيها الاختيار. يكون الاختيار اختياراً مدته خمس سنوات ويجب تطبيقه بشكل متسق على التعويض القائم على الأسهم لجميع الكيانات الأعضاء الموجودة في الدولة للسنة التي يتم فيها إجراء الاختيار وجميع السنوات المالية اللاحقة. إذا تم إجراء الاختيار في سنة مالية بعد تسجيل بعض التعويضات القائمة على الأسهم المعاملة ما في الحسابات المالية، يجب على الكيان العضو أن يُضمن في حساب دخل أو خسارة الركيزة الثانية الخاصة به لتلك السنة المالية مبلغاً مساوياً للمبلغ الزائد عن المبلغ التراكمي المسموح به كنفقات في حساب دخل أو خسارة الركيزة الثانية الخاصة به في السنوات المالية السابقة على المبلغ التراكمي الذي كان سيُسمح به كنفقات إذا كان الاختيار قد جرى في تلك السنوات المالية. إذا تم إلغاء الاختيار، يجب على الكيان العضو أن يضمن في حساب دخل أو خسارة الركيزة الثانية الخاصة به لسنة الإلغاء المبلغ المخصوم وفقاً للاختيار الذي يجاوز نفقات المحاسبة المالية المستحقة فيما يتعلق بالتعويض القائم على الأسهم الذي لم يتم دفعه.

3-2-3 تخضع المعاملات بين الكيانات الأعضاء لما يلي:

(أ) في حال عدم تسجيل معاملة بين كيانين عضويين موجودين في بلدان مختلفة بذات المبلغ في الحسابات المالية لكل منهما، أو في حال نقل أصل بالقيمة الدفترية للكيان المتصرف أو عدم تسجيله بشكل يتوافق مع مبدأ السعر المحايد، يجب تعديل دخل أو خسارة الركيزة الثانية للكيانات الأعضاء التي هي طرف في المعاملة بحيث يتم تسجيل المعاملة بذات المبلغ وعلى نحو يتوافق مع مبدأ السعر المحايد، ما لم يكن التعديل تعديلاً من جانب واحد وكان إجراء مثل هذا التعديل سيؤدي إلى ازدواج ضريبي أو ازدواج في عدم فرض ضريبة بموجب هذا القرار.

(ب) في حال لم يتم تسجيل الخسارة الناتجة عن بيع أو نقل آخر للأصل بين كيانين عضوين موجودين في الدولة بما يتوافق مع مبدأ السعر المحايد، يجب حسابها مرة أخرى بناءً على مبدأ السعر المحايد إذا تم تضمين تلك الخسارة في حساب دخل أو خسارة الركيزة الثانية.

(ج) تسري الأحكام الواردة في المادة 4.3 في شأن تخصيص الدخل أو الخسارة بين كيان رئيسي ومنشآته الدائمة.

3-2-4 تتم معاملة الأرصدة الضريبية القابلة للاسترداد المؤهلة والأرصدة الضريبية القابلة للتسويق والنقل كدخل في حساب دخل أو خسارة الركيزة الثانية لكيان عضو. ولا تتم معاملة الأرصدة الضريبية القابلة للاسترداد غير المؤهلة والأرصدة الضريبية غير القابلة للتسويق والقابلة للنقل كدخل في حساب دخل أو خسارة الركيزة الثانية لكيان عضو.

3-2-5 فيما يتعلق بالأصول والالتزامات التي تخضع لمحاسبة القيمة العادلة أو انخفاض القيمة في القوائم المالية الموحدة، يجوز للكيان العضو المبلغ اختيار تحديد المكاسب والخسائر باستخدام مبدأ التحقق لأغراض حساب دخل الركيزة الثانية. يكون الاختيار اختيار مدته خمس سنوات ويُطبق على جميع الكيانات الأعضاء الموجودة في الدولة التي يُطبق عليها الاختيار. ويُطبق الاختيار على جميع أصول والتزامات هذه الكيانات الأعضاء، ما لم يختر الكيان العضو المبلغ حصر الاختيار في الأصول المادية لهذه الكيانات الأعضاء أو الكيانات الأعضاء التي تكون كيانات استثمارية. وبموجب هذا الاختيار تسري الأحكام الآتية:

(أ) استبعاد جميع المكاسب أو الخسائر العائدة إلى محاسبة القيمة العادلة أو انخفاض القيمة فيما يتعلق بالأصل أو الالتزام من حساب مكسب أو خسارة الركيزة الثانية.

(ب) لأغراض تحديد المكسب أو الخسارة، تكون القيمة الدفترية للأصل أو الالتزام هي قيمته الدفترية المعدلة بمقدار الاستهلاك المتراكم في التاريخ اللاحق لما يلي:

1. اليوم الأول من سنة الاختيار.
2. تاريخ الاستحواذ على الأصل أو تكبد الالتزام.

(ج) إذا تم إلغاء الاختيار، يتم تعديل دخل أو خسارة الركيزة الثانية للكيانات الأعضاء بالفرق في بداية سنة الإلغاء بين القيمة العادلة للأصل أو الالتزام والقيمة الدفترية للأصل أو الالتزام المحددة وفقاً للاختيار والمعدلة بمقدار الاستهلاك المتراكم.

3-2-6 متى يكون هناك إجمالي مكسب أصول في الدولة في سنة مالية، يجوز للكيان العضو المبلغ، بموجب هذه المادة 6.2.3، إجراء اختيار سنوي في الدولة لتعديل دخل أو خسارة الركيزة الثانية فيما يتعلق بكل سنة مالية سابقة في فترة المراجعة بالطريقة الموضحة في الفقرتين (ب) و (ج) وتوزيع أي مكسب أصول معدل متبق على فترة المراجعة بالطريقة الموضحة في الفقرة (د). يجب إعادة حساب نسبة الضريبة الفعلية والضريبة التكميلية، إن وجدت، لأي سنة مالية سابقة بموجب المادة 1.4.5. عند إجراء الاختيار بموجب هذه المادة:

(أ) استبعاد الضرائب المشمولة فيما يتعلق بأي صافي مكسب الأصول أو صافي خسارة الأصول في سنة الاختيار من حساب الضرائب المشمولة المعدلة.

(ب) يتم ترحيل إجمالي مكسب الأصول في سنة الاختيار إلى أقرب سنة خسارة سابقة ويتم خصمه بشكل نسبي من أي صافي خسارة أصول لأي كيان عضو موجود في الدولة.

(ج) إذا تجاوز مكسب الأصول المعدل، في أي سنة خسارة، المبلغ الإجمالي لصافي خسارة الأصول لجميع الكيانات الأعضاء الموجودة في الدولة، يتم ترحيل مكسب الأصول المعدل إلى سنة خسارة لاحقة (إن وجدت) ويتم خصمه بشكل نسبي من أي صافي خسارة أصول لأي كيان عضو موجود في الدولة.

(د) يتم تخصيص أي مكسب أصول معدل متبق بعد تطبيق الفقرتين (ب) و (ج) بالتساوي لكل سنة مالية في فترة المراجعة. ويتم تضمين مكسب الأصل المخصص للسنة المعنية في حساب دخل أو خسارة الركيزة الثانية لكيان عضو موجود في الدولة في تلك السنة وفقاً للمعادلة الآتية:

لأغراض المعادلة أعلاه، فإن الكيان العضو المحدد هو الكيان العضو الذي لديه صافي مكسب الأصول في سنة الاختيار وكان موجوداً في الدولة في السنة المعنية. إذا لم يكن هناك كيان عضو محدد لسنة معنية، يتم تخصيص مكسب الأصول المعدل المخصص لتلك السنة بالتساوي لكل كيان عضو في الدولة في تلك السنة.

3-2-7 يستبعد من حساب دخل أو خسارة الركيزة الثانية للكيان منخفض الضريبة أي نفقات تعود إلى ترتيب تمويل داخل المجموعة يمكن توقعه بشكل معقول، خلال المدة المتوقعة للترتيب، بحيث يتحقق الآتي:

(أ) زيادة مبلغ النفقات المتضمنة في حساب دخل أو خسارة الركيزة الثانية للكيان منخفض الضريبة.

(ب) ودون أن يترتب على ذلك زيادة تناسبية في الدخل الخاضع للضريبة للطرف المقابل مرتفع الضريبة. لا يعامل المبلغ المستلم أو المستحق على أنه زيادة في الدخل الخاضع للضريبة للطرف المقابل مرتفع الضريبة إذا كان ذلك المبلغ مؤهلاً للاستثناء أو الإعفاء أو الخصم أو المعاملة كرصيد ضريبي أو أي ميزة ضريبية أخرى بموجب القانون المحلي ويتم حساب مقدار تلك الميزة بالرجوع إلى المبلغ المستلم أو المستحق.

3-2-8 يجوز للكيان الأم النهائي اختيار تطبيق معاملته المحاسبية الموحدة لاستبعاد الدخل والنفقات والمكاسب والخسائر من المعاملات بين الكيانات الأعضاء الموجودة في الدولة والمدمجة في مجموعة ضريبية موحدة فيها لأغراض حساب صافي دخل أو خسارة الركيزة الثانية لكل من هذه الكيانات الأعضاء. ويكون الاختيار بموجب هذه المادة اختيار مدته خمس سنوات. عند إجراء أو إلغاء هذا الاختيار، يجب إجراء التعديلات المناسبة لأغراض هذا القرار بحيث لا تكون هناك ازدواجية أو حذف لبنود دخل أو خسارة الركيزة الثانية نتيجة لإجراء الاختيار أو إلغاءه.

3-2-9 يجب على شركة التأمين أن تستبعد من حساب دخل أو خسارة الركيزة الثانية المبالغ التي تفرضها على حاملي وثائق التأمين مقابل الضرائب التي تسددها شركة التأمين فيما يتعلق بالعوائد لحاملي الوثائق. يجب على شركة التأمين أن تُضمّن في حساب دخل أو خسارة الركيزة الثانية أي عوائد لحاملي وثائق التأمين تكون غير محتسبة في صافي دخل أو خسارة المحاسبة المالية إلى الحد الذي يتم فيه حساب الزيادة أو الانخفاض المقابل في الالتزام تجاه حاملي وثائق التأمين في صافي دخل أو خسارة المحاسبة المالية له.

3-2-10 تتم معاملة المبالغ المعترف بها محاسبياً كانخفاض في حقوق ملكية كيان عضو والتي تعود إلى التوزيعات المدفوعة أو مستحقة الدفع فيما يتعلق برأس المال الإضافي من المستوى الأول ورأس المال المقيد من المستوى الأول الصادر عن الكيان العضو كنفقات في حساب دخل أو خسارة الركيزة الثانية الخاصة به. يتم تضمين المبالغ المعترف بها محاسبياً كزيادة في حقوق ملكية الكيان العضو والتي تعود إلى التوزيعات المستلمة أو المستحقة فيما يتعلق برأس المال الإضافي من المستوى الأول الذي يحتفظ به الكيان العضو في حساب دخل أو خسارة الركيزة الثانية الخاصة به.

3-2-11 يجب تعديل صافي دخل أو خسارة المحاسبة المالية للكيان العضو حسبما هو مطلوب ليعكس متطلبات الأحكام ذات الصلة من المادتين (6) و(7).

3-2-12 وفقاً لاختيار الكيان العضو المبلغ، يجوز لكيان عضو استبعاد الدخل المنسوب إلى إعفاء دين مؤهل من حساب دخل أو خسارة الركيزة الثانية لكيان عضو.

3-2-13 على الرغم من الفقرة (ب) من المادة 1.2.3، يجوز للكيان العضو المبلغ إجراء اختيار مدته خمس سنوات لكل كيان عضو لتضمين جميع توزيعات أرباح فيما يتعلق بالمساهمات في المحفظة في حساب دخل الركيزة الثانية، بغض النظر عما إذا كانت مساهمات قصيرة الأجل في محفظة.

3-2-14 على الرغم من الفقرة (ج) من المادة 1.2.3، يجوز للكيان العضو المبلغ إجراء اختيار مدته خمس سنوات لمعاملة مكاسب أو خسائر صرف العملات الأجنبية باعتبارها مكاسب أو خسائر حقوق ملكية مستثناة، شريطة استيفاء الآتي:

(أ) أن تعود مكاسب أو خسائر صرف العملات الأجنبية إلى أدوات التحوط التي تحمي من مخاطر أسعار صرف العملة فيما يتعلق بحصص الملكية باستثناء المساهمة في المحفظة.

(ب) أن يتم الاعتراف بهذا المكسب أو الخسارة ضمن الدخل الشامل الآخر على مستوى القوائم المالية الموحدة.

(ج) أن تعتبر أداة التحوط بمثابة تحوط فعال بموجب معيار المحاسبة المالية المعتمد المستخدم في إعداد القوائم المالية الموحدة.

3-3 استبعاد دخل الشحن الدولي

3-3-1 بالنسبة لمجموعة المؤسسات متعددة الجنسيات التي لديها دخل شحن دولي، يتم استبعاد دخل الشحن الدولي لكل كيان عضو ودخل الشحن الدولي المساند المؤهل من حساب دخل أو خسارة الركيزة الثانية في البلد الذي يوجد فيه وفقاً للمادة 2.3. إذا نتجت خسارة عن حساب دخل الشحن الدولي لكيان عضو أو دخل الشحن الدولي المساند المؤهل، تستبعد تلك الخسارة من حساب دخل أو خسارة الركيزة الثانية الخاصة به.

3-3-2 يقصد بدخل الشحن الدولي صافي الدخل الذي يحصل عليه الكيان العضو من الأنشطة الآتية:

(أ) نقل الركاب أو البضائع بواسطة السفن التي يشغلها في حركة المرور الدولي، سواء كانت السفينة مملوكة أو مستأجرة أو تحت تصرف الكيان العضو بأي شكل آخر.

(ب) نقل الركاب أو البضائع بواسطة سفن تعمل في حركة المرور الدولي بموجب ترتيبات استئجار مساحات في السفينة.

(ج) تأجير سفينة، لاستخدامها في نقل الركاب أو البضائع في حركة المرور الدولي، على أساس استئجار سفينة مجهزة تجهيزاً كاملاً ومزودة بطواقم ومؤن.

(د) تأجير سفينة على أساس استئجار سفينة غير مجهزة (دون طاقم أو مؤن)، للاستخدام في نقل الركاب أو البضائع في حركة المرور الدولي، إلى كيان عضو آخر.

(هـ) المشاركة في تجمع أو مشروع مشترك أو وكالة تشغيل دولية لنقل الركاب أو البضائع بواسطة السفن في حركة المرور الدولي.

(و) بيع سفينة تستخدم لنقل الركاب أو البضائع في حركة المرور الدولي شريطة أن يكون قد تم الاحتفاظ بالسفينة للاستخدام من قبل الكيان العضو لمدة لا تقل عن سنة واحدة.

لا يشمل دخل الشحن الدولي صافي الدخل الذي يتم الحصول عليه من نقل الركاب أو البضائع بالسفن عبر الممرات المائية الداخلية داخل ذات البلد.

3-3-3 يقصد بدخل الشحن الدولي المساند المؤهل صافي الدخل الذي يحصل عليه الكيان العضو من الأنشطة التالية التي يتم تنفيذها بشكل أساسي فيما يتعلق بنقل الركاب أو البضائع بواسطة السفن في حركة المرور الدولي:

(أ) تأجير سفينة غير مجهزة إلى شركة شحن أخرى لا تكون كياناً عضواً، شريطة ألا تجاوز مدة الإيجار ثلاث سنوات.

(ب) بيع التذاكر التي تصدرها شركات شحن أخرى للجزء المحلي من رحلة دولية.

(ج) تأجير الحاويات وتخزينها لفترات قصيرة أو رسوم الاحتجاز بسبب التأخر في إعادة الحاويات.

(د) تقديم الخدمات إلى شركات شحن أخرى من قبل المهندسين وعمال الصيانة ومناولي البضائع وعمال التموين وموظفي خدمات العملاء.

(هـ) دخل الاستثمار في حال كان الاستثمار المدر للدخل جزءاً لا يتجزأ من مزاولة أعمال تشغيل السفن في حركة المرور الدولي.

3-3-4 يجب ألا يجاوز إجمالي دخل الشحن الدولي المساند المؤهل لجميع الكيانات الأعضاء الموجودة في بلد نسبة 50% من دخل الشحن الدولي لتلك الكيانات الأعضاء.

3-3-5 يجب خصم التكاليف التي يتكبدها كيان عضو والتي تعود مباشرة إلى أنشطة الشحن الدولي الخاصة به الواردة في المادة 2.3.3 والتكاليف التي تعود مباشرة إلى أنشطته الإضافية المؤهلة الواردة في المادة 3.3.3، من إيرادات الكيان العضو الناشئة من هذه الأنشطة لحساب دخل الشحن الدولي ودخل الشحن الدولي المساند المؤهل الخاصين به. يجب تخصيص التكاليف الأخرى التي يتكبدها كيان عضو والتي تعود بشكل غير مباشر إلى أنشطة الشحن الدولي والأنشطة الإضافية المؤهلة للكيان العضو على أساس إيرادات الكيان العضو من هذه الأنشطة بشكل تناسبي مع إجمالي إيراداته. يتم استبعاد جميع التكاليف المباشرة وغير المباشرة العائدة إلى دخل الشحن الدولي ودخل الشحن الدولي المساند المؤهل للكيان العضو من حساب دخل أو خسارة الركيزة الثانية لذلك الكيان.

3-3-6 لكي يكون دخل الشحن الدولي ودخل الشحن الدولي المساند المؤهل لكيان عضو قابلاً للاستبعاد من دخل أو خسارة الركيزة الثانية الخاصة به بموجب هذه المادة، يجب على الكيان العضو إثبات أن الإدارة الاستراتيجية أو التجارية لجميع السفن المعنية تتم فعلياً من داخل البلد الذي يوجد فيه الكيان العضو.

3-4 تخصيص الدخل أو الخسارة بين كيان رئيسي ومنشأة دائمة

3-4-1 إن صافي دخل أو خسارة المحاسبة المالية للكيان العضو الذي يكون منشأة دائمة وفقاً للفقرات (أ) و (ب) و (ج) من التعريف الوارد في المادة (18) هو صافي الدخل أو الخسارة المبين في الحسابات المالية المنفصلة للمنشأة الدائمة. إذا لم يكن للمنشأة الدائمة حسابات مالية منفصلة، فإن صافي دخل أو خسارة المحاسبة المالية يكون المبلغ الذي كان سيرد في حساباتها المالية المنفصلة لو تم إعدادها على أساس مستقل ووفقاً لمعيار المحاسبة المستخدم في إعداد الحسابات المالية الموحدة للكيان الأم النهائي.

3-4-2 يجب تعديل صافي دخل أو خسارة المحاسبة المالية للمنشأة الدائمة الوارد في المادة 1.4.3، إذا لزم الأمر، على النحو التالي:

(أ) بالنسبة للمنشأة الدائمة المعرفة في الفقرتين (أ) و (ب) من التعريف الوارد في المادة 18، فيجب أن يعكس التعديل فقط مبالغ وبنود الدخل والنفقات التي تعود إلى المنشأة الدائمة وفقاً لاتفاقية الضرائب المعمول بها أو القانون المحلي للبلد الذي توجد فيه، بغض النظر عن مقدار الدخل الخاضع للضريبة ومبلغ النفقات القابل للخصم في ذلك البلد.

(ب) بالنسبة للمنشأة الدائمة المعرفة في الفقرة (ج) من التعريف الوارد في المادة 1.18، يجب أن يعكس التعديل فقط مبالغ وبنود الدخل والنفقات التي كانت ستعود إليها وفقاً للمادة 7 من الاتفاقية الضريبية النموذجية لمنظمة التعاون الاقتصادي والتنمية.

3-4-3 في حالة الكيان العضو الذي يكون منشأة دائمة وفقاً للفقرة (د) من التعريف الوارد في المادة 1.18، فإن دخله المستخدم في حساب صافي دخل أو خسارة المحاسبة المالية يكون هو الدخل المعفى في البلد الذي يوجد فيه الكيان الرئيسي ويعود إلى العمليات التي تُجرى خارج ذلك البلد. تكون النفقات المستخدمة في حساب صافي دخل أو خسارة المحاسبة المالية هي تلك التي لا يتم خصمها لأغراض ضريبية في البلد الذي يوجد فيه الكيان الرئيسي والتي تعود إلى هذه العمليات.

3-4-4 لا يؤخذ صافي دخل أو خسارة المحاسبة المالية للمنشأة الدائمة في الاعتبار عند تحديد دخل أو خسارة الركيزة الثانية للكيان الرئيسي، باستثناء ما هو منصوص عليه في المادة 5.4.3.

3-4-5 تعامل خسارة الركيزة الثانية للمنشأة الدائمة على أنها نفقات الكيان الرئيسي (وليست نفقات المنشأة الدائمة) لأغراض حساب دخل أو خسارة الركيزة الثانية الخاصة بها إلى الحد الذي يتم فيه معاملة خسارة المنشأة الدائمة كنفقات في حساب الدخل المحلي الخاضع للضريبة لهذا الكيان الرئيسي ولا يتم خصمها من بند الدخل الذي يخضع للضريبة بموجب قوانين كل من بلد الكيان الرئيسي وبلد المنشأة الدائمة. يعامل دخل الركيزة الثانية الذي ينشأ لاحقاً في المنشأة الدائمة على أنه دخل الركيزة الثانية للكيان الرئيسي (وليس دخل المنشأة الدائمة) إلى حد مبلغ خسارة الركيزة الثانية التي تم معاملتها سابقاً كنفقات لأغراض حساب دخل أو خسارة الركيزة الثانية للكيان الرئيسي.

3-5 تخصيص الدخل أو الخسارة من الكيان الشفاف مالياً

3-5-1 يتم تخصيص صافي دخل أو خسارة المحاسبة المالية للكيان العضو الذي يكون كياناً شفافاً مالياً على النحو الآتي:

(أ) في حالة ممارسة الكيان أعماله كلياً أو جزئياً من خلال منشأة دائمة، يتم تخصيص صافي دخل أو خسارة المحاسبة المالية للكيان لتلك المنشأة الدائمة وفقاً للمادة 4.3.

(ب) في حالة الكيان الشفاف ضريبياً الذي لا يكون هو الكيان الأم النهائي، يتم تخصيص أي صافي دخل أو خسارة المحاسبة المالية متبق بعد تطبيق الفقرة (أ) لكيانات الأعضاء المالكين له وفقاً لحصص الملكية لكل منهم.

(ج) في حالة الكيان الشفاف ضريبياً الذي يكون هو الكيان الأم النهائي أو الكيان الهجين العكسي، فإنه يخصص له أي صافي دخل أو خسارة المحاسبة المالية متبق بعد تطبيق الفقرة (أ).

3-5-2 تطبق أحكام المادة 1.5.3 بشكل منفصل فيما يتعلق بكل حصة ملكية في الكيان الشفاف مالياً.

3-5-3 قبل تطبيق أحكام المادة 1.5.3، يتم تخفيض صافي دخل أو خسارة المحاسبة المالية لكيان شفاف مالياً بالمبلغ القابل للتخصيص لمالكيه الذين لا يكونوا كيانات ضمن مجموعة والذين يحتفظون بحصة ملكيتهم في الكيان الشفاف مالياً بشكل مباشر أو من خلال هيكل شفاف ضريبياً.

3-5-4 لا تسري المادة 3.5.3 على الكيانات الآتية:

(أ) الكيان الأم النهائي الذي يكون كياناً شفافاً مالياً.

(ب) أي كيان شفاف مالياً مملوك من قبل هذا الكيان الأم النهائي (سواءً بشكل مباشر أو من خلال هيكل شفاف ضريبياً).

تتناول المادة 1.7 معاملة هذه الكيانات.

3-5-5 يتم تخفيض صافي دخل أو خسارة المحاسبة المالية لكيان شفاف مالياً بالمبلغ المخصص لكيان عضو آخر.

3-5-6 يجب على المالك المباشر أو غير المباشر لحصة ملكية في كيان شفاف ضريبياً أن يعامل أي أرصدة ضريبية تتدفق من خلال ذلك الكيان الشفاف ضريبياً على أنها أرصدة ضريبية للمالك. يتم تخصيص الأرصدة الضريبية بذات نسبة دخل أو خسارة المحاسبة المالية المخصصة للمالكين وفقاً للمواد من 1.5.3 إلى 5.5.3. إذا تم تخصيص الأرصدة الضريبية بشكل مختلف للمالكين وفقاً لقانون الضرائب المحلية للبلدان التي يوجد فيها المالكون ويتم إنشاء الكيان الشفاف ضريبياً فيها، فإن تخصيص الرصيد الضريبي بموجب هذا الحكم يجب أن يتبع التخصيص الذي تم بموجب القوانين المحلية.

3-5-7 لا تسري أحكام المادة 6.5.3 متى قام الكيان العضو المبلغ بإجراء اختيار تضمين الاستثمار في حقوق الملكية أو في حال وجود ميزة ضريبية متدفقة مؤهلة، حيث تسري أحكام المادة 5.7 في هاتين الحالتين.

المادة (4)

حساب الضرائب المشمولة المعدلة

4-1 الضرائب المشمولة المعدلة

4-1-1 تكون الضرائب المشمولة المعدلة للكيان العضو للسنة المالية مساوية للنفقات الضريبية الحالية المستحقة في صافي دخل أو خسارة المحاسبة المالية الخاصة به فيما يتعلق بالضرائب المشمولة للسنة المالية ويتم تعديلها بما يأتي:

(أ) صافي مبلغ إضافات الضرائب المشمولة عن السنة المالية (على النحو المحدد بموجب المادة 2.1.4) وتخفيضات الضرائب المشمولة عن السنة المالية (على النحو المحدد بموجب المادة 3.1.4).

(ب) إجمالي المبلغ الضريبي المعدل المؤجل (على النحو المحدد بموجب المادة 4.4).

(ج) أي زيادة أو تخفيض في الضرائب المشمولة المسجلة في حقوق الملكية أو الدخل الشامل الآخر المتعلق بالمبالغ المتضمنة في حساب دخل أو خسارة الركيزة الثانية التي تخضع للضريبة بموجب قواعد الضرائب المحلية.

4-1-2 إضافات الضرائب المشمولة لكيان عضو عن السنة المالية هي مجموع ما يأتي:

(أ) أي مبلغ من الضرائب المشمولة المستحقة كنفقات متضمنة في الربح قبل تطبيق الضريبة في الحسابات المالية.

(ب) أي مبلغ خسارة الركيزة الثانية المؤجلة كأصل ضريبي مستخدم بموجب المادة 3.5.4.

(ج) أي مبلغ من الضرائب المشمولة يُسدد في السنة المالية ويتعلق بوضع ضريبي غير مؤكد إذا تمت معاملة ذلك المبلغ لسنة مالية سابقة كتخفيض للضرائب المشمولة بموجب الفقرة (د) من المادة .3.1.4

(د) أي مبلغ رصيد أو استرداد أو المبلغ القابل للنقل فيما يتعلق برصيد ضريبي قابل للاسترداد مؤهل أو رصيد ضريبي قابل للتسويق والنقل يتم تسجيله كتخفيض للنفقات الضريبية الحالية.

4-1-3 تخفيضات الضرائب المشمولة لكيان عضو للسنة المالية هي مجموع كل مما يلي:

(أ) مبلغ النفقات الضريبية الحالية فيما يتعلق بالدخل المستبعد من حساب دخل أو خسارة الركيزة الثانية بموجب المادة (3).

(ب) أي مبلغ من رصيد أو استرداد أو المبلغ القابل للنقل فيما يتعلق برصيد ضريبي لا يتم تسجيله كتخفيض في نفقة ضريبية حالية ولا يتم تحقيقه من رصيد ضريبي قابل للاسترداد مؤهل أو من رصيد ضريبي قابل للتسويق والنقل.

(ج) أي مبلغ من الضرائب المشمولة تم استرداده لكيان عضو أو تسجيله كرصيد له، أو المبلغ الذي تلقاه الكيان العضو عن نقل رصيد ضريبي لم تتم معاملته في الحسابات المالية كتعديل لنفقات الضريبة الحالية، ما لم تكن تلك المبالغ متحققة من رصيد ضريبي مؤهل قابل للاسترداد أو رصيد ضريبي قابل للتسويق والنقل.

(د) مبلغ النفقات الضريبية الحالية المتعلق بوضع ضريبي غير مؤكد.

(هـ) أي مبلغ من النفقات الضريبية الحالية لا يُتوقع سداده خلال ثلاث سنوات من اليوم الأخير من السنة المالية.

4-1-4 لا يجوز أن يؤخذ في الاعتبار أي مبلغ من الضرائب المشمولة أكثر من مرة.

4-1-5 في السنة المالية التي لا يوجد فيها صافي دخل الركيزة الثانية في الدولة، إذا كانت الضرائب المشمولة المعدلة في الدولة أقل من الصفر وأقل من مبلغ الضرائب المشمولة المعدلة المتوقع، فتتم معاملة الكيانات الأعضاء الموجودة في الدولة على أن لديها ضريبة تكميلية إضافية حالية في الدولة بموجب المادة 4.5، ناشئة في السنة المالية الحالية وتساوي الفرق بين هذين المبلغين. إن مبلغ الضرائب المشمولة المعدلة المتوقع يساوي دخل أو خسارة الركيزة الثانية في الدولة مضروباً في الحد الأدنى للضريبة.

4-1-6 يجوز للكيان العضو المبلغ إجراء اختيار سنوي لاستبدال الضريبة التكميلية الإضافية الحالية المشار إليها في المادة 5.1.4 بفائض نفقات الضريبة السالبة المرحل لفترة لاحقة وفقاً لما يلي:

(أ) يجب أن يكون فائض نفقات الضريبة السالبة للسنة المالية مساوياً للمبلغ المحتسب بموجب المادة 5.1.4 لتلك السنة المالية.

(ب) يجب استخدام فائض نفقات الضريبة السالبة المرحل لفترة لاحقة في جميع الحسابات اللاحقة ذات الصلة بنسبة الضريبة الفعلية في البلد.

(ج) يجب تخفيض إجمالي الضرائب المشمولة المعدلة (ولكن ليس إلى أقل من الصفر) بالرصيد المتبقي من فائض نفقات الضريبة السالبة المرحل لفترة لاحقة في كل سنة مالية لاحقة يكون فيها دخل ركيزة ثانية الموجب وضرائب مشمولة معدلة في الدولة، ويتم تخفيض فائض ذلك الرصيد المرحل لفترة لاحقة بذات المبلغ.

(د) يجب أن يؤخذ في الاعتبار بموجب المادة 5.1.4 فائض نفقات الضريبة السالبة الذي يعود إلى مبلغ الخسارة الذي تم ترحيله لفترة سابقة وخصمه في السنة المالية الحالية من دخل السنوات السابقة الخاضعة للضريبة لأغراض الضريبة المحلية ولا يجوز تضمينه في فائض نفقات الضريبة السالبة المرحل.

(هـ) لا يكون المبلغ السالب للضرائب المشمولة المعدلة أقل من مبلغ الضرائب المشمولة المتوقعة بموجب المادة 5.1.4.

(و) يجب أن يظل فائض نفقات الضريبة السالبة المرحل عائداً للمجموعة الناقلة إذا قامت مجموعة المؤسسات متعددة الجنسيات بالتصرف في واحد أو أكثر من الكيانات الأعضاء في الدولة.

(ز) إذا تصرفت مجموعة المؤسسات متعددة الجنسيات في جميع الكيانات الأعضاء في الدولة واستحوذت مرة أخرى على كيانات أعضاء أو أنشأت كيانات أعضاء في الدولة في سنة مالية لاحقة، يجب أن يؤخذ في الاعتبار رصيد فائض نفقات الضريبة السالبة المرحل لفترة لاحقة عند تحديد الضرائب المشمولة المعدلة في الدولة ابتداءً من تلك السنة المالية.

(ح) على مجموعة المؤسسات متعددة الجنسيات الاحتفاظ بسجل يبين الرصيد المستحق لفائض نفقات الضريبة السالبة المرحل.

4-2 تعريف الضرائب المشمولة

4-2-1 يقصد بالضرائب المشمولة كل مما يلي:

(أ) الضرائب المسجلة في الحسابات المالية لكيان عضو فيما يتعلق بدخله أو أرباحه أو حصته من دخل أو أرباح كيان عضو يمتلك فيه حصة ملكية.

(ب) الضرائب المفروضة بدلاً من ضريبة دخل شركات المطبقة بشكل عام.

(ج) الضرائب التي تفرض بالرجوع إلى الأرباح المحتجزة وحقوق الملكية في الشركات، بما في ذلك الضريبة المفروضة على مكونات متعددة على أساس الدخل وحقوق الملكية.

4-2-2 لا تشمل الضرائب المشمولة أياً من المبالغ الآتية:

(أ) الضريبة التكميلية المستحقة على كيان أم بموجب قاعدة تضمين دخل مؤهلة في بلد آخر.

(ب) الضريبة التكميلية المستحقة من كيان عضو بموجب الحد الأدنى للضريبة التكميلية المحلية المؤهلة في بلد آخر.

(ج) الضرائب العائدة إلى تعديل أجراه كيان عضو نتيجة لتطبيق قاعدة الأرباح منخفضة الضريبة المؤهلة في بلد آخر.

(د) ضريبة الإسناد القابلة للاسترداد غير المؤهلة.

(هـ) الضرائب المدفوعة من شركة التأمين فيما يتعلق بعوائد حاملي وثائق التأمين.

4-3 تخصيص الضرائب المشمولة من كيان عضو إلى كيان عضو آخر

4-3-1 تسري المادة 2.3.4 على تخصيص الضرائب المشمولة فيما يتعلق بالمنشآت الدائمة والكيانات الشفافة ضريبياً والكيانات الهجينة بالإضافة إلى تخصيص ضرائب الشركات الأجنبية المسيطر عليها والضرائب على التوزيعات من كيان عضو إلى آخر.

4-3-2 تسري الأحكام التالية بشأن تخصيص الضرائب المشمولة من كيان عضو إلى كيان عضو آخر:

(ح) مبادلة إجمالي العائد حيث يتم نقل الأصل الأساسي إلى الحسابات المالية للكيان الذي اكتسب حقوق الدخل ومكاسب رأس المال الناتجة عن الأصل الأساسي.

(ط) انتقال كيان/ كيانات حيث تتلقى مجموعة المؤسسات متعددة الجنسيات زيادة في الأساس الضريبي أو القيمة الدفترية (على سبيل المثال بناءً على القيمة العادلة للأصول) للأصول المنقولة لمكان آخر.

(ي) التغييرات في محاسبة القيمة العادلة حيث يسجل الكيان المكاسب أو الخسائر ذات الصلة من تغييرات القيمة العادلة للأصل الأساسي والتعديلات المقابلة على القيمة الدفترية للأصل.

8-1-9 لا تنطبق المادة 9.1.3 على عقد الإيجار أو الترخيص أو مبادلة إجمالي العائد حيث يقوم الأطراف المتعاملة بحساب بنود الدخل والنفقات المقابلة في ذات السنوات المالية.

9-1-9 لأغراض المادة 9.1.3، تنطبق الأحكام التالية لأغراض تحديد الأساس الضريبي لأغراض الركيزة الثانية للأصول المكتسبة التي يتم نقلها بين الكيانات الأعضاء بعد 30 نوفمبر 2021:

(أ) يجوز زيادة القيمة الدفترية للأصول المنقولة عن طريق النفقات الرأسمالية أو خفضها عن طريق الاستهلاك أو الإطفاء التي تنشأ بعد المعاملة وقبل بداية السنة الانتقالية، وفقاً لمعيار المحاسبة المتبع في القوائم المالية المستخدمة لأغراض تحديد دخل أو خسارة الركيزة الثانية.

(ب) يجب استبعاد أي زيادة في الاستهلاك أو الإطفاء تكون عائدة إلى تسجيل الأصول بالقيمة العادلة في المحاسبة المالية للكيان المستحوذ من حساب دخل أو خسارة الركيزة الثانية.

(ج) إذا سجل الكيان العضو المستحوذ الأصل المستحوذ عليه بالقيمة العادلة في حساباته المالية، يجوز له بدلاً من ذلك استخدام القيمة الدفترية لذلك الأصل الواردة في حساباته المالية في جميع السنوات اللاحقة إذا كان يحق له بخلاف ذلك أن يأخذ في الاعتبار أصلاً ضريبياً مؤجلاً يساوي الحد الأدنى للضريبة مضروباً في الفرق بين القيمة الضريبية المحلية للأصل والقيمة الدفترية للركيزة الثانية للأصل المحددة بموجب المادة 9.1.3.

10-1-9 لأغراض المادة 9.1.1، يتم تجاهل أي أصل أو التزام ضريبي مؤجل ينشأ في الحسابات المالية المستخدمة لحساب دخل أو خسارة الركيزة الثانية نتيجة المعاملة المشار إليها في المادة 9.1.3 باستثناء الحالات التالية:

(أ) في حدود ما تم سداد ضريبة مشمولة من قبل أي مما يلي:

1. الكيان المتصرف.

2. عضو في المجموعة الضريبية الموحدة المحلية للكيان المتصرف.

(ب) إلى الحد الذي كان من الممكن الاعتراف بأي أصول ضريبية مؤجلة بموجب المادة 9.1.1 من قبل الكيان العضو المتصرف في الأصول المنقولة إذا لم تحدث المعاملة المنصوص عليها في المادة 9.1.3.

11-1-9 لأغراض الاستثناء الوارد في المادة 9.1.10، تسري الأحكام الآتية:

(أ) تتحمل مجموعة المؤسسات متعددة الجنسيات عبء إثبات ما يلي:

1. مبلغ الضريبة المدفوعة فيما يتعلق بالمعاملة.

2. المبلغ المشار إليه في المادة 9.1.10(ب).

3. مبلغ أي ضرائب مشمولة يمكن أن تكون عائدة إلى المعاملة والتي كان من الممكن تخصيصها للكيان المتصرف بموجب المادة 3.4.

(ب) لا يجوز أن يجاوز الأصل الضريبي المؤجل المشار إليه في المادة 9.1.10 الحد الأدنى للضريبة مضروباً في الفرق بين القيمة الضريبية المحلية للأصل والقيمة الدفترية للركيزة الثانية للأصل المحددة بموجب المادة 9.1.3.

(ج) لا يجوز أن يؤدي الأصل الضريبي المؤجل المشار إليه في المادة 9.1.6 إلى تخفيض الضرائب المشمولة المعدلة للكيان العضو.

(د) يتم تعديل الأصل الضريبي المؤجل المشار إليه في المادة 9.1.6 سنوياً بما يتناسب مع أي انخفاض في القيمة الدفترية للأصل للسنة.

12-1-9 تسري الأحكام التالية في حال تطبيق الضريبة التكميلية على الكيانات الأعضاء في الدولة في السنة المالية التي تبدأ في أو قبل السنة المالية التي تصبح فيها قاعدة تضمين الدخل المؤهلة أو قاعدة الأرباح منخفضة الضريبة المؤهلة قابلة للتطبيق لأول مرة على تلك الكيانات الأعضاء:

(أ) تكون السنة المالية التي دخلت فيها قاعدة تضمين الدخل المؤهلة أو قاعدة الأرباح منخفضة الضريبة المؤهلة حيز التنفيذ بالنسبة لهذه الكيانات الأعضاء هي السنة الانتقالية الجديدة وتتم إعادة تقييم الخصائص الضريبية لهذه الكيانات الأعضاء وفقاً للأحكام الأخرى لهذه المادة.

(ب) يجب إلغاء فائض نفقات الضريبة السالبة المرحلة بموجب المادة 4.1.6 أو المادة 5.2.6 في بداية السنة الانتقالية الجديدة.

(ج) لا تسري المادة 4.4.4 على أي التزام ضريبي مؤجل تم أخذه في الاعتبار في حساب نسبة الضريبة الفعلية بموجب أحكام الضريبة التكميلية ولم يتم استرداده قبل السنة الانتقالية الجديدة، وتسري تلك المادة على الالتزامات الضريبية المؤجلة التي يتم أخذها في الاعتبار في السنة الانتقالية الجديدة وبعدها.

(د) فيما يتعلق بالمادة 5.4، يجب إلغاء خسارة الركيزة الثانية المؤجلة كأصل ضريبي والتي نشأت في السنة السابقة للسنة الانتقالية الجديدة، ويجوز للكيان العضو المبلغ إجراء اختيار جديد لخسارة الركيزة الثانية في السنة الانتقالية الجديدة.

(هـ) تسري المادة 9.1.2 على المعاملات التي تتم بعد 30 نوفمبر 2021 وقبل بداية السنة الانتقالية الجديدة.

(و) إذا كانت الضريبة التكميلية مستحقة الدفع نتيجة تطبيق المادة 4.1.5 فيما يتعلق بأصل ضريبي مؤجل عائدة إلى خسارة ضريبية، لا يتم التعامل مع هذا الأصل الضريبي المؤجل على أنه ناشئ عن عناصر مستبعدة من حساب دخل أو خسارة الركيزة الثانية بموجب المادة 3.

9-2 التسهيلات الانتقالية لاستبعاد الدخل القائم على وجود واقعي وكاف

1-2-9 لأغراض تطبيق المادة 5.3.3، تُستبدل النسبة البالغة 5% بالنسب الموضحة في الجدول المبين أدناه عن كل سنة مالية تبدأ في أي من السنوات التقويمية الآتية:

2-2-9 لأغراض تطبيق المادة 5.3.4، تُستبدل النسبة البالغة 5% بالنسبة الموضحة في الجدول المبين أدناه عن كل سنة مالية تبدأ في أي من السنوات التقويمية الآتية:

9-3 المرحلة الأولية من النشاط الدولي

1-3-9 على الرغم من المتطلبات المنصوص عليها في المادة 5، يتم تخفيض الضريبة التكميلية المحتسبة بموجب هذا الفصل إلى الصفر خلال المرحلة الأولية من النشاط الدولي لمجموعة المؤسسات متعددة الجنسيات، شريطة ألا تكون أي من حصص الملكية للكيانات الأعضاء الموجودة في الدولة مملوكة لكيان أم خاضع لقاعدة تضمين دخل مؤهلة في دولة أخرى.

2-3-9 تكون مجموعة المؤسسات متعددة الجنسيات في مرحلتها الأولية من نشاطها الدولي لسنة مالية ما في حال استوفت الشرطين الآتيين:

(أ) ألا تكون لها كيانات أعضاء في أكثر من (6) ست دول.

(ب) ألا يجاوز مجموع القيم الدفترية الصافية للأصول المادية لجميع الكيانات الأعضاء الموجودة في جميع البلدان، ما عدا البلد المرجعي، مبلغ (50) خمسين مليون يورو.

3-3-9 لأغراض المادة 2.3.9، فإن البلد المرجعي لمجموعة المؤسسات متعددة الجنسيات هو البلد الذي تمتلك فيه مجموعة المؤسسات متعددة الجنسيات أعلى قيمة إجمالية للأصول المادية عن السنة المالية التي تستوفي خلالها مجموعة المؤسسات متعددة الجنسيات حد الإيرادات الوارد في المادة 1.1.1. تكون القيمة الإجمالية للأصول المادية في بلد هي مجموع صافي القيم الدفترية لجميع الأصول المادية لجميع الكيانات الأعضاء في مجموعة المؤسسات متعددة الجنسيات الموجودة في ذلك البلد.

4-3-9 لا تسري هذه المادة على أي سنة مالية تبدأ بعد خمس سنوات من اليوم الأول من السنة المالية الأولى التي تستوفي فيها مجموعة المؤسسات متعددة الجنسيات حد الإيرادات الوارد في المادة 1.1.1. بالنسبة لمجموعات المؤسسات متعددة الجنسيات التي تستوفي حد الإيرادات الوارد في المادة 1.1.1 من 31 ديسمبر 2023، ستبدأ فترة الخمس سنوات من وقت دخول قاعدة الأرباح منخفضة الضريبة المؤهلة حيز التنفيذ.

المادة (10)

العملة

1-10 إذا استندت حسابات الضريبة التكميلية إلى القوائم المالية المستقلة وفقاً للمادة 3.1.2، يجب إجراء جميع الحسابات باستخدام العملة المستخدمة في القوائم المالية المستقلة.

2-10 لا تسري المادة 1.10 في حال استخدام عملات وظيفية مختلفة في قائمتين ماليتين مستقلتين أو أكثر للكيانات الأعضاء في مجموعة محلية. في هذه الحالة، يتعين على الكيان العضو المبلغ إجراء اختيار مدته خمس سنوات لاستخدام عملة عرض القوائم المالية الموحدة للكيان الأم النهائي أو الدرهم الإماراتي لأغراض حساب الضريبة التكميلية.

3-10 إذا كان المبلغ ذو الصلة بالحسابات المطلوبة بموجب المادة 1.10 مقوماً بعملة بخلاف العملة المستخدمة في القوائم المالية المستقلة ولم يتم تحويله إلى العملة المستخدمة عند إعداد القوائم المالية المستقلة، فيجب تحويل هذا المبلغ إلى العملة المستخدمة بتطبيق مبادئ تحويل العملات الأجنبية وفقاً لمعيار المحاسبة المالية التي كان ليتم تطبيقها لتحويل المبلغ إلى العملة المستخدمة إذا تم إجراء هذا التحويل عند إعداد القوائم المالية المستقلة.

4-10 في حال كانت الحسابات التي يتم إجراؤها لحساب الضريبة التكميلية ستند إلى الحسابات المستخدمة لإعداد القوائم المالية الموحدة للكيان الأم النهائي وفقاً للمادة 3.1.3، فيجب إجراء جميع الحسابات باستخدام عملة عرض القوائم المالية الموحدة للكيان الأم النهائي لمجموعة المؤسسات متعددة الجنسيات.

5-10 لأغراض المادة 4.10، إذا كان المبلغ المتعلق بالحسابات المطلوبة بموجب هذا القرار مقوماً بعملة أخرى بخلاف عملة عرض القوائم المالية الموحدة ولم يتم تحويله إلى عملة العرض عند إعداد القوائم المالية الموحدة، فيجب تحويل هذا المبلغ إلى عملة العرض بتطبيق مبادئ تحويل العملات الأجنبية وفقاً لمعيار المحاسبة المالية التي كان ليتم تطبيقها لتحويل المبلغ إلى عملة العرض لو تم إجراء هذا التحويل عند إعداد القوائم المالية الموحدة.

6-10 لأغراض تحديد ما إذا كان قد تم استيفاء أي حد أدنى منصوص عليه في هذا القرار، يتعين تحويل المبالغ ذات الصلة المقومة بعملة أخرى بخلاف اليورو إلى اليورو باستخدام متوسط أسعار الفائدة المرجعية اليومية لشهر ديسمبر السابق للسنة المالية المعنية، على النحو المحدد من قبل أي من الجهات الآتية:

(أ) البنك المركزي الأوروبي.

(ب) في حال لم يحدد البنك المركزي الأوروبي سعراً مرجعياً لصرف العملات الأجنبية للعملة المحلية في بلد، فيتم تحديد متوسط سعر الصرف الأجنبي وفقاً للسعر الذي حدده مصرف الإمارات العربية المتحدة المركزي.

(ج) في حال لم يحدد البنك المركزي الأوروبي أو مصرف الإمارات العربية المتحدة المركزي سعر صرف يومي للعملتين، يُحدد سعر الصرف الأجنبي من مصدر آخر مقبول بالنسبة للهيئة الاتحادية للضرائب.

7-10 لأغراض المادة 3.2.1 (و)، تُحدد تعديلات مكاسب أو خسائر العملات الأجنبية غير المتماثلة بالرجوع إلى العملة الضريبية المستعملة والعملة المحاسبية المستعملة للكيان العضو، ويُحوّل المبلغ الناتج عن التعديل المطلوب إلى العملة المستخدمة في القوائم المالية المستقلة في حال تطبيق المادة 3.1.2 أو عملة عرض القوائم المالية الموحدة للكيان الأم النهائي لمجموعة المؤسسات متعددة الجنسيات أو في حال تطبيق المادة 3.1.3 أو المادة 5.1.3.

8-10 لأغراض المادة 15، يجب تعبئة إقرار معلومات الركيزة الثانية باستخدام عملة العرض للقوائم المالية الموحدة للكيان الأم النهائي لمجموعة المؤسسات متعددة الجنسيات.

9-10 لأغراض المادة 1.8، يجب تقديم إقرار الضريبة التكميلية بالعملة المستخدمة لحساب الضريبة التكميلية. ويجب تحويل مبلغ الضريبة التكميلية المستحقة إلى الدرهم الإماراتي باستخدام متوسط الأسعار المرجعية اليومية خلال شهر ديسمبر السابق للسنة المالية المعنية كما هو محدد في المادة 6.15.

المادة (11)

سداد الضريبة

1-11 يجب على الكيان العضو أو المشروع المشترك أو المشاريع المشتركة التابعة أو الكيان المبلغ المعين المحلي سداد أي ضرائب تكميلية وفقاً للمادة 2 بالدرهم الإماراتي، في ذات التاريخ الذي يجب فيه تقديم إقرار الضريبة التكميلية.

المادة (12)

المسؤولية التضامنية والتكافلية

1-12 تكون جميع الكيانات الأعضاء في المجموعة الرئيسية المحلية والمجموعة الفرعية المحلية المملوكة بنسبة أقلية الموجودة في الدولة وجميع الكيانات الهجينة العكسية المشار إليها في المادة 2.1 (ج) مسؤولة بالتضامن والتكافل عن سداد كامل مبلغ الضريبة التكميلية العائد إلى أي أعضاء في تلك المجموعات والكيانات الهجينة العكسية.

2-12 تكون جميع المشاريع المشتركة والمشاريع المشتركة التابعة في مجموعة المشاريع المشتركة المحلية الموجودة في الدولة مسؤولة بالتضامن والتكافل عن سداد كامل مبلغ الضريبة التكميلية العائد إلى أعضاء تلك المجموعة.

3-12 يكون جميع الشركاء والمستفيدون وأي شخص آخر يحتفظ بحصة ملكية في كيان عضو لا يتمتع بالشخصية الاعتبارية تم إنشاؤه بموجب قوانين الدولة وملزم بسداد الضريبة التكميلية وفقاً للمادة 1.2، مسؤولين بالتضامن والتكافل عن سداد كامل مبلغ الضريبة التكميلية العائد لهذا الكيان العضو في حدود حصص ملكيتهم في هذا الكيان.

المادة (13)

التسجيل وإلغاء التسجيل

1-13 يجب على الكيان الذي يخضع للضريبة التكميلية وفقاً لأحكام هذا القرار والكيان المبلغ المعين المحلي التسجيل لدى الهيئة الاتحادية للضرائب وفقاً للإجراءات والنماذج وخلال المدة التي تحددها الهيئة.

2-13 للهيئة الاتحادية للضرائب، وفقاً لتقديرها واستناداً إلى المعلومات المتوفرة لديها، أن تسجل أي كيان لأغراض تطبيق هذا القرار اعتباراً من التاريخ الذي أصبح فيه الكيان ملزماً بالتسجيل وفقاً للمادة 1.13.

3-13 يجب على الكيان أن يتقدم بطلب إلغاء التسجيل الضريبي إلى الهيئة الاتحادية للضرائب عند انقضاء وجوده أو إذا لم يعد من المخاطبين بأحكام المادة 1، بالشكل والطريقة وخلال المدة التي تحددها الهيئة الاتحادية للضرائب.

المادة (14)

تطبيق بعض أحكام قانون ضريبة الشركات

1-14 تسري أحكام المواد التالية من المرسوم بقانون اتحادي رقم (47) لسنة 2022 على هذا القرار:

(أ) المادة 50 - القواعد العامة لمكافحة إساءة الاستخدام.

(ب) المادة 56 - حفظ السجلات.

(ج) المادة 59 - التوضيحات.

(د) المادة 60 - تقييم ضريبة الشركات والغرامات.

2-14 لأغراض المادة 1.14، تسري الأحكام الآتية:

(أ) تشمل الإشارة إلى الخاضع للضريبة الإشارة إلى الكيان العضو والكيان الرئيسي، بحسب الحال.

(ب) تشمل الإشارة إلى ضريبة الشركات الإشارة إلى الضرائب المفروضة بموجب أحكام هذا القرار.

(ج) تشمل الإشارة إلى الفترة الضريبية الإشارة إلى السنة المالية.

3-14 لأغراض الفقرة (د) من المادة 1.14، خلال السنة المالية التي تبدأ في أو قبل 31 ديسمبر 2026 باستثناء أي سنة مالية تنتهي بعد 30 يونيو 2028، لا تطبق أي غرامات أو جزاءات فيما يتعلق بتقديم إقرار الضريبة التكميلية أو إقرار معلومات الركيزة الثانية إذا ارتأت الهيئة الاتحادية للضرائب أن مجموعة المؤسسات متعددة الجنسيات قد اتخذت تدابير معقولة لضمان التطبيق الصحيح لأحكام هذا القرار.

4-14 يجوز للوزير تحديد كيفية تطبيق الأحكام الأخرى الواردة في المرسوم بقانون رقم (47) لسنة 2022 المشار إليه على هذا القرار.

المادة (15)

تقديم إقرار معلومات الركيزة الثانية

1-15 يتعين على الكيانات التي يصدر بتحديدها قرار من الوزير تقديم إقرار معلومات الركيزة الثانية للهيئة الاتحادية للضرائب وذلك وفقاً للشروط والإجراءات التي تُحدد في ذلك القرار.

2-15 يجب تقديم إقرار معلومات الركيزة الثانية وفق نموذج موحد تم نشره بواسطة الإطار الشامل لمنظمة التعاون الاقتصادي والتنمية/ مجموعة العشرين بشأن تآكل الوعاء الضريبي ونقل الأرباح الصادر بتاريخ 17 يوليو 2023 (بصيغته المعدلة من وقت لآخر) ويجب أن يتضمن المعلومات التالية المتعلقة بمجموعة المؤسسات متعددة الجنسيات (والتي يجب تحديدها أو التوسع فيها أو قصرها وفقاً لإطار تطبيق الركيزة الثانية بما في ذلك من خلال تطوير إجراءات مبسطة لتقديم الإقرارات):

(أ) تحديد الكيانات الأعضاء، بما في ذلك أرقام التعريف الضريبي الخاصة بها (حال وجودها)، والبلد الذي تقع فيه ووضعها وفقاً لقواعد الركيزة الثانية.

(ب) معلومات عن الهيكل المؤسسي العام لمجموعة المؤسسات متعددة الجنسيات بما في ذلك الحصص المسيطرة المملوكة من أي كيان ضمن مجموعة في أي كيان آخر في ذات المجموعة.

(ج) المعلومات اللازمة لحساب ما يلي:

(د) نسبة الضريبة الفعلية لكل دولة والضريبة التكميلية لكل كيان عضو بموجب أحكام معادلة لتلك المنصوص عليها في الفصل الخامس من قواعد الركيزة الثانية النموذجية.

1. الضريبة التكميلية للعضو في مجموعة مشاريع مشتركة بموجب أحكام معادلة لتلك المنصوص عليها في الفصل السادس من قواعد الركيزة الثانية النموذجية.

2. تخصيص الضريبة التكميلية بموجب قاعدة تضمين الدخل ومبلغ الضريبة التكميلية بموجب قاعدة الأرباح منخفضة الضريبة لكل دولة بموجب أحكام معادلة لتلك المنصوص عليها في الفصل الثاني من قواعد الركيزة الثانية النموذجية.

(هـ) سجل للاختيارات التي أجريت وفقاً للأحكام ذات الصلة من هذا القرار.

(و) المعلومات الأخرى المتفق عليها كجزء من إطار تطبيق الركيزة الثانية واللازمة لإدارة قواعد الركيزة الثانية.

3-15 يجب أن يطبق إقرار معلومات الركيزة الثانية التعريفات والتعليمات الواردة في النموذج الموحد الذي تم نشره بواسطة الإطار الشامل لمنظمة التعاون الاقتصادي والتنمية/ مجموعة العشرين بشأن تآكل الوعاء الضريبي ونقل الأرباح الصادر بتاريخ 17 يوليو 2023 (بصيغته كما يتم تعديلها من وقت لآخر).

4-15 يجب تقديم إقرار معلومات الركيزة الثانية والإخطارات بمقتضى هذه المادة إلى الهيئة الاتحادية للضرائب في موعد لا يجاوز 15 شهراً من اليوم الأخير للسنة المالية الخاضعة للإبلاغ.

5-15 يجوز للهيئة الاتحادية للضرائب تعديل متطلبات المعلومات والإقرارات والإخطارات الخاصة بإقرار معلومات الركيزة الثانية بغرض مواءمتها مع متطلبات إطار تطبيق الركيزة الثانية (بما في ذلك تطوير إجراءات مبسطة لتقديم الإقرارات).

6-15 تصدر الهيئة الاتحادية للضرائب قراراً تحدد فيه نموذج إقرار معلومات الركيزة الثانية.

المادة (16)

الشروحات والإرشادات

يتعين تفسير هذا القرار وتطبيقه على نحو يتوافق مع الشروحات والإرشادات الإدارية المتفق عليها التي يعتمدها من الوزير.

المادة (17)

القرارات الوزارية

يجوز للوزير إصدار أي قواعد أو شروط أو ضوابط أو إجراءات لضمان توافق أحكام هذا القرار مع أهداف قواعد الركيزة الثانية النموذجية والشروحات والإرشادات الإدارية المتفق عليها.

المادة (18)

التعريفات

في تطبيق أحكام هذا القرار، تكون للكلمات والعبارات التالية المعاني المبينة قرين كل منها، ما لم يقتض سياق النص خلاف ذلك:

1-18 تعريف المصطلحات

الدولة: دولة الإمارات العربية المتحدة.

الوزارة: تعني وزارة المالية.

الوزير: يعني وزير المالية.

معيار المحاسبة المالية المقبول: يعني المعايير الدولية لإعداد التقارير المالية والمبادئ المحاسبية المقبولة عموماً في أستراليا والبرازيل وكندا والدول الأعضاء في الاتحاد الأوروبي والدول الأعضاء في المنطقة الاقتصادية الأوروبية وهونغ كونغ (الصين) واليابان والمكسيك ونيوزيلندا وجمهورية الصين الشعبية وجمهورية الهند وجمهورية كوريا وروسيا وسنغافورة وسويسرا والمملكة المتحدة والولايات المتحدة الأمريكية.

نفقات المعاشات التقاعدية المستحقة: تعني الفرق بين مبلغ نفقات التزامات المعاشات التعاقدية المتضمنة في صافي دخل أو خسارة المحاسبة المالية والمبلغ المساهم به في صندوق المعاشات للسنة المالية. لا تشمل نفقات المعاشات التقاعدية المستحقة النفقات المستحقة عن دفعات التقاعد المباشرة للموظفين السابقين.

دخل المعاش التقاعدي المستحق: يعني مجموع دخل المعاش التقاعدي ومبلغ المساهمات في المعاش التقاعدي، إن وجدت، خلال السنة المالية.

الضريبة التكميلية الإضافية الحالية: هي مبلغ الضريبة المحدد في المادة 4.5 وأي مبلغ يُعامل على أنه ضريبة تكميلية إضافية حالية محدد بموجب المادة 4.5، كالمبلغ المحدد بموجب المادة 5.1.4.

رأس المال الإضافي من المستوى الأول: يعني أي أداة صادرة عن كيان عضو وفق متطلبات احترازية تنظيمية مطبقة على القطاع المصرفي والتي تكون قابلة للتحويل إلى حقوق ملكية أو إلى تخفيضها في حال وقوع حدث محفز محدد مسبقاً، كما أن لها خصائص أخرى مصممة للمساعدة في استيعاب الخسارة في حال حدوث أزمة مالية.

إضافات الضرائب المشمولة: تم تعريفها في المادة 2.1.4.

مكسب الأصول المعدل: فيما يتعلق بإجمالي مكسب الأصول الذي يخضع لاختيار بموجب المادة 6.2.3 يعني مبلغ مساو لإجمالي مكسب الأصول في سنة الاختيار مخفضاً بمبلغ المكسب الذي تم استخدامه مقابل صافي خسارة الأصول في سنة خسارة سابقة بموجب الفقرة (ب) أو (ج) من المادة 6.2.3.

الضرائب المشمولة المعدلة: تم تعريفها في المادة 1.1.4.

إجمالي مكسب الأصول: فيما يتعلق باختيار بموجب المادة 6.2.3، يعني صافي المكسب في سنة الاختيار من التصرف في الأصول المادية المحلية من قبل جميع الكيانات الأعضاء الموجودة في البلد فيما عدا المكسب أو الخسارة من نقل الأصول بين أعضاء المجموعة.

الإرشادات الإدارية المتفق عليها: تعني الإرشادات بشأن تفسير أو إدارة قواعد الركيزة الثانية النموذجية الصادرة عن الإطار الشامل لمنظمة التعاون الاقتصادي والتنمية/ مجموعة العشرين بشأن تآكل الوعاء الضريبي ونقل الأرباح.

الاختيار السنوي: يعني اختياراً يجريه الكيان العضو المبلغ وينطبق فقط على السنة المالية التي يتم إجراء الاختيار بشأنها.

مكسب الأصول المخصص: فيما يتعلق باختيار بموجب المادة 6.2.3، يعني مكسب الأصول المعدل المخصص لسنة مالية في فترة المراجعة بموجب الفقرة (د) من المادة 6.2.3.

مبدأ السعر المحايد: يعني المبدأ الذي يجب بموجبه تسجيل المعاملات بين الكيانات الأعضاء بالرجوع إلى الشروط التي كان من الممكن أن تتم بين مؤسسات مستقلة فيما يتعلق بمعاملات مماثلة وفي ظروف مشابهة.

مكاسب أو خسائر العملات الأجنبية غير المتماثلة: تعني مكاسب أو خسائر العملات الأجنبية لكيان تختلف عملته المحاسبية عن عملته الضريبية المستعملة، ويتحقق بشأنها كل مما يأتي:

(أ) أن تكون متضمنة في حساب الدخل أو الخسارة الخاضعة للضريبة للكيان العضو وتنسب إلى التقلبات في سعر الصرف بين عملته المحاسبية المستعملة وعملته الضريبية المستعملة.

(ب) أن تكون متضمنة في حساب صافي دخل أو خسارة المحاسبة المالية للكيان العضو وتنسب إلى التقلبات في سعر الصرف بين عملته الضريبية المستعملة وعملته المحاسبية المستعملة.

(ج) أن تكون متضمنة في حساب صافي دخل أو خسارة المحاسبة المالية لكيان عضو وتُنسب إلى تقلبات سعر الصرف بين عملة أجنبية ثالثة وعملته الوظيفية المستعملة.

(د) أن تعود إلى تقلبات سعر الصرف بين عملة أجنبية ثالثة وعملته الضريبية المستعملة، سواء تم إدراج هذا المكسب أو الخسارة بالعملة الأجنبية ضمن الدخل الخاضع للضريبة أم لا.

العملة الضريبية المستعملة هي العملة المستخدمة في تحديد الدخل أو الخسارة الخاضعة للضريبة لكيان عضو بالنسبة لضريبة مشمولة في البلد الذي يوجد فيه الكيان العضو. العملة المحاسبية المستعملة هي العملة المستخدمة لتحديد صافي دخل أو خسارة المحاسبة المالية للكيان العضو. أما العملة الأجنبية الثالثة فهي عملة أخرى بخلاف العملة الضريبية المستعملة أو العملة المحاسبية المستعملة من قبل الكيان العضو.

جهة المحاسبة المعتمدة: هي الجهة التي تتمتع بالسلطة القانونية في دولة ما لتحديد المعايير المحاسبية لأغراض إعداد التقارير المالية أو وضعها أو قبولها.

معيار المحاسبة المالية المعتمد: فيما يتعلق بأي كيان، يعني مجموعة من المبادئ المحاسبية المقبولة عموماً التي تسمح بها جهة المحاسبة المعتمدة في البلد الذي يوجد فيه هذا الكيان.

متوسط دخل أو خسارة الركيزة الثانية: تم تعريفه في المادة 2.5.5.

متوسط إيرادات الركيزة الثانية: تم تعريفه في المادة 2.5.5.

الشروحات: تعني أي شروحات لقواعد الركيزة الثانية النموذجية المعدة من قبل الإطار الشامل لمنظمة التعاون الاقتصادي والتنمية/ مجموعة العشرين بشأن تآكل الوعاء الضريبي ونقل الأرباح، كما يتم تعديلها من وقت لآخر.

القوائم المالية الموحدة: تعني كلاً مما يلي:

(أ) القوائم المالية التي يُعدها الكيان وفقاً لمعيار محاسبة مالية مقبول، والتي يتم فيها عرض الأصول والالتزامات والدخل والنفقات والتدفقات النقدية لذلك الكيان والكيانات التي له حصة مسيطرة فيها، على أنها أصول والتزامات ودخل ونفقات وتدفقات نقدية لوحدة اقتصادية واحدة.

(ب) إذا كان الكيان مشمولاً في تعريف المجموعة بموجب المادة 3.2.1، تكون القوائم المالية للكيان هي التي يتم إعدادها وفقاً لمعيار محاسبة مالية مقبول.

(ج) إذا كان لدى الكيان الأم النهائي القوائم المالية المشار إليها في أي من الفقرتين (أ) أو (ب) ولم يتم إعدادها وفقاً لمعيار محاسبة مالية مقبول، فتكون القوائم المالية هي تلك التي يتم إعدادها وفقاً لمعيار آخر من معايير المحاسبة المالية المقبولة وتخضع لإجراء تعديلات لمنع حدوث أي تباينات تنافسية جوهرية.

(د) عندما لا يقوم الكيان الأم النهائي بإعداد القوائم المالية الواردة في الفقرات أعلاه، تكون القوائم المالية الموحدة للكيان الأم النهائي هي تلك التي كان سيقوم الكيان بإعدادها لو كانت تلك القوائم المالية إلزامية بموجب قانون أو لوائح وتم إعدادها وفقاً لمعيار محاسبة مالية معتمد سواء كان معيار محاسبة مالية مقبول أو معيار محاسبة مالية معتمد آخر وتخضع لإجراء تعديلات لمنع حدوث أي تباينات تنافسية جوهرية.

الكيان العضو: تم تعريفه في المادة 1.3.1.

الكيان العضو المالك: يعني الكيان العضو الذي يمتلك بشكل مباشر أو غير مباشر حصة ملكية في كيان عضو آخر في ذات مجموعة المؤسسات متعددة الجنسيات.

نظام ضريبة الشركات الأجنبية المسيطر عليها: يعني مجموعة من القواعد الضريبية (بخلاف قاعدة تضمين الدخل) التي يخضع بموجبها المساهم المباشر أو غير المباشر في كيان أجنبي (الشركة الأجنبية المسيطر عليها) لضريبة حالية على حصته في جزء من أو كل الدخل الذي تحققه الشركة الأجنبية المسيطر عليها، بغض النظر عما إذا كان يتم توزيع ذلك الدخل حالياً على المساهم.

الحصة المسيطرة: تعني حصة ملكية في كيان يتحقق بشأنها أي مما يلي:

(أ) يُطلب من صاحب الحصة توحيد الأصول والالتزامات والدخل والنفقات والتدفقات النقدية للكيان على أساس كل بند على حدة وفقاً لمعيار محاسبة مالية مقبول.

(ب) كان سيُطلب من صاحب الحصة توحيد الأصول والالتزامات والدخل والنفقات والتدفقات النقدية للكيان على أساس كل بند على حدة إذا كان صاحب الحصة قد قام بإعداد قوائم مالية موحدة.

ويعتبر الكيان الرئيسي هو صاحب الحصص المسيطرة في منشآته الدائمة.

الجمعية التعاونية: تعني كياناً يقوم بشكل جماعي بتسويق أو الاستحواذ على سلع أو خدمات نيابة عن أعضائه ويخضع لنظام ضريبي في البلد الذي يقع فيه، ويكون الكيان قد تم تصميمه بشكل يضمن الحياد الضريبي فيما يتعلق بممتلكات الأعضاء أو خدماتهم المباعة من خلال الجمعية التعاونية وكذلك الممتلكات أو الخدمات التي استحوذ عليها الأعضاء من خلال الجمعية التعاونية.

الضرائب المشمولة: تم تعريفها في المادة 2.4.

توزيعات الأرباح القابلة للخصم: فيما يتعلق بكيان عضو يخضع لنظام توزيعات الأرباح القابلة للخصم تعني أياً مما يلي:

(أ) توزيع للأرباح على صاحب حصة ملكية تكون قابلة للخصم من الدخل الخاضع للضريبة للكيان العضو بموجب قوانين البلد الذي يقع فيه.

(ب) توزيعات أرباح رعاية على عضو في جمعية تعاونية.

نظام توزيعات الأرباح القابلة للخصم: يعني نظام ضريبي مصمم لتحقيق مستوى واحد من الضرائب بالنسبة لمالكي الكيان من خلال خصم توزيعات الأرباح على المالكين من دخل الكيان. ولهذا الغرض، يتم التعامل مع توزيعات أرباح الرعاية على الأعضاء في الجمعية التعاونية على أنها توزيعات للمالكين. إن نظام توزيعات الأرباح القابلة للخصم يتضمن أيضاً نظاماً يطبق على الجمعيات التعاونية ويعفيها من الضرائب.

الكيان المبلغ المعين: يعني الكيان العضو، ما عدا الكيان الأم النهائي، الذي تم تعيينه من قبل مجموعة المؤسسات متعددة الجنسيات لتقديم إقرار معلومات الركيزة الثانية نيابة عن مجموعة المؤسسات متعددة الجنسيات.

الكيان المحلي المعين: يعني الكيان العضو في مجموعة المؤسسات متعددة الجنسيات الموجودة في الدولة والذي تم تعيينه من قبل الكيانات الأعضاء الأخرى الموجودة في الدولة لمجموعة المؤسسات متعددة الجنسيات لتقديم إقرار معلومات الركيزة الثانية أو لتقديم الإخطارات بموجب المادة 3.15.

المستحقات غير المسموح بخصمها: تم تعريفها في المادة 4.4.6.

ضريبة الإسناد القابلة للاسترداد غير المؤهلة: تعني أي مبلغ ضريبة، بخلاف ضريبة الإسناد المؤهلة، مستحقة أو مدفوعة من قبل كيان عضو، تستوفي أياً مما يلي:

(أ) أن تكون قابلة للرد إلى المالك المستفيد لتوزيعات أرباح يوزعها هذا الكيان العضو فيما يتعلق بتلك الأرباح أو قابلاً للخصم من قبل المالك المستفيد مقابل التزام ضريبي آخر بخلاف الالتزام الضريبي المتعلق بهذه الأرباح.

(ب) أن تكون قابلة للرد إلى الشركة الموزعة عند توزيع توزيعات الأرباح.

لا تعتبر الضريبة المقتطعة من المنبع على توزيعات الأرباح التي تفرض على متلقي توزيعات الأرباح والتي يتم اقتطاعها من قبل الكيان الموزع ضريبة إسناد قابلة للاسترداد غير مؤهلة، حتى وإن قامت السلطة الضريبية لاحقاً برد كل الضريبة المقتطعة من المنبع أو جزءاً منها إلى متلقي توزيعات الأرباح.

الكيان المبلغ المعين المحلي: يعني أياً مما يلي:

(أ) كيان عضو يقدم إقرار الضريبة التكميلية ويسدد الضريبة التكميلية نيابة عن جميع أعضاء مجموعة رئيسية محلية أو مجموعة فرعية محلية مملوكة بنسبة أقلية أو كيان هجين عكسي.

(ب) مشروع مشترك أو مشروع مشترك تابع يقدم إقرار الضريبة التكميلية ويسدد الضريبة التكميلية نيابة عن جميع أعضاء مجموعة مشاريع مشتركة محلية.

المجموعة المحلية: تعني أياً مما يلي:

(أ) كيان أو أكثر من الكيانات الأعضاء في مجموعة المؤسسات متعددة الجنسيات موجود في الدولة (يشار إليها بعبارة "مجموعة رئيسية محلية").

(ب) كيان أو أكثر من الكيانات الأعضاء، موجود في الدولة، في ذات المجموعة الفرعية المملوكة بنسبة أقلية (يشار إليها بعبارة "المجموعة الفرعية المحلية المملوكة بنسبة أقلية").

(ج) مشروع مشترك أو مشروع مشترك وواحدة أو أكثر من المشاريع المشتركة التابعة أو واحدة أو أكثر من المشاريع المشتركة التابعة الموجودة في الدولة، في ذات مجموعة المشاريع المشتركة (يشار إليها بعبارة "مجموعة مشاريع مشتركة محلية").

الترتيب ذو الإدراج المزدوج: يعني ترتيباً يتم إبرامه من قبل كيانين أو أكثر من الكيانات الأم النهائية في مجموعات منفصلة، والذي بموجبه يتم كل مما يلي:

(أ) توافق الكيانات الأم النهائية على دمج أعمالها فقط بموجب عقد.

(ب) وفقاً للترتيبات التعاقدية، تقوم الكيانات الأم النهائية بإجراء توزيعات (فيما يتعلق بتوزيعات الأرباح وفي حال التصفية) على مساهميها على أساس معدل ثابت.

(ج) تُدار أنشطتها ككيان اقتصادي واحد بموجب ترتيبات تعاقدية مع الاحتفاظ بشخصيتها الاعتبارية المنفصلة.

(د) يتم تسعير حصص الملكية في الكيانات الأم النهائية أطراف العقد أو تداولها أو نقلها بشكل مستقل في أسواق رأس مال مختلفة.

(هـ) تقوم الكيانات الأم النهائية بإعداد قوائم مالية موحدة يتم فيها عرض الأصول والالتزامات والدخل والنفقات والتدفقات النقدية لجميع كيانات المجموعة معاً على أنها تتعلق بوحدة اقتصادية واحدة، والتي يشترط نظام رقابي أن يتم تدقيقها من قبل مدقق خارجي.

نسبة الضريبة الفعلية: تم تعريفها في المادة 1.1.5.

سنة الاختيار: فيما يتعلق بالاختيار السنوي تعني السنة التي يتم إجراء الاختيار بشأنها.

الموظف المؤهل: يعني الموظف، بما في ذلك الموظف بدوام جزئي، لدى كيان عضو في مجموعة المؤسسات متعددة الجنسيات، والمقاولين المستقلين المشاركين في الأنشطة التشغيلية المعتادة لمجموعة المؤسسات متعددة الجنسيات تحت توجيه وسيطرة مجموعة المؤسسات متعددة الجنسيات.

تكاليف الرواتب المؤهلة: تعني نفقات تعويضات الموظفين (بما في ذلك الرواتب والأجور والنفقات الأخرى التي توفر منفعة شخصية مباشرة ومنفصلة للموظف، كاشتراكات التأمين الصحي ومساهمات المعاشات التقاعدية)، والضرائب على الرواتب والتوظف واشتراكات التأمينات الاجتماعية التي يسددها صاحب العمل.

الأصول المادية المؤهلة: تم تعريفها في المادة 4.3.5.

الكيان: يعني أياً مما يلي:

(أ) أي شخص اعتباري.

(ب) ترتيب يقوم بإعداد حسابات مالية منفصلة، كالشراكة أو العهدة.

تعريف الكيان لا يشمل الشخص الطبيعي أو الحكومة المركزية أو حكومة الولاية أو الحكومة المحلية أو إدارتها أو وكالاتها التي تمارس مهام حكومية.

اختيار تضمين الاستثمار في حقوق الملكية: يعني اختيار مدته خمس سنوات يتم إجراؤه على أساس البلد لتطبيق أحكام المادة 5.7 فيما يتعلق بجميع حصص الملكية (باستثناء المساهمة في المحفظة) المملوكة للكيانات الأعضاء الموجودة في البلد، غير أنه لا يمكن إلغاء الاختيار فيما يتعلق بحصة ملكية إذا تم أخذ الخسارة المتعلقة بتلك الحصة في الاعتبار في حساب دخل أو خسارة الركيزة الثانية خلال الفترة التي كان هذا الاختيار سارياً فيها.

مواد تعديل نسبة الضريبة الفعلية: تعني المواد 6.2.3 و4.4.4 و1.6.4 و4.6.4.

اليورو: يعني عملة الوحدة الاقتصادية والنقدية للاتحاد الأوروبي.

الربح الزائد: تم تعريفه في المادة 2.2.5.

توزيعات الأرباح المستثناة: تعني توزيعات الأرباح أو التوزيعات الأخرى المستلمة أو المستحقة فيما يتعلق بحصة ملكية، فيما عدا كل مما يلي:

(أ) مساهمة قصيرة الأجل في محفظة.

(ب) حصة ملكية في كيان استثماري تخضع لاختيار بموجب المادة 4.7.

الكيان المستثنى: تم تعريفه في المادتين 1.5.1 و2.5.1.

مكسب أو خسارة حقوق الملكية المستثناة: يعني المكسب أو الربح أو الخسارة المتضمنة في صافي دخل أو خسارة المحاسبة المالية للكيان العضو الذي ينشأ عن كل مما يلي:

(أ) المكاسب والخسائر الناتجة عن التغييرات في القيمة العادلة لحصة الملكية، فيما عدا المساهمة في محفظة.

(ب) الربح أو الخسارة فيما يتعلق بحصة ملكية متضمنة بموجب طريقة المحاسبة على أساس حقوق الملكية.

(ج) المكاسب والخسائر الناتجة عن التصرف في حصة ملكية، باستثناء التصرف في مساهمة في محفظة.

نفقات احتياطيات التأمين المستبعدة: تعني أي نفقات يتحملها كيان عضو يكون شركة تأمين، فيما يتعلق بحركة احتياطيات التأمين للكيان إلى الحد الذي يساوي فيه مبلغ النفقات أي مما يلي:

(أ) توزيعات الأرباح المستثناة، مخصوماً منها رسوم إدارة الاستثمارات، من ورقة مالية محتفظ بها نيابة عن حامل وثيقة التأمين.

(ب) مكسب أو خسارة حقوق الملكية المستثناة من ورقة مالية محتفظ بها نيابة عن حامل وثيقة التأمين.

الكيان العضو المبلغ: هو الكيان الذي يقدم إقرار الضريبة التكميلية بموجب المادة 1.8.

صافي دخل أو خسارة المحاسبة المالية: تم تعريفه في المادتين 2.1.3 و3.13.

السنة المالية: تعني الفترة المحاسبية التي تقوم كيانات الأعضاء بإعداد قوائم مالية مستقلة عنها أو يقوم الكيان الأم النهائي لمجموعة المؤسسات متعددة الجنسيات بإعداد قوائم مالية موحدة عنها، بحسب مقتضى الحال. وفي حالة القوائم المالية الموحدة كما هي معرفة في الفقرة (د) من تعريف القوائم المالية الموحدة، فإن السنة المالية تعني السنة الميلادية.

اختيار مدته خمس سنوات: يعني اختيار يُجريه كيان عضو مبلغ ويتعلق بسنة مالية (سنة الاختيار) ولا يمكن إلغاؤه فيما يتعلق بسنة الاختيار أو السنوات المالية الأربع اللاحقة. إذا تم إلغاء اختيار مدته خمس سنوات فيما يتعلق بسنة مالية (سنة الإلغاء)، فلا يمكن إجراء اختيار جديد فيما يتعلق بالسنوات المالية الأربع اللاحقة لسنة الإلغاء.

الحكومة العامة: تعني الإدارة المركزية، والوكالات التي تخضع عملياتها لسيطرتها الفعلية والحكومات الولايات والحكومات المحلية وإداراتها.

الكيان الحكومي: يعني الكيان الذي يستوفي جميع المعايير المنصوص عليها في الفقرات من (أ) إلى (د) الآتية:

(أ) يكون جزءاً من حكومة أو مملوكاً بالكامل لها (بما في ذلك أي تقسيم سياسي فرعي أو سلطة محلية تابعة لها).

(ب) الغرض الرئيسي منه هو أي مما يلي:

1. أداء وظيفة حكومية.

2. إدارة أو استثمار أصول تلك الحكومة أو البلد من خلال القيام بالاستثمارات والاحتفاظ بها وإدارة الأصول والأنشطة الاستثمارية ذات الصلة بأصول الحكومة أو البلد.

ولا يقوم الكيان بممارسة التجارة أو الأعمال.

(ج) يكون مسؤولاً أمام الحكومة عن أدائه الكلي، ويقدم تقارير معلوماتية سنوية إلى الحكومة.

(د) تؤول أصوله إلى تلك الحكومة عند حله إلى الحد الذي يوزع به أرباح صافية، بحيث تُوزع هذه الأرباح الصافية على هذه الحكومة فقط دون أن يعود أي جزء من صافي أرباحه لصالح أي شخص من القطاع الخاص.

المجموعة: تم تعريفها في المادتين 2.2.1 و3.2.1.

كيان ضمن مجموعة: فيما يتعلق بأي كيان أو مجموعة، يعني كياناً عضواً في ذات المجموعة.

الطرف المقابل مرتفع الضريبة: يعني كياناً عضواً موجوداً في بلد لا يكون بلد منخفض الضريبة، أو موجوداً في بلد لا يكون بلد منخفض الضريبة إذا تم تحديد نسبة الضريبة الفعلية في ذلك البلد بغض النظر عن أي دخل أو نفقات مستحقة من قبل هذا الكيان فيما يتعلق بترتيب تمويل يتم داخل المجموعة.

المعايير الدولية لإعداد التقارير المالية: تعني المعايير الدولية لإعداد التقارير المالية.

قاعدة تضمين الدخل: تعني القواعد المعادلة للمواد من 1.2 إلى 3.2 من قواعد الركيزة الثانية النموذجية.

طريقة إعادة التقييم المتضمنة لمكسب أو خسارة: تعني صافي المكسب أو الخسارة، التي تتم زيادتها أو تخفيضها بأي ضرائب مشمولة ذات صلة، للسنة المالية فيما يتعلق بجميع الممتلكات والمنشآت والمعدات، والذي ينشأ بموجب طريقة أو ممارسة محاسبية تستوفي كلاً مما يلي:

(أ) أن تعدل القيمة الدفترية لهذه الممتلكات دورياً إلى قيمتها العادلة.

(ب) أن تسجل التغييرات في القيمة في الدخل الشامل الآخر.

(ج) ألا تدرج في الدخل الشامل الآخر، في وقت لاحق، المكاسب أو الخسائر المسجلة من خلال الربح أو الخسارة.

كيان التأمين الاستثماري: يعني كياناً يستوفي كلاً مما يلي:

(أ) أن يستوفي تعريف صندوق استثمار أو أداة استثمار عقاري غير أنه تم تأسيسه فيما يتعلق بالتزامات بموجب عقد تأمين أو عقد معاشات.

(ب) أن يكون مملوكاً بالكامل من كيان أو من عدد من الكيانات تكون جميعها أعضاء في ذات مجموعة المؤسسات متعددة الجنسيات، والتي تخضع للرقابة التنظيمية في موقعها كشركة تأمين.

تشمل الكيانات المشار إليها في الفقرة (ب) من هذا التعريف أيضاً الكيانات الشفافة مالياً شريطة أن تخضع للرقابة التنظيمية بذات الطريقة التي تخضع لها شركة التأمين.

الكيان الأم الوسيط: يعني كياناً عضواً (غير الكيان الأم النهائي أو الكيان الأم المملوك جزئياً أو المنشأة الدائمة أو الكيان الاستثماري) يمتلك (بشكل مباشر أو غير مباشر) حصة ملكية في كيان عضو آخر في ذات مجموعة المؤسسات متعددة الجنسيات.

المنظمة الدولية: تعني أي منظمة بين الحكومات (بما في ذلك منظمة خاضعة لسلطة بلدان متعددة)، أو وكالة أو جهاز تملكهما بالكامل، تستوفي جميعها المعايير المنصوص عليها في الفقرات من (أ) إلى (ج) أدناه:

(أ) تتكون بصورة رئيسية من حكومات.

(ب) يكون لها مقر رئيسي أو اتفاقية مماثلة (على سبيل المثال، الترتيبات التي تمنح امتيازات وحصانات لمكاتب المنظمة أو منشآتها في البلد (كقسم فرعي أو مكتب محلي أو إقليمي)) مع البلد الذي أنشئت فيه.

(ج) يمنع القانون أو الوثائق المنظمة لها أن يكون دخلها عائداً لأشخاص من القطاع الخاص.

دخل الشحن الدولي: تم تعريفه في المادة 2.3.3.

ترتيب تمويل داخل المجموعة: يعني أي ترتيب يتم إبرامه بين عضوين أو أكثر في مجموعة المؤسسات متعددة الجنسيات حيث يقدم الطرف المقابل مرتفع الضريبة بشكل مباشر أو غير مباشر تمويلاً (ائتماناً) أو يستثمر بطريقة أخرى في كيان منخفض الضريبة.

الكيان الاستثماري: يعني كلاً مما يلي:

(أ) صندوق استثمار أو أداة استثمار عقاري أو كيان تأمين استثماري.

(ب) كيان مملوك بنسبة 95% على الأقل مباشرة من قبل الكيان المشار إليه في الفقرة (أ) أو من خلال سلسلة من تلك الكيانات ويقوم بشكل حصري أو شبه حصري بحيازة الأصول أو استثمار الأموال لصالح تلك الكيانات الاستثمارية.

(ج) كيان يمتلك فيه الكيان المشار إليه في الفقرة (أ) ما لا يقل عن 85% من قيمته شريطة أن يكون كل دخل الكيان بشكل كبير توزيعات أرباح مستثناة أو مكاسب أو خسائر حقوق ملكية مستثناة تكون مستثناة من حساب دخل أو خسارة الركيزة الثانية وفقاً للمادة 1.2.3 (ب) أو (ج).

صندوق الاستثمار: يعني الكيان الذي يستوفي جميع المعايير الواردة في الفقرات من (أ) إلى (ز) أدناه:

(أ) يكون مصمماً لتجميع الأصول (التي قد تكون مالية وغير مالية) من عدد من المستثمرين (بعضهم غير متصلين).

(ب) يقوم بالاستثمار وفقاً لسياسة استثمار محددة.

(ج) يسمح للمستثمرين بتقليل تكاليف المعاملات والبحوث والتحليل أو توزيع المخاطر بشكل جماعي.

(د) يكون مصمماً في المقام الأول لتحقيق دخل أو مكسب استثماري أو الحماية من حدث أو نتيجة عامة أو محددة.

(هـ) للمستثمرين الحق في عائدات أصول الصندوق أو الدخل المحقق من تلك الأصول نتيجة المساهمات التي يقدمها هؤلاء المستثمرون.

(و) يخضع الكيان أو إدارته لقواعد تنظيمية في البلد الذي تم تأسيسه أو إدارته فيه (بما في ذلك التشريعات المناسبة لمكافحة غسل الأموال وحماية المستثمرين).

(ز) يديره مختصون في إدارة صناديق الاستثمار نيابة عن المستثمرين.

المشروع المشترك: يعني كياناً يتم التقرير عن نتائجه المالية في القوائم المالية الموحدة للكيان الأم النهائي وفقاً لطريقة المحاسبة على أساس حقوق الملكية شريطة أن يمتلك الكيان الأم النهائي بشكل مباشر أو غير مباشر ما لا يقل عن 50% من حصص الملكية فيه. ولا يشمل المشروع المشترك أياً ما يلي:

(أ) كيان أم نهائي لمجموعة المؤسسات متعددة الجنسيات تخضع لقواعد الركيزة الثانية.

(ب) كيان مستثنى على النحو المحدد في المادة 1.5.1.

(ج) كيان تحتفظ مجموعة المؤسسات متعددة الجنسيات بحصة ملكية مباشرة فيه من خلال الكيان المستثنى المشار إليه في المادة 1.5.1 والذي يتحقق بشأنه أي مما يلي:

1. يقوم بشكل حصري أو شبه حصري بحيازة الأصول أو استثمار الأموال لصالح مستثمريه.

2. ينفذ أنشطة مساندة لتلك الأنشطة التي يقوم بها الكيان المستثنى.

3. يستبعد دخله بشكل كبير من حساب دخل أو خسارة الركيزة الثانية وفقاً للمادة 1.2.3 (ب) و (ج).

(د) كيان مملوك لمجموعة المؤسسات متعددة الجنسيات التي تتكون حصرياً من كيانات مستثناة.

(هـ) مشروع مشترك تابع.

مجموعة المشاريع المشتركة: تعني المشروع المشترك والمشاريع المشتركة التابعة له.

المشروع المشترك التابع: يعني أي كيان يتم توحيد أصوله والتزاماته ودخله ونفقاته وتدفقاته النقدية من قبل مشروع مشترك بموجب معيار محاسبة مالية مقبول (أو كان يتعين توحيدها إذا كان توحيد تلك البنود مطلوباً وفقاً لمعيار المحاسبة المالية المقبول). ويجب معاملة المنشأة الدائمة التي يكون كيانها الرئيسي هو مشروع مشترك أو مشروع مشترك تابع على أنه مشروع مشترك تابع منفصل.

بلد: يعني دولة أو بلد ذو استقلال مالي، وقد يشمل ذلك دولة الإمارات العربية المتحدة حسبما يقتضي سياق النص.

الكيان (أو الكيانات) العضو المسؤول: يعني واحداً أو أكثر من الكيانات الأعضاء الموجودة في الدولة والتي يمكن أن تكون مسؤولة عن الضريبة التكميلية في حال عدم تطبيق الملاذ الضريبي الأمن بموجب الركيزة الثانية في المادة 2.8.

الأصول المادية المحلية: تعني الممتلكات غير المنقولة الموجودة في ذات البلد الذي يوجد فيه الكيان العضو.

فترة المراجعة: فيما يتعلق بالاختيار بموجب المادة 6.2.3 تعني سنة الاختيار والسنوات المالية الأربع السابقة.

سنة الخسارة: فيما يتعلق بالبلد الذي قام الكيان العضو المبلغ بإجراء اختيار بشأنه بموجب المادة 6.2.3، تعني السنة المالية في فترة المراجعة التي يوجد فيها صافي خسارة أصول لكيان عضو في ذلك البلد ويجاوز المبلغ الإجمالي لصافي خسارة الأصول لجميع هذه الكيانات الأعضاء المبلغ الإجمالي لصافي مكسب أصولها.

الكيان منخفض الضريبة: يعني الكيان العضو الموجود في بلد منخفض الضريبة أو في بلد من الممكن أن يكون منخفض الضريبة لو كان قد تم تحديد نسبة الضريبة الفعلية للبلد بغض النظر عن أي دخل أو نفقات مستحقة من قبل هذا الكيان فيما يتعلق بترتيب تمويل داخل المجموعة.

البلد منخفض الضريبة: فيما يتعلق بمجموعة المؤسسات متعددة الجنسيات في أي سنة مالية، يعني البلد الذي يكون فيه لمجموعة المؤسسات متعددة الجنسيات صافي دخل الركيزة الثانية وتخضع لنسبة ضريبة فعلية (على النحو المحدد في المادة (5)) في تلك الفترة أقل من الحد الأدنى للضريبة.

الكيان الرئيسي: فيما يتعلق بمنشأة دائمة، هو الكيان الذي يقوم بتضمين صافي دخل أو خسارة المحاسبة المالية للمنشأة الدائمة في قوائمه المالية.

حد السعر القابل للتسويق: يعني 80% من القيمة الحالية الصافية للرصيد الضريبي، حيث يتم تحديد هذه القيمة على أساس العائد حتى أجل الاستحقاق بالنسبة لأداة دين صادرة عن الحكومة التي أصدرت الرصيد الضريبي بأجل استحقاق متساوٍ أو مماثل (وحتى أجل استحقاق مدته (5) خمس سنوات) في ذات السنة المالية التي يتم فيها تحويل الرصيد الضريبي (أو سنة المنشأ إذا لم يتم تحويله). لأغراض هذا التعريف يسري ما يلي:

• (أ) مبلغ الرصيد الضريبي هو القيمة الاسمية للرصيد أو المبلغ القابل للتحويل لرصيد المتبقي فيما يتعلق بالرصيد الضريبي.
• (ب) يجب أن تستند توقعات التدفق النقدي التي يتم أخذها في الاعتبار في حساب القيمة الحالية الصافية إلى الحد الأقصى للمبلغ الذي يمكن استخدامه كل سنة بموجب التصميم القانوني للرصيد.

الرصيد الضريبي القابل للتسويق والنقل: يعني رصيداً ضريبياً يمكن لحامله استخدامه لتخفيض التزاماته عن الضريبة المشمولة في البلد الذي أصدر الرصيد الضريبي شريطة استيفاء الشروط التالية:

(أ) في حالة منشئ الرصيد الضريبي، يتعين استيفاء ما يلي:

1. يجب تصميم نظام الرصيد الضريبي بطريقة تُمكن حامل الرصيد من نقل الرصيد إلى طرف غير مرتبط في السنة المالية التي يلبي فيها معايير الأهلية للرصيد (سنة المنشأ) أو في غضون (15) خمسة عشر شهراً من نهاية سنة المنشأ.
2. يتم نقل الرصيد الضريبي إلى طرف غير مرتبط في غضون (15) خمسة عشر شهراً من نهاية سنة المنشأ (أو إذا لم يتم نقله أو تم نقله بين أطراف مرتبطة، تتم مبادلة رصيد ضريبي مماثل بين أطراف غير مرتبطة في غضون (15) خمسة عشر شهراً من نهاية سنة المنشأ بسعر يساوي أو يجاوز حد السعر القابل للتسويق.

(ب) في حالة مشتري الرصيد الضريبي، يتعين استيفاء ما يلي:

1. يجب تصميم نظام الرصيد الضريبي بطريقة تُمكن المشتري من نقل الرصيد إلى طرف غير مرتبط في السنة المالية التي اشترى فيها الرصيد الضريبي.
2. أن يسمح الإطار القانوني الذي يتم بموجبه توفير الرصيد الضريبي للمشتري بنقل الرصيد الضريبي إلى طرف غير مرتبط ويخضع المشتري لذات القيود القانونية أو قيود أقل صرامة على نقل الرصيد من تلك التي تنطبق على منشئ الرصيد.
3. يحصل المشتري على الرصيد من طرف غير مرتبط بسعر يساوي أو يجاوز حد السعر القابل للتسويق.

لأغراض هذا التعريف، يُعتبر منشئ الرصيد والمشتري طرفين مرتبطين إذا كان أحدهما يمتلك، بشكل مباشر أو غير مباشر، ما لا يقل عن 50% من حصة الملكية في الآخر (أو في حالة الشركة، ما لا يقل عن 50% من إجمالي حقوق التصويت وقيمة حصص الشركة) أو يمتلك شخص آخر، بشكل مباشر أو غير مباشر، ما لا يقل عن 50% من حصة الملكية (أو في حالة الشركة، ما لا يقل عن 50% من إجمالي حقوق التصويت وقيمة حصص الشركة) في كل من منشئ الرصيد والمشتري. وفي جميع الأحوال، يعتبر منشئ الرصيد والمشتري طرفين مرتبطين إذا كان أحدهما، بناءً على كافة الحقائق والظروف ذات الصلة، لديه سيطرة على الآخر أو كان كلاهما تحت سيطرة ذات الشخص أو الأشخاص.

التباين التنافسي الجوهري: فيما يتعلق بتطبيق مبدأ أو إجراء معين بموجب مجموعة من المبادئ المحاسبية المقبولة عموماً، يعني تطبيقاً ينتج عنه اختلاف إجمالي يزيد عن (75) خمسة وسبعين مليون يورو في سنة مالية مقارنة بالمبلغ الذي كان سيتم تحديده من خلال تطبيق مبدأ أو إجراء من المعايير الدولية لإعداد التقارير المالية ذات الصلة. إذا أدى تطبيق مبدأ أو إجراء معين إلى تباين تنافسي جوهري، يجب تعديل المعالجة المحاسبية لأي بند أو معاملة خاضعة لذلك المبدأ أو الإجراء لتتوافق مع المعالجة المطلوبة للبند أو المعاملة بموجب المعايير الدولية لإعداد التقارير المالية وفقاً لأي إرشادات إدارية متفق عليها.

الحد الأدنى للضريبة: يعني 15% خمسة عشر بالمئة.

الكيان العضو المملوك بنسبة أقلية: يعني كياناً عضواً مملوك للكيان الأم النهائي بحصة ملكية مباشرة أو غير مباشرة تبلغ 30% أو أقل.

الكيان الأم المملوك بنسبة أقلية: يعني كياناً عضواً مملوكاً بنسبة أقلية يمتلك، بشكل مباشر أو غير مباشر، الحصص المسيطرة لكيان عضو آخر مملوك بنسبة أقلية، باستثناء الحالات التي تكون فيها الحصص المسيطرة للكيان المذكور أولاً، مملوكة بشكل مباشر أو غير مباشر من قبل كيان عضو آخر مملوك بنسبة أقلية.

المجموعة الفرعية المملوكة بنسبة أقلية: تعني الكيان الأم المملوك بنسبة أقلية وشركاتها التابعة المملوكة بنسبة أقلية.

الشركة التابعة المملوكة بنسبة أقلية: تعني الكيان العضو المملوك بنسبة أقلية والذي يمتلك حصص المسيطرة فيه، بشكل مباشر أو غير مباشر، كيان أم مملوك بنسبة أقلية.

مجموعة المؤسسات متعددة الجنسيات: تم تعريفها في المادة 1.2.1.

حصة مجموعة المؤسسات متعددة الجنسيات القابلة للتخصيص من دخل الركيزة الثانية للكيان الاستثماري: تم تعريفها في المادة 7.3.4.

مجموعة المؤسسات متعددة الجنسيات ذات كيانات أم متعددة: تعني مجموعتين أو أكثر، يتحقق بشأنها كل مما يلي:

• (أ) أن تُبرم الكيانات الأم النهائية لتلك المجموعات ترتيباً يكون هيكلاً متشابكاً أو ترتيباً ذي إدراج مزدوج.
• (ب) أن يقع كيان واحد على الأقل أو منشأة دائمة واحدة على الأقل عائدة للمجموعة الموحدة في بلد مختلف عن موقع الكيانات الأخرى في المجموعة الموحدة.

صافي مكسب الأصول: فيما يتعلق باختيار بموجب المادة 6.2.3، يعني صافي المكسب الناتج عن التصرف في الأصول المادية المحلية من قبل كيان عضو يقع في البلد الذي تم إجراء الاختيار بشأنه باستثناء المكسب أو الخسارة من نقل الأصول إلى عضو آخر في المجموعة.

صافي خسارة الأصول: فيما يتعلق بكيان عضو وسنة مالية، يعني صافي الخسارة الناتجة عن التصرف في الأصول المادية المحلية من قبل ذلك الكيان العضو في تلك السنة باستثناء المكسب أو الخسارة من نقل الأصول إلى عضو آخر في المجموعة. يجب تخفيض مبلغ صافي خسارة الأصول بمقدار صافي مكسب الأصول أو مكسب الأصول المعدل الذي يتم تسويته مقابل هذه الخسارة وفقاً لتطبيق المادة 6.2.3 (ب) أو (ج) نتيجة لاختيار سابق تم إجراؤه بموجب المادة 6.2.3.

صافي القيمة الدفترية للأصول المادية: يعني متوسط القيم الافتتاحية والختامية للأصول المادية بعد إدراج الاستهلاك التراكمي والاستنفاد وانخفاض القيمة كما هي مسجلة في القوائم المالية.

صافي دخل الركيزة الثانية لبلد: تم تعريفه في المادة 2.1.5.

صافي خسارة الركيزة الثانية: هو المبلغ الصفري أو السالب، إن وجد، محسوباً وفقاً للمعادلة الآتية:

صافي خسارة الركيزة الثانية = دخل الركيزة الثانية لجميع الكيانات الأعضاء – خسائر الركيزة الثانية لجميع الكيانات الأعضاء

لأغراض هذه المعادلة:

• (أ) يقصد بدخل الركيزة الثانية لجميع الكيانات الأعضاء: مجموع دخل الركيزة الثانية لجميع الكيانات الأعضاء الموجودة في الدولة، والمحدد وفقاً للمادة 3 عن السنة المالية.
• (ب) يقصد بخسائر الركيزة الثانية لجميع الكيانات الأعضاء: مجموع خسائر الركيزة الثانية لجميع الكيانات الأعضاء الموجودة في الدولة، والمحددة وفقاً للمادة 3 عن السنة المالية.

صافي نفقات الضرائب: يعني صافي كل مما يلي:

• (أ) أي ضرائب مشمولة مستحقة كنفقات وأي ضرائب مشمولة حالية ومؤجلة متضمنة في نفقات ضريبة الدخل، بما في ذلك الضرائب المشمولة على الدخل المستبعدة من حساب دخل أو خسارة الركيزة الثانية.
• (ب) أي أصل ضريبي مؤجل يعود إلى خسارة عن السنة المالية.
• (ج) أي حد أدنى لضريبة تكميلية محلية مؤهلة مستحقة كنفقات.
• (د) أي ضرائب تنشأ بمقتضى قاعدة تضمين دخل مؤهلة وقاعدة أرباح منخفضة الضريبة مؤهلة مستحقة كنفقات.
• (هـ) أي ضريبة إسناد قابلة للاسترداد غير مؤهلة مستحقة كنفقات.
• (و) الضرائب المستحقة على شركة التأمين فيما يتعلق بالعوائد المستحقة لحاملي بوليصات التأمين إلى الحد الذي تسري فيه المادة 9.2.3 على تلك الضرائب.

الرصيد الضريبي غير القابل للتسويق والقابل للنقل: يعني رصيداً ضريبياً، إذا كان محتفظاً به من قبل حامل الوثيقة، يكون قابلاً للنقل ولكنه ليس رصيداً ضريبياً قابلاً للتسويق والنقل، وإذا كان محتفظاً به من قبل المشتري، فلا يكون رصيداً ضريبياً قابلاً للتسويق والنقل.

المنظمة غير الربحية: تعني كياناً يستوفي جميع المعايير الآتية:

• (أ) تم تأسيسه وتشغيله في بلد إقامته:
  1. حصراً لأغراض دينية أو خيرية أو علمية أو فنية أو ثقافية أو رياضية أو تعليمية أو غيرها من الأغراض المماثلة، أو
  2. كمنظمة مهنية أو رابطة أعمال أو غرفة تجارة أو منظمة عمالية أو منظمة زراعية أو بستانية أو رابطة مدنية أو منظمة يتم تشغيلها حصرياً لتعزيز الرفاهية الاجتماعية.
• (ب) يكون الدخل المحقق من الأنشطة المذكورة في الفقرة (أ) معفى بشكل كبير من ضريبة الدخل في البلد الذي يقيم فيه.
• (ج) ليس فيه مساهمون أو أعضاء لهم مصلحة ملكية أو منفعة في دخله أو أصوله.
• (د) لا يجوز توزيع دخل أو أصول الكيان أو تخصيصها لصالح شخص من القطاع الخاص أو كيان ليس جهة خيرية باستثناء ما يلي:
  1. وفقاً لتسيير الأنشطة الخيرية للكيان.
  2. سداداً لمقابل معقول عن الخدمات المقدمة أو عن استخدام الممتلكات أو رأس المال.
  3. كدفعة تمثل القيمة السوقية العادلة للممتلكات التي اشتراها الكيان.
• (هـ) عند إنهاء الكيان أو تصفيته أو حله، يجب توزيع جميع أصوله أو إعادتها إلى منظمة غير ربحية أو إلى الحكومة (بما في ذلك أي كيان حكومي) في بلد إقامة الكيان أو أي قسم سياسي فرعي تابع له.

ولكنها لا تشمل أي كيان يمارس تجارة أو أعمالاً لا ترتبط مباشرة بالأغراض التي أُنشئ من أجلها.

الرصيد الضريبي القابل للاسترداد غير المؤهل: يعني الرصيد الضريبي الذي لا يكون رصيد ضريبي قابل للاسترداد مؤهل ولكنه قابل للاسترداد كلياً أو جزئياً.

المكسب أو الخسارة غير المؤهلة: يعني مكسب أو خسارة الكيان العضو المتصرف الناشئة فيما يتعلق بإعادة الهيكلة بموجب الركيزة الثانية التي تخضع للضريبة في موقع الكيان العضو المتصرف أو المكسب أو الخسارة وفق المحاسبة المالية الناشئة فيما يتعلق بإعادة الهيكلة بموجب الركيزة الثانية، أيهما أقل.

الاتفاقية الضريبية النموذجية لمنظمة التعاون الاقتصادي والتنمية: تعني الاتفاقية الضريبية النموذجية بشأن الدخل ورأس المال لمنظمة التعاون الاقتصادي والتنمية (2017): النسخة المختصرة لعام 2017.

الدخل الشامل الآخر: يعني بنود الدخل والنفقات التي لم يتم الاعتراف بها في الربح أو الخسارة كما هو مطلوب أو مسموح به بموجب المعيار المحاسبة المالية المعتمد المستخدم في القوائم المالية الموحدة. عادة يتم الإفصاح عن الدخل الشامل الآخر على أنه تعديل في حقوق الملكية في بيان المركز المالي (الميزانية العمومية).

حصص الملكية: تعني أي حقوق ملكية تتضمن حقاً في أرباح أو رأس مال أو احتياطيات كيان ما (بما في ذلك كيان شفاف مالياً)، بما في ذلك أرباح أو رأسمال أو احتياطيات منشأة (منشآت) دائمة عائدة لكيان رئيسي. لأغراض هذا التعريف تسري الأحكام الآتية:

• (أ) حقوق الملكية هي الحقوق التي يتم حسابها كحقوق ملكية بموجب معيار المحاسبة المالية المستخدم في إعداد القوائم المالية الموحدة للكيان الأم النهائي.
• (ب) عندما يتم إصدار أنواع مختلفة من حقوق الملكية من قبل كيان، تُعامل كل حقوق الملكية التي تحمل حقوقاً في الأرباح أو رأس المال أو الاحتياطيات بشكل متساوي، ما لم ينص هذا القرار على خلاف ذلك.

الكيان الأم: يعني الكيان الأم النهائي الذي لا يكون كياناً مستثنى أو كياناً أماً وسيطاً أو كياناً رئيسياً مملوك جزئياً.

الكيان الأم المملوك جزئياً: يعني كياناً عضواً (غير الكيان الأم النهائي أو المنشأة الدائمة أو الكيان الاستثماري) يستوفي كلاً مما يلي:

• (أ) أن يمتلك (بشكل مباشر أو غير مباشر) حصة ملكية في كيان عضو آخر في ذات مجموعة المؤسسات متعددة الجنسيات.
• (ب) أن يكون مملوك بأكثر من 20% من حقوق الملكية في أرباحه التي يُحتفظ بها بشكل مباشر أو غير مباشر من قبل أشخاص ليسوا كيانات أعضاء في مجموعة المؤسسات متعددة الجنسيات.

الدخل السلبي: يعني الدخل المتضمّن في دخل الركيزة الثانية وهو أي من الآتي:

• (أ) توزيعات أرباح أو ما يعادلها.
• (ب) فائدة أو ما يعادلها.
• (ج) إيجار.
• (د) اتاوة.
• (هـ) دخل ثابت سنوي.
• (و) صافي المكاسب من ممتلكات من النوع الذي ينتج الدخل المذكور في الفقرات من (أ) إلى (هـ).

ولكن فقط إلى الحد الذي يخضع فيه كيان عضو مالك للضريبة المفروضة على هذا الدخل بموجب نظام ضريبة الشركات الأجنبية المسيطر عليها أو نتيجة لحصة ملكية في كيان هجين.

صندوق المعاشات التقاعدية: يعني كلاً مما يلي:

• (أ) كيان يتم إنشاؤه وتشغيله في بلد بشكل حصري أو شبه حصري لإدارة أو تقديم استحقاقات المعاشات التقاعدية والمنافع المساندة أو العرضية للأفراد، ويستوفي أياً مما يلي:
  1. منظم على هذا النحو من قبل ذلك البلد أو أحد أقسامه السياسية الفرعية أو سلطاته المحلية.
  2. هذه المنافع مضمونة أو محمية بطريقة أخرى بموجب التشريعات المحلية وتُمول من خلال مجموعة من الأصول المحتفظ بها من خلال ترتيب ائتماني أو من خلال أمين لضمان الوفاء بالتزامات المعاشات التقاعدية المقابلة في حالة إعسار مجموعة المؤسسات متعددة الجنسيات.
• (ب) كيان خدمات المعاشات التقاعدية.

كيان خدمات المعاشات التقاعدية: يعني كياناً يتم تأسيسه وتشغيله بشكل حصري أو شبه حصري للغايات التالية:

• (أ) استثمار الأموال لصالح الكيانات المشار إليها في الفقرة (أ) من تعريف صندوق المعاشات التقاعدية.
• (ب) القيام بأنشطة تكون مساندة لتلك الأنشطة المنظمة التي تزاولها الكيانات المشار إليها في الفقرة (أ) من تعريف صندوق المعاشات التقاعدية شريطة أن تكون أعضاء في ذات المجموعة.

المنشأة الدائمة: تعني أياً مما يلي:

• (أ) مكان أعمال (بما في ذلك مكان أعمال اعتباري) يقع في بلد ويعامل كمنشأة دائمة وفقاً لاتفاقية ضريبية معمول بها شريطة أن يفرض هذا البلد ضريبة على الدخل العائد إليها وفقاً لحكم مماثل للمادة السابعة من الاتفاقية الضريبية النموذجية لمنظمة التعاون الاقتصادي والتنمية بشأن الدخل ورأس المال.
• (ب) في حال عدم وجود اتفاقية ضريبية سارية، مكان أعمال (بما في ذلك مكان أعمال اعتباري) تفرض بشأنه البلد بموجب قانونه المحلي ضريبة على الدخل العائد إلى مكان الأعمال هذا على أساس صاف مماثل للطريقة التي تفرض بها الضرائب على المقيمين الضريبيين فيها.
• (ج) إذا لم يكن لدى بلد نظام للضريبة على دخل الشركات، مكان أعمال (بما في ذلك مكان أعمال اعتباري) يقع في ذلك البلد ويعامل كمنشأة دائمة وفقاً للاتفاقية الضريبية النموذجية لمنظمة التعاون الاقتصادي والتنمية بشأن الدخل ورأس المال، شريطة أن يكون لهذا البلد الحق في فرض ضريبة على الدخل العائد إليه وفقاً للمادة السابعة من ذلك النموذج.
• (د) مكان أعمال (أو مكان أعمال اعتباري) لم يرد وصفه في الفقرات من (أ) إلى (ج) تتم من خلاله العمليات خارج البلد الذي يقع فيه الكيان شريطة أن يعفي هذا البلد الدخل العائد إلى هذه العمليات.

إطار تطبيق الركيزة الثانية: يعني الإجراءات التي يتم وضعها من قبل الإطار الشامل لمنظمة التعاون الاقتصادي والتنمية أو مجموعة العشرين بشأن تأكل الوعاء الضريبي ونقل الأرباح من أجل وضع قواعد إدارية وإرشادات وإجراءات من شأنها تسهيل التطبيق المنسق لقواعد الركيزة الثانية النموذجية.

دخل الركيزة الثانية لجميع الكيانات الأعضاء: تم تعريفه في الفقرة (أ) من المادة 2.1.5.

دخل أو خسارة الركيزة الثانية للكيان العضو: تم تعريفه في المادة 1.1.3.

إقرار معلومات الركيزة الثانية: يعني الإقرار الموحد الذي سيتم إعداده وفقاً لإطار تطبيق الركيزة الثانية والذي يحتوي على المعلومات المبينة في المادة 15.

خسارة الركيزة الثانية المؤجلة كأصل ضريبي: تم تعريفها في المادة 5.4.

اختيار خسارة الركيزة الثانية: تم تعريفه في المادة 1.5.4.

خسائر الركيزة الثانية لجميع الكيانات الأعضاء: تم تعريفها في المادة 2.1.5 (ب).

قواعد الركيزة الثانية النموذجية: تعني مجموعة القواعد النموذجية الواردة في المستند المعنون التحديات الضريبية الناشئة عن رقمنة الاقتصاد - القواعد العالمية النموذجية بشأن تأكل الوعاء الضريبي ونقل الأرباح (الركيزة الثانية) الصادرة عن منظمة التعاون الاقتصادي والتنمية في 20 ديسمبر 2021.

إعادة التنظيم بموجب الركيزة الثانية: تعني تحول أو نقل الأصول والالتزامات كما هو الحال في عملية اندماج أو انفصال أو تصفية أو معاملة مماثلة يتحقق بشأنها كل مما يلي:

• (أ) يكون مقابل النقل، كلياً أو جزئياً، حصص ملكية صادرة عن الكيان العضو المستحوذ أو عن طريق شخص مرتبط بالكيان العضو المستحوذ، أو في حالة التصفية، حقوق ملكية للمستهدف (أو في حال عدم تقديم أي مقابل، عندما لا يكون لإصدار حصة ملكية أي أهمية اقتصادية).
• (ب) لا يخضع مكسب أو خسارة الكيان العضو المتصرف في تلك الأصول للضريبة، كلياً أو جزئياً.
• (ج) القوانين الضريبية للبلد الذي يوجد فيه الكيان العضو المستحوذ تُلزم ذلك الكيان بحساب الدخل الخاضع للضريبة بعد التصرف أو الاستحواذ باستخدام المعاملة الضريبية للأصول للكيان العضو المتصرف، مع تسويته لأي مكسب أو خسارة غير مؤهلة ناشئة عن التصرف أو الاستحواذ.

لأغراض هذا التعريف، يقصد بالتحول التغيير في شكل الكيان ويتضمن مساهمة الأصول في رأس مال كيان قائم حيث لا يصدر الكيان حصص ملكية جديدة أو إضافية في مقابل الممتلكات المساهمة بها لأن المعاملة لا تؤدي إلى تغيير في الملكية النسبية للكيان.

إيرادات الركيزة الثانية: تم تعريفها في المادة 3.5.5 (أ) لأغراض المادة 2.5.5.

قواعد الركيزة الثانية: تعني قاعدة تضمين الدخل المؤهلة أو قاعدة أرباح منخفضة الضريبة المؤهلة أو حد الأدنى للضريبة التكميلية المحلية المؤهلة بما في ذلك الأحكام الواردة في هذا القرار.

النفقات غير المسموح بخصمها وفق السياسة: تعني كلاً مما يلي:

• (أ) النفقات المتكبدة من الكيان العضو نظير المدفوعات غير القانونية، بما في ذلك الرشوة وما في حكمها.
• (ب) النفقات المتكبدة من الكيان العضو مقابل الغرامات والعقوبات التي تساوي أو تجاوز 50,000 يورو (أو ما يعادلها بالعملة المستعملة التي تم بها حساب صافي دخل أو خسارة المحاسبة المالية للكيان العضو).

المساهمة في المحفظة: تعني حصص الملكية في كيان ما التي تمتلكها مجموعة المؤسسات متعددة الجنسيات والتي تحمل حقوقاً في الأرباح أو رأس المال أو الاحتياطيات أو حقوق التصويت في ذلك الكيان بنسبة أقل من 10% في تاريخ التوزيع أو التصرف، أو في حالة التغير في حركات القيمة العادلة، في نهاية السنة المالية.

أخطاء الفترات السابقة والتغييرات في المبادئ المحاسبية: تعني جميع التغييرات في حقوق الملكية الافتتاحية في بداية السنة المالية للكيان العضو والتي تعود إلى أي مما يلي:

• (أ) تصحيح خطأ في تحديد صافي الدخل وفق المحاسبة المالية في سنة مالية سابقة أثر على الدخل أو النفقات القابلة للتضمين في حساب دخل أو خسارة الركيزة الثانية عن تلك السنة المالية، فيما عدا إلى الحد الذي أدى فيه تصحيح هذا الخطأ إلى انخفاض جوهري في مبلغ ضريبي مستحق يتعلق بالضرائب المشمولة وفقاً للمادة 6.4.
• (ب) تغيير في المبدأ أو السياسة المحاسبية يؤثر على الدخل أو النفقات التي يمكن تضمينها في حساب دخل أو خسارة الركيزة الثانية.

دخل الشحن الدولي المساند المؤهل: تم تعريفه في المادة 3.3.3.

إعفاء الدين المؤهل: يعني إعفاء من دين يتم وفقاً لأي من الإجراءات الآتية:

• (أ) إجراء تم اتخاذه بموجب إجراءات الإعسار أو الإفلاس المنصوص عليها في القانون المحلي الذي يستوفي أياً مما يلي:
  1. تشرف عليه محكمة أو هيئة قضائية أخرى في البلد المعني.
  2. يتم بموجبه تعيين أمين تفليسة مستقل.
• (ب) وفقاً لترتيب مع دائن واحد أو أكثر ليس له علاقة وثيقة بالمدين ويكون من المعقول افتراض، بناءً على رأي طرف مستقل مؤهل، أن المدين سيصبح مفلساً في غضون (12) اثني عشر شهراً من تاريخ الإعفاء في حال عدم إعفاء الديون المستحقة لدائنين غير متصلين بشكل وثيق بموجب الترتيب.
• (ج) في حال عدم تطبيق الفقرتين (أ) أو (ب) أعلاه وجاوزت التزامات المدين القيمة السوقية العادلة لأصوله المحددة مباشرة قبل إعفاء الدين المبلغ المستحق على المدين لدائن غير وثيق الصلة بقدر الأقل مما يلي:
  1. الزيادة في التزامات المدين عن القيمة السوقية العادلة لأصوله التي تم تحديدها مباشرة قبل إعفاء الدين.
  2. الانخفاض في خصائص الضريبية للمدين بموجب قوانين الضرائب في البد الذي يوجد فيه المدين نتيجة لإعفاء الدين.

لأغراض هذا التعريف، يقصد بالدائن الذي له علاقة وثيقة بالمدين إذا كان أي منهما، بناءً على جميع الحقائق والظروف ذات الصلة، يسيطر على الآخر أو كان كلاهما تحت سيطرة ذات الأشخاص أو الشركات. في كل الأحوال، يعتبر أياً من الدائن أو المدين لديه علاقة وثيقة بالآخر إذا كان أحدهما يمتلك بشكل مباشر أو غير مباشر أكثر من 50% من حصة الملكية في الآخر (أو في حالة الشركة، أكثر من 50% من إجمالي حقوق التصويت وقيمة حصص الشركة أو حقوق الملكية الانتفاعية في الشركة) أو إذا كان شخصاً أو مؤسسة أخرى تمتلك بشكل مباشر أو غير مباشر أكثر من 50% من حصة الملكية (أو في حالة الشركة، أكثر من 50% من إجمالي حقوق التصويت وقيمة حصص الشركة أو حقوق الملكية الانتفاعية في الشركة) في الدائن والمدين.

الحد الأدنى للضريبة التكميلية المحلية المؤهلة: تعني ضريبة بموجب قانون بلد تعد ضريبة تكميلية محلية مؤهلة للسنة المالية من قبل الإطار الشامل لمنظمة التعاون الاقتصادي والتنمية أو مجموعة العشرين بشأن تأكل الوعاء الضريبي ونقل الأرباح المنشور على الموقع الإلكتروني لمنظمة التعاون الاقتصادي والتنمية وفقاً لتعريف الضريبة التكميلية المحلية المؤهلة الوارد في المادة 1.10 من قواعد الركيزة الثانية النموذجية.

قاعدة تضمين الدخل المؤهلة: تعني مجموعة من قواعد معادلة لتلك الواردة في المواد من 1.2 إلى 3.2 من قواعد الركيزة الثانية النموذجية التي تعد قواعد مؤهلة للسنة المالية على النحو المحدد من قبل الإطار الشامل لمنظمة التعاون الاقتصادي والتنمية أو مجموعة العشرين بشأن تأكل الوعاء الضريبي ونقل الأرباح والمنشور على الموقع الإلكتروني لمنظمة التعاون الاقتصادي والتنمية وفقاً لتعريف قاعدة تضمين الدخل المؤهلة الوارد في المادة 1.10 من قواعد الركيزة الثانية النموذجية.

ضريبة الإسناد المؤهلة: تعني الضريبة المشمولة المستحقة أو المدفوعة من قبل كيان عضو والتي تكون قابلة للاسترداد أو قابلة لتكون رصيداً للمالك المستفيد من توزيعات أرباح موزعة من قبل هذا الكيان العضو (أو حصة أرباح موزعة من قبل الكيان الرئيسي، وذلك في حالة الضريبة المشمولة المستحقة أو المدفوعة من قبل منشأة دائمة) إلى الحد الذي يكون فيه المبلغ المسترد مستحق الدفع، أو يتم توفير الرصيد:

• (أ) من قبل بلد آخر غير البلد الذي فرض الضرائب المشمولة بموجب نظام رصيد ضريبي أجنبي.
• (ب) إلى مالك مستفيد من توزيعات أرباح خاضعة للضريبة بنسبة اسمية تساوي أو تُجاوز الحد الأدنى للضريبة على توزيعات الأرباح على أساس حالي بموجب القانون المحلي للبلد الذي فرض الضرائب المشمولة على الكيان العضو.
• (ج) إلى مالك مستفيد فرد من توزيعات الأرباح يكون مقيماً ضريبياً في البلد الذي فرض الضرائب المشمولة على الكيان العضو والذي يخضع للضريبة على توزيعات الأرباح كدخل عادي.
• (د) إلى كيان حكومي أو منظمة دولية أو منظمة مقيمة غير ربحية أو صندوق معاشات تقاعدية مقيم أو كيان استثماري مقيم لا يكون كياناً ضمن مجموعة أو شركة تأمين على الحياة مقيمة إلى الحد الذي يتم فيه استلام توزيعات الأرباح فيما يتعلق بأعمال صندوق معاشات تقاعدية وتخضع للضريبة بطريقة مماثلة كتوزيعات أرباح يتلقاها صندوق معاشات تقاعدية.

لأغراض الفقرة (د)، تكون المنظمة غير الربحية أو صندوق المعاشات التقاعدية مقيماً في بلد إذا تم إنشاؤها وإدارتها في ذلك البلد، ويكون الكيان الاستثماري مقيماً في بلد إذا تم إنشاؤه وتنظيمه في هذا البلد. وتكون شركة التأمين على الحياة مقيمة في البلد الذي توجد فيه.

حصة الملكية المؤهلة: تعني كلاً مما يلي:

• (أ) استثماراً في كيان شفاف ضريبياً يستوفي كلاً مما يلي:
  1. يتم التعامل معه كحصة ملكية لأغراض الضريبة المحلية.
  2. يتم التعامل معه كحصة ملكية بموجب معيار المحاسبة المالية المعتمد في البلد الذي يعمل فيه الكيان الشفاف ضريبياً، حيث لا يتم توحيد الأصول والخصوم والدخل والنفقات والتدفقات النقدية للكيان الشفاف ضريبياً على أساس كل بند على حدة في القوائم المالية الموحدة للكيان الأم النهائي.
• (ب) من المتوقع أن يكون العائد الإجمالي فيما يتعلق بهذا الاستثمار (بما في ذلك التوزيعات ومزايا الخسائر الضريبية والأرصدة الضريبية القابلة للاسترداد المؤهلة المحققة عبر الكيان الشفاف ضريبياً، ولكن باستثناء الأرصدة الضريبية التي لا تكون أرصدة ضريبية قابلة للاسترداد مؤهلة) أقل من المبلغ الإجمالي الذي استثمره المستثمر بحيث يتم رد جزء من الاستثمار في شكل أرصدة ضريبية لا تكون أرصدة ضريبية قابلة للاسترداد مؤهلة (بغض النظر عما إذا كان من المتوقع تحويل هذه الأرصدة الضريبية أو استخدامها لتخفيض المبلغ المستحق على المستثمر المتعلق بالضريبة المشمولة).

لأغراض الفقرة (ب)، يتم تحديد العائد الإجمالي المتوقع في وقت الدخول في الاستثمار واستناداً إلى الحقائق والظروف، بما في ذلك شروط الاستثمار.

لا يُعتبر الاستثمار حصة ملكية مؤهلة ما لم يستوف أياً مما يلي:

• (أ) أن يكون للمستثمر مصلحة اقتصادية حقيقية في الكيان الشفاف ضريبياً ولا يكون محمياً من خسارة استثماره.
• (ب) في حال سمح البلد فقط بنقل منافع الأرصدة الضريبية من خلال هذه الحصص، عندما يكون المطور أو المستثمر خاضعاً لقواعد الركيزة الثانية النموذجية.

الرصيد الضريبي القابل للاسترداد المؤهل: يعني رصيداً ضريبياً قابلاً للاسترداد مصمماً بحيث يتعين سداده نقداً أو إتاحته كمعادل نقدي في غضون أربع سنوات من استيفاء كيان عضو لشروط تلقي الرصيد بموجب قوانين البلد الذي يمنح الرصيد. الرصيد الضريبي القابل للاسترداد جزئياً هو رصيد ضريبي قابل للاسترداد مؤهل إلى الحد الذي يجب سداده نقداً أو يُتاح كمعادل نقدي في غضون أربع سنوات من وقت استيفاء الكيان العضو لشروط تلقي الرصيد بموجب قوانين البلد الذي يمنح الرصيد. لا يتضمن الرصيد الضريبي القابل للاسترداد المؤهل أي مبلغ ضريبي قابل لأن يصبح رصيداً أو قابلاً للاسترداد وفقاً لضريبة إسناد مؤهلة أو ضريبة إسناد قابلة للاسترداد غير مؤهلة.

قاعدة الأرباح منخفضة الضريبة المؤهلة: تعني مجموعة قواعد معادلة للمادة 4.2 إلى المادة 6.2 من قواعد الركيزة الثانية النموذجية التي تعد قواعد مؤهلة للسنة المالية من قبل الإطار الشامل لمنظمة التعاون الاقتصادي والتنمية أو مجموعة العشرين بشأن تأكل الوعاء الضريبي ونقل الأرباح والمنشور على الموقع الإلكتروني لمنظمة التعاون الاقتصادي والتنمية وفقاً لتعريف قاعدة الأرباح منخفضة الضريبة المؤهلة الوارد في المادة 1.10 من قواعد الركيزة الثانية النموذجية.

الميزة الضريبية المتدفقة المؤهلة: تعني ميزة ضريبية تدفقت من خلال حصة ملكية مؤهلة تعود إلى الآتي:

• (أ) رصيد ضريبي لا يكون رصيداً ضريبياً مؤهلاً قابلاً للاسترداد.
• (ب) خسارة ضريبية قابلة للخصم.

اتفاقية السلطة المختصة المؤهلة: تعني اتفاقية أو ترتيباً ثنائياً أو متعدد الأطراف بين سلطات مختصة ينص على التبادل التلقائي لإقرار المعلومات السنوي للركيزة الثانية.

أداة الاستثمار العقاري: تعني الكيان الذي تُحقق ضرائبه مستوى واحداً من الضرائب إما في وعائه الضريبي أو في الوعاء الضريبي لأصحاب الحصص فيه (مع تأجيل لمدة سنة واحدة على الأكثر)، شريطة أن يكون هذا الكيان يمتلك في الغالب ممتلكات غير منقولة وأن يكون هو ذاته مملوكاً من عدد كبير من المساهمين. تتم معاملة الأداة المحايدة ضريبياً التي تحتفظ بحصة ملكية في أداة استثمار عقاري على أنها تخضع لمستوى واحد من الضرائب.

الالتزام الضريبي المؤجل المستعاد: تم تعريفه في المادة 4.4.4.

استعادة الاستحقاق المستثنى: تم تعريفها في المادة 5.4.4.

تخفيضات الضرائب المشمولة: تم تعريفها في المادة 3.1.4.

السنة المالية الخاضعة للإبلاغ: تعني السنة المالية موضوع "إقرار معلومات الركيزة الثانية" أو "إقرار الضريبة التكميلية".

رأس المال المقيد من المستوى الأول: يعني أداة صادرة عن كيان عضو وفقاً لمتطلبات تنظيمية احترازية معمولة بها في قطاع التأمين والتي تكون قابلة للتحويل إلى حقوق ملكية أو تخفيض قيمتها إذا وقع حدث محدد مسبقاً والتي تحتوي على خصائص أخرى مصممة للمساعدة في استيعاب الخسائر في حالة حدوث أزمة مالية.

المساهمة قصيرة الأجل في محفظة: تعني المساهمة في المحفظة التي يتم الاحتفاظ بها اقتصادياً من قبل الكيان العضو الذي يتلقى أو يستحق توزيعات الأرباح أو التوزيعات الأخرى لمدة تقل عن سنة واحدة في تاريخ التوزيع.

الهيكل المتشابك: يعني ترتيباً يتم إبرامه من قبل كيانين أو أكثر من الكيانات الأم النهائية لمجموعات منفصلة، والذي يتحقق بموجبه كل مما يلي:

• (أ) 50% أو أكثر من حصص الملكية في الكيانات الأم النهائية للمجموعات المنفصلة ترجع إلى شكل الملكية أو القيود المفروضة على النقل أو غيرها من الشروط أو الأحكام مجتمعة مع بعضها بعضاً، ولا يمكن نقلها أو تداولها بشكل مستقل. وإذا تم إدراج حصص الملكية المجمعة، يتم تسعيرها بسعر واحد.
• (ب) يقوم واحد من هذه الكيانات الأم النهائية بإعداد قوائم مالية موحدة يتم فيها عرض الأصول والالتزامات والدخل والنفقات والتدفقات النقدية لجميع كيانات المجموعات معاً على أنها وحدة اقتصادية واحدة والتي تشترط قواعد تنظيمية أن يتم تدقيقها خارجياً.

الكيان العضو بلا بلد: يعني الكيان العضو المحدد في المادتين 2.3.18 (ب) و 3.3.18 (د).

استبعاد الدخل القائم على وجود واقعي وكاف: تم تعريفه في المادة 3.5.

الخسارة البديلة المرحلة لأصول ضريبية مؤجلة: تعني أصلاً ضريبياً مؤجلاً يتحقق من أي مما يلي:

• (أ) رصيد ضريبي أجنبي شريطة استيفاء جميع الشروط التالية:
  1. يتطلب البلد أن يخصم الدخل الناشئ في بلد أجنبي من خسائر ناشئة في البلد قبل خصم الأرصدة الضريبية الأجنبية من الضريبة المفروضة على الدخل الناشئ في بلد أجنبي.
  2. لدى الكيان العضو خسارة ضريبية محلية يتم خصمها كلياً أو جزئياً عن طريق الدخل الناشئ في بلد أجنبي.
  3. يسمح النظام الضريبي المحلي باستخدام أرصدة ضريبية أجنبية لخصم التزام ضريبي في سنة لاحقة فيما يتعلق بالدخل المتضمن في حساب دخل أو خسارة الركيزة الثانية للكيان العضو.
• (ب) آلية استرداد الخسارة المعمول بها في نظام ضريبة الشركات الأجنبية المسيطر عليها والتي تستوفي كلاً مما يلي:
  1. توفر نتيجة مكافئة أو أقل من النتيجة الواردة في الفقرة (أ) من هذا التعريف.
  2. تسمح أيضاً بالأرصدة الضريبية الأجنبية الزائدة التي تنشأ في سنة لاحقة لخصم الالتزام الضريبي المحلي من الدخل الناشئ في البلد والذي تمت إعادة تحديد مصدره كدخل ناشئ في بلد أجنبي.

الضريبة: تعني السداد الإلزامي بدون مقابل للحكومة العامة.

طريقة التوزيع الخاضعة للضريبة: تم تعريفها في المادة 2.4.7.

الاتفاقية الضريبية: تعني اتفاقية لتجنب الازدواج الضريبي فيما يتعلق بالضرائب على الدخل وعلى رأس المال.

سنة الاختبار: تم تعريفها في المادة 5.4.7.

فترة الاختبار: تم تعريفها في المادة 5.4.7.

الضريبة التكميلية: تعني الضريبة التكميلية المحسوبة للدولة أو البلد أو الكيان العضو وفقاً للمادة 2.5 حسبما يقتضي سياق النص.

إقرار الضريبة التكميلية: يعني الإقرار المشار إليه في المادة 1.8.

النسبة المئوية للضريبة التكميلية: تم تعريفها في المادة 1.2.5.

إجمالي المبلغ الضريبي المعدل المؤجل: تم تعريفه في المادة 1.4.4.

السنة الانتقالية بالنسبة لبلد: تعني السنة المالية الأولى التي تدخل فيها مجموعة المؤسسات متعددة الجنسيات ضمن نطاق قاعدة تضمين دخل مؤهلة أو قاعدة أرباح منخفضة الضريبة مؤهلة فيما يتعلق بهذا البلد أو الضريبة التكميلية بموجب هذا القرار.

الكيان الأم النهائي: تم تعريفه في المادة 4.1.

صافي دخل الركيزة الثانية غير الموزع: تم تعريفه في المادة 3.4.7.

بلد الكيان الأم النهائي: يعني البلد الذي يوجد فيه الكيان الأم النهائي.

قاعدة الأرباح منخفضة الضريبة: تعني قواعد بلد تكون معادلة للمادة 4.2 إلى المادة 6.2 من قواعد الركيزة الثانية النموذجية.

بلد يطبق قاعدة الأرباح منخفضة الضريبة: يعني البلد الذي يُطبق قاعدة أرباح منخفضة الضريبة مؤهلة ونافذة.

مبلغ الضريبة التكميلية بموجب قاعدة الأرباح منخفضة الضريبة: يعني مبلغ الضريبة التكميلية المخصص لبلد يُطبق قاعدة الأرباح منخفضة الضريبة بموجب قاعدة الأرباح منخفضة الضريبة.

18 -2 تعريفات الكيان الشفاف مالياً والكيان الشفاف ضريبياً والكيان الهجين العكسي والكيان الهجين

18 -1-2 يكون الكيان كياناً شفافاً مالياً بالقدر الذي يتسم فيه بالشفافية المالية فيما يتعلق بدخله أو نفقاته أو أرباحه أو خسائره في البلد الذي تم إنشاؤه فيه ما لم يكن مقيماً ضريبياً ويخضع لضريبة مشمولة على دخله أو أرباحه في بلد آخر.

• (أ) الكيان الشفاف مالياً هو كيان شفاف ضريبياً فيما يتعلق بدخله أو نفقاته أو أرباحه أو خسائره إلى الحد الذي يكون فيه شفافاً مالياً في البلد الذي يوجد فيه مالك الكيان.
• (ب) الكيان الشفاف مالياً هو كيان هجين عكسي فيما يتعلق بدخله أو نفقاته أو أرباحه أو خسائره إلى الحد الذي لا يكون فيه شفافاً مالياً في البلد الذي يوجد فيه المالك.

18 -2-2 يُعامل كيان على أنه شفاف مالياً بموجب قوانين دولة ما، إذا كانت ذلك البلد يُعامل دخل أو نفقات أو أرباح أو خسائر ذلك الكيان كما لو كانت محققة أو متكبدة من قبل المالك المباشر لذلك الكيان تناسبياً مع حصته في ذلك الكيان.

18 -3-2 تُعامل حصة الملكية في كيان أو منشأة دائمة تكون كياناً عضواً على أنها مملوكة من خلال هيكل شفاف ضريبياً إذا كانت حصة الملكية تلك مملوكة بشكل غير مباشر من خلال سلسلة من الكيانات الشفافة ضريبياً.

18 -4-2 يُعامل الكيان العضو الذي لا يكون مقيماً ضريبياً ولا يخضع لضريبة مشمولة أو لحد أدنى لضريبة تكميلية محلية مؤهلة بناءً على موقع إدارته أو موقع إنشائه أو معايير مماثلة، على أنه كيان شفاف مالياً وكيان شفاف ضريبياً فيما يتعلق بدخله أو نفقاته أو أرباحه أو خسائره إلى الحد الذي يستوفي كل مما يلي:

• (أ) يكون مالكوه موجودين في بلد يُعامل الكيان على أنه شفاف مالياً.
• (ب) ليس له مكان عمل في البلد الذي أنشئ فيها.
• (ج) ألا يكون الدخل أو النفقات أو الأرباح أو الخسائر عائداً إلى منشأة دائمة.

18 -5-2 الكيان الذي يُعامل على أنه شخص منفصل خاضع للضريبة لأغراض ضريبة الدخل في البلد الذي يوجد فيه هو كيان هجين فيما يتعلق بدخله أو نفقاته أو أرباحه أو خسائره إلى الحد الذي يكون فيه شفافاً مالياً في البلد الذي يوجد فيه مالك الكيان.

18 -3 موقع الكيان والمنشأة الدائمة

18 -1-3 يتم تحديد موقع الكيان الذي لا يكون كياناً شفافاً مالياً على النحو الآتي:

• (أ) إذا كان مقيماً ضريبياً في بلد بناءً على موقع إدارته أو موقع إنشائه أو معايير مماثلة، فإن موقعه يكون في هذا البلد.
• (ب) في الحالات الأخرى، فإن موقعه يكون في البلد الذي أُنشئ فيه.

18 -2-3 يتم تحديد موقع الكيان الذي يكون كياناً شفافاً مالياً على النحو الآتي:

• (أ) إذا كان الكيان الأم النهائي لمجموعة المؤسسات متعددة الجنسيات أو كان مطلوباً منه تطبيق قاعدة تضمين الدخل وفقاً لحكم مكافئ للمادة 1.2 من قواعد الركيزة الثانية النموذجية، فإنه يقع في البلد الذي تم إنشاؤه فيه.
• (ب) في الحالات الأخرى، يعامل على أنه كيان عضو بلا بلد.

18 -3-3 يُحدد موقع منشأة دائمة على النحو الآتي:

• (أ) إذا تم تحديدها في الفقرة (أ) من التعريف الوارد في المادة 1.18، فإن موقعها يكون في البلد الذي يُعامل فيه كمنشأة دائمة وتخضع للضريبة بموجب الاتفاقية الضريبية المعمول بها.
• (ب) إذا تم تحديدها في الفقرة (ب) من التعريف الوارد في المادة 1.18، فإن موقعها يكون في البلد الذي تخضع فيه لأساس ضريبي صاف بناءً على تواجد أعمالها.
• (ج) إذا تم تحديدها في الفقرة (ج) من التعريف الوارد في المادة 1.18، فإن موقعها يكون في البلد الذي توجد فيه.
• (د) إذا تم تحديدها في الفقرة (د) من التعريف الوارد في المادة 1.18، فإنها تعتبر منشأة دائمة بلا بلد.

18 -4-3 عندما يكون موقع كيان عضو في أكثر من بلد (كيان يقع في بلدين)، بسبب المادة 1.3.18، يُحدد وضعه عندئذ للسنة المالية لأغراض هذا القرار على النحو الآتي:

• (أ) إذا كان يوجد في بلدين لديهما اتفاقية ضريبية نافذة يطبق الآتي:
  1. يكون موجوداً في البلد الذي يعتبر فيه مقيماً لأغراض الاتفاقية الضريبية.
  2. إذا كانت الاتفاقية الضريبية تتطلب من السلطات المختصة التوصل إلى اتفاق متبادل بشأن الإقامة الاعتبارية للكيان العضو لأغراض الاتفاقية الضريبية ولم يكن هناك اتفاق، فحينئذ، تسري الفقرة (ب).
  3. إذا كانت الاتفاقية الضريبية لا توفر تسهيلاً أو إعفاءً من الضريبة لأن الكيان العضو مقيم ضريبياً لدى الطرفين المتعاقدين، فحينئذ، تسري الفقرة (ب).
• (ب) إذا لم تسري أي اتفاقية ضريبية، يُحدد موقعه عندئذ على النحو الآتي:
  1. يكون موقعه في البلد الذي سدد فيه المبلغ الأكبر من الضرائب المشمولة عن السنة المالية، دون النظر إلى الضرائب المدفوعة وفقاً لنظام ضريبة الشركات الأجنبية المسيطر عليها.
  2. إذا كان مبلغ الضرائب المشمولة المدفوعة في كل البلدان متساوياً أو صفراً، فإنه يكون موجوداً في البلد الذي يوجد به مقدار أكبر من استبعاد الدخل القائم على وجود واقعي وكاف محسوباً على أساس الكيان وفقاً للمادة 3.5.
  3. إذا كان مبلغ استبعاد الدخل القائم على وجود واقعي وكاف في كل البلدان متساوياً أو صفراً، فعندئذ يعتبر كياناً عضواً بلا بلد لم يكن الكيان الأم النهائي لمجموعة المؤسسات متعددة الجنسيات وفي هذه الحالة يعتبر موجوداً في البلد الذي تم إنشاؤه فيه.

18 -5-3 إذ كان الكيان الذي يقع في بلدين، وفقاً للمادة 4.3.18، هو كيان أم موجود في بلد لا يخضع فيه لقاعدة تضمين الدخل المؤهلة، فيمكن حينها للبلد الآخر أن يطلب من هذا الكيان تطبيق قاعدة تضمين الدخل المؤهلة الخاصة به ما لم تكن مقيدة باتفاقية ضريبية معمول بها.

18 -6-3 في حال قيام الكيان بتغيير موقعه خلال السنة المالية، فإنه يكون موقعه في البلد الذي كان يوجد فيه في بداية تلك السنة.

Cases, Provisions, Conditions, Rules, Controls, and Procedures
on the Imposition of Top-up Tax on Multinational Enterprises

Attached to Cabinet Decision No (142) of 2024

Article 1

Scope of Application

Article 1.1. Scope of this Decision

1.1.1 This Decision shall apply to Constituent Entities that are members of an MNE Group that has annual revenue of EUR 750 million or more in the Consolidated Financial Statements of the Ultimate Parent Entity in at least two of the four Fiscal Years immediately preceding the tested Fiscal Year. Further rules are set out in Article 6.1 which modify the application of the consolidated revenue threshold in certain cases.

1.1.2 If one or more of the Fiscal Years of the MNE Group taken into account for purposes of Article 1.1.1 is of a period other than 12 months, for each of those Fiscal Years the EUR 750 million threshold is adjusted proportionally to correspond with the length of the relevant Fiscal Year.

Article 1.2. MNE Group and Group

1.2.1 An MNE Group means any Group that includes at least one Entity or Permanent Establishment that is not located in the Jurisdiction in which the Ultimate Parent Entity of the MNE Group is located.

1.2.2 A Group means a collection of Entities that are related through ownership or control such that the assets, liabilities, income, expenses and cash flows of those Entities:

• (a) are included in the Consolidated Financial Statements of the Ultimate Parent Entity; or
• (b) are excluded from the Consolidated Financial Statements of the Ultimate Parent Entity solely on size or materiality grounds, or on the grounds that the Entity is held for sale.

1.2.3 A Group also means an Entity that is located in one Jurisdiction and has one or more Permanent Establishments located in other Jurisdictions provided that the Entity is not a part of another Group described in Article 1.2.2.

Article 1.3. Constituent Entity

1.3.1 A Constituent Entity is any of the following:

• (a) any Entity that is included in a Group; or
• (b) any Permanent Establishment of a Main Entity that is within paragraph (a).

1.3.2 A Permanent Establishment that is a Constituent Entity under paragraph (b) above shall be treated as separate from the Main Entity and any other Permanent Establishment of that Main Entity.

1.3.3 A Constituent Entity does not include an Entity that is an Excluded Entity.

Article 1.4. Ultimate Parent Entity

1.4.1 Ultimate Parent Entity means either:

• (a) an Entity that:
  1. owns directly or indirectly a Controlling Interest in any other Entity; and
  2. is not owned, with a Controlling Interest, directly or indirectly by another Entity; or
• (b) the Main Entity of a Group that is within Article 1.2.3.

Article 1.5. Excluded Entity

1.5.1 An Excluded Entity is an Entity that is:

• (a) a Governmental Entity;
• (b) an International Organisation;
• (c) a Non-profit Organisation;
• (d) a Pension Fund;
• (e) an Investment Fund that is an Ultimate Parent Entity; or
• (f) a Real Estate Investment Vehicle that is an Ultimate Parent Entity.

1.5.2 An Excluded Entity is also an Entity:

• (a) where at least 95% of the value of the Entity is owned (directly or through a chain of Excluded Entities) by one or more Excluded Entities referred to in Article 1.5.1 (other than a Pension Services Entity) and where that Entity:
  1. operates exclusively or almost exclusively to hold assets or invest funds for the benefit of the Excluded Entity or Entities; and/or
  2. only carries out activities that are ancillary to those carried out by the Excluded Entity or Entities.
• (b) where at least 85% of the value of the Entity is owned (directly or through a chain of Excluded Entities), by one or more Excluded Entities referred to in Article 1.5.1 (other than a Pension Services Entity) provided that substantially all of the Entity's income is Excluded Dividends or Excluded Equity Gain or Loss that is excluded from the computation of Pillar Two Income or Loss in accordance with Articles 3.2.1(b) or (c).

1.5.3 A Filing Constituent Entity may elect not to treat an Entity as an Excluded Entity under Articles 1.5.2 and 1.9. An election under this Article is a Five-Year Election.

Article 1.6 Sovereign Wealth Funds

1.6.1 Notwithstanding Article 1.4, a sovereign wealth fund that meets the definition of a Governmental Entity is not an Ultimate Parent Entity.

1.6.2 Where the sovereign wealth fund described in Article 1.6.1 holds a direct Controlling Interest in an Entity, such Entity will be considered as the Ultimate Parent Entity of a Group provided that it:

• (a) owns directly or indirectly a Controlling Interest in another Entity, or

(b) is a Main Entity located in one Jurisdiction with one or more Permanent Establishments located in other Jurisdictions provided that the Main Entity is not a part of another Group described in Articles 1.2.2 or 1.6.2(a).

1.6.3 For the purposes of Article 1.6.2 and notwithstanding Article 1.2.2., a Group means the Ultimate Parent Entity referred to in Article 1.6.2 and:

(a) the Entities and Permanent Establishments referred to in Article 1.6.2(a) or (b); and

(b) the Entities that would have been excluded solely on size, materiality grounds or on the grounds that the Entity is held for sale if the Ultimate Parent Entity referred to in Article 1.6.2 would have been required to prepare Consolidated Financial Statements.

Article 1.7. Permanent Establishments of Excluded Entities

1.7.1 Where a Main Entity is an Excluded Entity in accordance with Article 1.5.1, its Permanent Establishments will also be treated as Excluded Entities.

1.7.2 For purposes of Article 1.5.2, the activities undertaken by the Permanent Establishments of a Main Entity shall be considered for purposes of determining whether the Main Entity meets the requirements in subparagraphs (i) or (ii) of Article 1.5.2(a), or Article 1.5.2(b). Where the requirements are met, the Permanent Establishments of the Main Entity will also be considered as Excluded Entities in accordance with Article 1.5.2.

Article 1.8 Excluded Entity held by an Investment Fund or a Real Estate Investment Vehicle that is not a Group Entity

1.8.1 For purposes of Article 1.5.2, the condition that requires a Group Entity to be owned (directly or through a chain of Excluded Entities) by one or more Excluded Entities referred to in Article 1.5.1 is deemed to be met where the first-mentioned Entity is held by an Investment Fund or a Real Estate Investment Vehicle that is not a Group Entity.

Article 1.9. Entities held by Non-profit Organisations

1.9.1 An Entity will be treated as an Excluded Entity provided that the following conditions are met:

(a) 100% of its value is owned directly or indirectly by one or more Non-profit Organisations;

(b) the aggregate revenue of the Group of which the Entity is a member is less than EUR 750 million if the revenue of the Non-profit Organisations and Excluded Entities under Article 1.5.2 were ignored; and

(c) the revenue of the Entity and all other Entities that are not Non-Profit Organizations and are not Excluded Entities under Article 1.5.2 is less than 25% of the revenue of the MNE Group.

1.9.2 Where the Fiscal Year of the MNE Group is a period other than 12 months, the computation under Article 1.9.1 (b) shall be adjusted in accordance with Article 1.1.2.

Article 2

Charging Provision

2.1 The following Entities shall pay the Top-up Tax for a Fiscal Year:

(a) Constituent Entities located in the UAE during that Fiscal Year, including those that are members of a Minority-owned Subgroup.

(b) Joint Ventures and JV Subsidiaries located in the UAE during that Fiscal Year;

(c) Stateless Constituent Entities created in accordance with the laws of the UAE and that are Reverse Hybrid Entities, with respect to any of their Pillar Two Income or Loss as allocated and computed in accordance with this Decision.

2.2 Notwithstanding Article 2.1:

(a) the Constituent Entities of the Domestic Main Group and a Domestic Minority-owned Subgroup, may appoint a Domestic Designated Filing Entity to pay the Top-up Tax on behalf of the members of their Domestic Groups;

(b) the Joint Venture and JV Subsidiaries of a Domestic JV Group may appoint a Domestic Designated Filing Entity to pay the Top-up Tax on behalf of the members of their Domestic JV Group; and

(c) the Reverse Hybrid Entities referred to in Article 2.1 (c), may appoint a Domestic Designated Filing Entity that is a member of the Domestic Main Group or Domestic Minority-owned Subgroup to pay its Top-up Tax.

2.3 An Investment Entity located in the UAE is not subject to the Top-up Tax.

Article 3

Computation of Pillar Two Income or Loss

Article 3.1. Financial Accounts for the Determination of the Pillar Two Income or Loss

3.1.1 The Pillar Two Income or Loss of each Constituent Entity is the Financial Accounting Net Income or Loss determined for the Constituent Entity for the Fiscal Year adjusted for the items described in Article 3.2 to Article 3.5.

3.1.2 The Financial Accounting Net Income or Loss of a Constituent Entity for the Fiscal Year shall be determined in accordance with its standalone financial statements prepared in accordance with IFRS where:

(a) all of the Constituent Entities located in the UAE are required to prepare standalone financial statements in accordance with Federal Decree-Law No. 47 of 2022 or the applicable laws of the UAE;

(b) all of the standalone financial statements of the Constituent Entities located in the UAE are prepared in accordance with IFRS; and

(c) the financial year of all of the separate financial statements of the Constituent Entities located in the UAE is the same as the Fiscal Year of the Consolidated Financial Statements of the Ultimate Parent Entity.

3.1.3 Where the conditions of Article 3.1.2 are not met, the Financial Accounting Net Income or Loss is the net income or loss determined for a Constituent Entity in preparing Consolidated Financial Statements of the Ultimate Parent Entity and shall not include consolidation adjustments attributable to:

(a) intragroup transactions unless Article 3.2.8 applies;

(b) purchase price allocation where a Group Entity acquires a Controlling Interest in an Entity as a result of a business combination, unless the following conditions are satisfied:

i. the acquisition date is prior to 1 December 2021; and

ii. the MNE Group does not have sufficient records to determine its Financial Accounting Net Income or Loss based on the unadjusted carrying values of the acquired assets and liabilities.

The Financial Accounting Net Income or Loss shall include other consolidation adjustments not referred to in paragraphs (a) and (b) that are reflected in the Financial Accounting Net Income or Loss to the extent they can reliably and consistently be traced to the relevant Entity.

3.1.4 If it is not reasonably practicable to determine the Financial Accounting Net Income or Loss for a Constituent Entity based on the accounting standard used in the preparation of Consolidated Financial Statements of the Ultimate Parent Entity in accordance with Article 3.1.3, the Financial Accounting Net Income or Loss for the Constituent Entity for the Fiscal Year may be determined using another Acceptable Financial Accounting Standard or an Authorised Financial Accounting Standard (adjusted to prevent Material Competitive Distortions) if:

(a) the financial accounts of the Constituent Entity are maintained based on that accounting standard;

(b) the information contained in the financial accounts is reliable; and

(c) permanent differences in excess of EUR 1 million that arise from the application of a particular principle or standard to items of income or expense or transactions that differs from the financial standard used in the preparation of the Consolidated Financial Statements of the Ultimate Parent Entity are conformed to the treatment required under the accounting standard used in the Consolidated Financial Statements of the Ultimate Parent Entity.

3.1.5 Articles 3.1.1 to 3.1.4 shall apply separately to a:

(a) Joint Venture and JV Subsidiaries of a Domestic JV Group; and

(b) Reverse Hybrid Entity created in accordance with the laws of the UAE.

Article 3.2. Adjustments to Determine the Pillar Two Income or Loss

3.2.1 A Constituent Entity's Financial Accounting Net Income or Loss is adjusted for the following items to arrive at that Entity's Pillar Two Income or Loss:

(a) Net Taxes Expense;

(b) Excluded Dividends;

(c) Excluded Equity Gain or Loss;

(d) Included Revaluation Method Gain or Loss;

(e) Gain or loss from disposition of assets and liabilities excluded under Article 6.3;

(f) Asymmetric Foreign Currency Gains or Losses;

(g) Policy Disallowed Expenses;

(h) Prior Period Errors and Changes in Accounting Principles;

(i) Accrued Pension Expense;

(j) Accrued Pension Income; and

(k) Excluded Insurance Reserves Expense.

3.2.2 At the election of the Filing Constituent Entity, a Constituent Entity may substitute in the computation of its Pillar Two Income or Loss the amount of stock-based compensation allowed as a deduction in the computation of its taxable income in the UAE for the amount expensed in its financial accounts for a cost or expense of such Constituent Entity that was paid with stock-based compensation, to the extent that such deduction is allowed under the Federal Decree-Law No. 47 of 2022. If the stock-based compensation expense arises in connection with an option that expires without exercise, the Constituent Entity must include the total amount previously deducted in the computation of its Pillar Two Income or Loss for the Fiscal Year in which the option expires. The election is a Five-Year Election and must be applied consistently to the stock-based compensation of all Constituent Entities located in the UAE for the year in which the election is made and all subsequent Fiscal Years. If the election is made in a Fiscal Year after some of the stock-based compensation of a transaction has been recorded in the financial accounts, the Constituent Entity must include in the computation of its Pillar Two Income or Loss for that Fiscal Year an amount equal to the excess of the cumulative amount allowed as an expense in the computation of its Pillar Two Income or Loss in previous Fiscal Years over the cumulative amount that would have been allowed as an expense if the election had been in place in those Fiscal Years. If the election is revoked, the Constituent Entity must include in the computation of its Pillar Two Income or Loss for the revocation year the amount deducted pursuant to the election that exceeds financial accounting expense accrued in respect of the stock-based compensation that has not been paid.

3.2.3 Transactions between Constituent Entities are subject to the following:

(a) when a transaction between Constituent Entities located in different Jurisdictions is not recorded in the same amount in the financial accounts of both Constituent Entities, or an asset is transferred at the disposing entity's carrying value or is not recorded consistently with the Arm's Length Principle, the Pillar Two Income or Loss of the Constituent Entities that are party to the transaction must be adjusted so that the transaction is recorded in the same amount and consistently with the Arm's Length Principle unless the adjustment is a unilateral adjustment and making such an adjustment would result in double taxation or double non-taxation under this Decision;

(b) a loss from a sale or other transfer of an asset between two Constituent Entities located in the UAE that is not recorded consistent with the Arm's Length Principle shall be recomputed based on the Arm's Length Principle if that loss is included in the computation of Pillar Two Income or Loss;

(c) rules for allocating income or loss between a Main Entity and its Permanent Establishments are found in Article 3.4.

3.2.4 Qualified Refundable Tax Credits and Marketable Transferable Tax Credit shall be treated as income in the computation of Pillar Two Income or Loss of a Constituent Entity. Non-Qualified Refundable Tax Credits and Non-Marketable Transferable Tax Credits shall not be treated as income in the computation of Pillar Two Income or Loss of a Constituent Entity.

3.2.5 With respect to assets and liabilities that are subject to fair value or impairment accounting in the Consolidated Financial Statements, a Filing Constituent Entity may elect to determine gains and losses using the realisation principle for purposes of computing Pillar Two Income. The election is a Five-Year Election and applies to all Constituent Entities located in the UAE to which the election applies. The election applies to all assets and liabilities of such Constituent Entities, unless the Filing Constituent Entity chooses to limit the election to tangible assets of such Constituent Entities or to Constituent Entities that are Investment Entities. Under this election:

(a) all gains or losses attributable to fair value or impairment accounting with respect to an asset or liability shall be excluded from the computation of Pillar Two Income or Loss;

(b) the carrying value of an asset or liability for purposes of determining gain or loss shall be its carrying value adjusted for accumulated depreciation at the later of:

(i) the first day of the election year, or

(ii) the date the asset was acquired or liability was incurred; and

(c) if the election is revoked, the Pillar Two Income or Loss of the Constituent Entities is adjusted by the difference at the beginning of the revocation year between the fair value of the asset or liability and the carrying value of the asset or liability determined pursuant to the election and adjusted for accumulated depreciation.

3.2.6 Where there is Aggregate Asset Gain in the UAE in a Fiscal Year, the Filing Constituent Entity may make, under this Article 3.2.6, an Annual Election for the UAE to adjust Pillar Two Income or Loss with respect to each previous Fiscal Year in the Look-back Period in the manner described in paragraphs (b) and (c) and to spread any remaining Adjusted Asset Gain over the Look-back Period in the manner described in paragraph (d). The Effective Tax Rate and Top-up Tax, if any, for any previous Fiscal Year must be re-calculated under Article 5.4.1. When an election is made under this Article:

(a) Covered Taxes with respect to any Net Asset Gain or Net Asset Loss in the Election Year shall be excluded from the computation of Adjusted Covered Taxes.

(b) The Aggregate Asset Gain in the Election Year shall be carried-back to the earliest Loss Year and set-off ratably against any Net Asset Loss of any Constituent Entity located in the UAE.

(c) If, for any Loss Year, the Adjusted Asset Gain exceeds the total amount of Net Asset Loss of all Constituent Entities located in the UAE, the Adjusted Asset Gain shall be carried forward to the following Loss Year (if any) and applied ratably against any Net Asset Loss of any Constituent Entity located in the UAE.

(d) Any Adjusted Asset Gain that remains after the application of paragraphs (b) and (c) shall be allocated evenly to each Fiscal Year in the Look-back Period. The Allocated Asset Gain for the relevant year shall be included in the computation of Pillar Two Income or Loss for a Constituent Entity located in the UAE in that year in accordance with the following formula:

For the purposes of the above formula, a specified Constituent Entity is a Constituent Entity that has Net Asset Gain in the Election Year and was located in the UAE in the relevant year. If there is no specified Constituent Entity for a relevant year the Adjusted Asset Gain allocated to that year will be allocated equally to each Constituent Entity in the UAE in that year.

3.2.7 The computation of a Low-Tax Entity's Pillar Two Income or Loss shall exclude any expense attributable to an Intragroup Financing Arrangement that can reasonably be anticipated, over the expected duration of the arrangement to:

(a) increase the amount of expenses taken into account in calculating the Pillar Two Income or Loss of the Low-Tax Entity;

(b) without resulting in a commensurate increase in the taxable income of the High-Tax Counterparty. An amount received or receivable should not be treated as increasing the taxable income of a High-Tax Counterparty if it is eligible for an exclusion, exemption, deduction, credit or other tax benefit under local law and the amount of that benefit is calculated by reference to the amount received or receivable.

3.2.8 An Ultimate Parent Entity may elect to apply its consolidated accounting treatment to eliminate income, expense, gains, and losses from transactions between Constituent Entities that are located, and included in a tax consolidation group, in the UAE for purposes of computing each such Constituent Entity's Net Pillar Two Income or Loss. The election under this Article is a Five-Year Election. Upon making or revoking such election, appropriate adjustments shall be made for the purposes of this Decision such that there shall not be duplications or omissions of items of Pillar Two Income or Loss as a result of having made or revoked the election.

3.2.9 An insurance company shall exclude from the computation of Pillar Two Income or Loss amounts charged to policyholders for Taxes paid by the insurance company in respect of returns to the policy holders. An insurance company shall include in the computation of Pillar Two Income or Loss any returns to policyholders that are not reflected in Financial Accounting Net Income or Loss to the extent the corresponding increase or decrease in liability to the policyholders is reflected in its Financial Accounting Net Income or Loss.

3.2.10 Amounts recognised as a decrease to the equity of a Constituent Entity attributable to distributions paid or payable in respect of Additional Tier One Capital and Restricted Tier One Capital issued by the Constituent Entity shall be treated as an expense in the computation of its Pillar Two Income or Loss. Amounts recognised as an increase to the equity of a Constituent Entity attributable to distributions received or receivable in respect of Additional Tier One Capital held by the Constituent Entity shall be included in the computation of its Pillar Two Income or Loss.

3.2.11 A Constituent Entity's Financial Accounting Net Income or Loss must be adjusted as necessary to reflect the requirements of the relevant provisions of Articles 6 and 7.

3.2.12 At the election of the Filing Constituent Entity, a Constituent Entity may exclude income attributable to a Qualified Debt Release from the computation of a Constituent Entity's Pillar Two Income or Loss.

3.2.13 Notwithstanding Article 3.2.1(b), a Filing Constituent Entity may make a Five-Year Election for each Constituent Entity to include in the computation of Pillar Two Income all dividends with respect to Portfolio Shareholdings, regardless of whether these are Short-term Portfolio Shareholdings.

3.2.14 Notwithstanding Article 3.2.1(c), a Filing Constituent Entity may make a Five-Year Election to treat foreign exchange gains or losses as an Excluded Equity Gain or Loss, to the extent that:

(a) such foreign exchange gains or losses are attributable to hedging instruments that hedge the currency exchange rate risk in Ownership Interests other than Portfolio Shareholdings;

(b) such gain or loss is recognised in Other Comprehensive Income at the level of the Consolidated Financial Statements; and

(c) the hedging instrument is considered an effective hedge under the Authorized Financial Accounting Standard used in the preparation of the Consolidated Financial Statements.

Article 3.3. International Shipping Income exclusion

3.3.1 For an MNE Group that has International Shipping Income, each Constituent Entity's International Shipping Income and Qualified Ancillary International Shipping Income shall be excluded from the computation of its Pillar Two Income or Loss under Article 3.2 for the Jurisdiction in which it is located. Where the computation of a Constituent Entity's International Shipping Income or Qualified Ancillary International Shipping Income results in a loss, the loss shall be excluded from the computation of its Pillar Two Income or Loss.

3.3.2 International Shipping Income means the net income obtained by a Constituent Entity from:

(a) the transportation of passengers or cargo by ships that it operates in international traffic, whether the ship is owned, leased or otherwise at the disposal of the Constituent Entity;

(b) the transportation of passengers or cargo by ships operated in international traffic under slot-chartering arrangements;

(c) leasing a ship, to be used for the transportation of passengers or cargo in international traffic, on charter fully equipped, crewed and supplied;

(d) leasing a ship on a bare boat charter basis, for the use of transportation of passengers or cargo in international traffic, to another Constituent Entity;

(e) the participation in a pool, a joint business or an international operating agency for the transportation of passengers or cargo by ships in international traffic; and

(f) the sale of a ship used for the transportation of passengers or cargo in international traffic provided that the ship has been held for use by the Constituent Entity for a minimum of one year.

International Shipping Income shall not include net income obtained from the transportation of passengers or cargo by ships via inland waterways within the same Jurisdiction.

3.3.3 Qualified Ancillary International Shipping Income means net income obtained by a Constituent Entity from the following activities that are performed primarily in connection with the transportation of passengers or cargo by ships in international traffic:

(a) leasing a ship on a bare boat charter basis to another shipping enterprise that is not a Constituent Entity, provided that the charter does not exceed three years;

(b) sale of tickets issued by other shipping enterprises for the domestic leg of an international voyage;

(c) leasing and short-term storage of containers or detention charges for the late return of containers;

(d) provision of services to other shipping enterprises by engineers, maintenance staff, cargo handlers, catering staff, and customer services personnel; and

(e) investment income where the investment that generates the income is made as an integral part of the carrying on the business of operating the ships in international traffic.

3.3.4 The aggregated Qualified Ancillary International Shipping Income of all Constituent Entities located in a Jurisdiction shall not exceed 50% of those Constituent Entities' International Shipping Income.

3.3.5 The costs incurred by a Constituent Entity that are directly attributable to its international shipping activities listed in Article 3.3.2 and the costs directly attributable to its qualified ancillary activities listed in Article 3.3.3 shall be deducted from the Constituent Entity's revenues from such activities to compute its International Shipping Income and Qualified Ancillary International Shipping Income. Other costs incurred by a Constituent Entity that are indirectly attributable to a Constituent Entity's international shipping activities and qualified ancillary activities shall be allocated on the basis of the Constituent Entity's revenues from such activities in proportion to its total revenues. All direct and indirect costs attributed to a Constituent Entity's International Shipping Income and Qualified Ancillary International Shipping Income shall be excluded from the computation of its Pillar Two Income or Loss.

3.3.6 In order for a Constituent Entity's International Shipping Income and Qualified Ancillary International Shipping Income to qualify for the exclusion from its Pillar Two Income or Loss under this Article, the Constituent Entity must demonstrate that the strategic or commercial management of all ships concerned is effectively carried on from within the Jurisdiction where the Constituent Entity is located.

Article 3.4. Allocation of Income or Loss between a Main Entity and a Permanent Establishment

3.4.1 The Financial Accounting Net Income or Loss of a Constituent Entity that is a Permanent Establishment in accordance with paragraphs (a), (b) and (c) of the definition in Article 18.1 is the net income or loss reflected in the separate financial accounts of the Permanent Establishment. If the Permanent Establishment does not have separate financial accounts, then the Financial Accounting Net Income or Loss is the amount that would have been reflected in its separate financial accounts if prepared on a standalone basis and in accordance with the accounting standard used in the preparation of the Consolidated Financial Accounts of the Ultimate Parent Entity.

3.4.2 The Financial Accounting Net Income or Loss of a Permanent Establishment referred to in Article 3.4.1 shall be adjusted, if necessary:

(a) in the case of a Permanent Establishment as defined by paragraphs (a) and (b) of the definition in Article 18.1, to reflect only the amounts and items of income and expense that are attributable to the Permanent Establishment in accordance with the applicable Tax Treaty or domestic law of the Jurisdiction where it is located regardless of the amount of income subject to tax and the amount of deductible expenses in that Jurisdiction;

(b) in the case of a Permanent Establishment as defined by paragraph (c) of the definition in Article 18.1, to reflect only the amounts and items of income and expense that would have been attributed to it in accordance with Article 7 of the OECD Model Tax Convention.

3.4.3 In case of a Constituent Entity that is a Permanent Establishment in accordance with paragraph (d) of the definition in Article 18.1, its income used for computing Financial Accounting Net Income or Loss is the income being exempted in the Jurisdiction where the Main Entity is located and attributable to the operations conducted outside that Jurisdiction. The expenses used for computing Financial Accounting Net Income or Loss are those that are not deducted for taxable purposes in the Jurisdiction where the Main Entity is located and that are attributable to such operations.

3.4.4 The Financial Accounting Net Income or Loss of a Permanent Establishment is not taken into account in determining the Pillar Two Income or Loss of the Main Entity, except as provided in Article 3.4.5.

3.4.5 A Pillar Two Loss of a Permanent Establishment shall be treated as an expense of the Main Entity (and not of the Permanent Establishment) for purposes of computing its Pillar Two Income or Loss to the extent that the loss of the Permanent Establishment is treated as an expense in the computation of the domestic taxable income of such Main Entity and is not set off against an item of income that is subject to tax under the laws of both the Jurisdiction of the Main Entity and the Jurisdiction of the Permanent Establishment. Pillar Two Income subsequently arising in the Permanent Establishment shall be treated as Pillar Two Income of the Main Entity (and not the Permanent Establishment) up to the amount of the Pillar Two Loss that previously was treated as an expense for purposes of computing the Pillar Two Income or Loss of the Main Entity.

Article 3.5. Allocation of Income or Loss from a Flow-through Entity

3.5.1 The Financial Accounting Net Income or Loss of a Constituent Entity that is a Flow-through Entity is allocated as follows:

(a) in the case of a Permanent Establishment through which the business of the Entity is wholly or partly carried out, the Financial Accounting Net Income or Loss of the Entity is allocated to that Permanent Establishment in accordance with Article 3.4;

(b) in the case of a Tax Transparent Entity that is not the Ultimate Parent Entity, any Financial Accounting Net Income or Loss remaining after application of paragraph (a) is allocated to its Constituent Entity-owners in accordance with their Ownership Interests; and

(c) in the case of a Tax Transparent Entity that is the Ultimate Parent Entity or a Reverse Hybrid Entity, any Financial Accounting Net Income or Loss remaining after application of paragraph (a) is allocated to it.

3.5.2 The rules of Article 3.5.1 shall be applied separately with respect to each Ownership Interest in the Flow-through Entity.

3.5.3 Prior to the application of Article 3.5.1, the Financial Accounting Net Income or Loss of a Flow-through Entity shall be reduced by the amount allocable to its owners that are not Group Entities and that hold their Ownership Interest in the Flow-through Entity directly or through a Tax Transparent Structure.

3.5.4 Article 3.5.3 does not apply to:

(a) an Ultimate Parent Entity that is a Flow-through Entity; or

(b) any Flow-through Entity owned by such an Ultimate Parent Entity (directly or through a Tax Transparent Structure).

The treatment of these Entities is addressed in Article 7.1.

3.5.5 The Financial Accounting Net Income or Loss of a Flow-through Entity is reduced by the amount that is allocated to another Constituent Entity.

3.5.6 The direct or indirect owner of an Ownership Interest in a Tax Transparent Entity shall treat any tax credits that flows-through a Tax Transparent Entity as tax credits of the owner. The allocation of the tax credits shall be allocated in the same proportion as the Financial Accounting Income or Loss allocated to the owners in accordance with Articles 3.5.1 to 3.5.5. Where the tax credits are allocated differently to the owners in accordance with the domestic tax law of the Jurisdictions where the owners are located and the Tax Transparent Entity is created, then the allocation of the tax credit under this provision shall follow such allocation made under the domestic laws.

3.5.7 The provisions of Article 3.5.6 shall not apply where a Filing Constituent Entity makes an Equity Investment Inclusion Election or in the case of a Qualified Flow-through Tax Benefit. In those cases, Article 7.5 shall apply.

Article 4

Computation of Adjusted Covered Taxes

Article 4.1. Adjusted Covered Taxes

4.1.1 The Adjusted Covered Taxes of a Constituent Entity for the Fiscal Year shall be equal to the current tax expense accrued in its Financial Accounting Net Income or Loss with respect to Covered Taxes for the Fiscal Year adjusted by:

(a) the net amount of its Additions to Covered Taxes for the Fiscal Year (as determined under Article 4.1.2) and Reductions to Covered Taxes for the Fiscal Year (as determined under Article 4.1.3);

(b) the Total Deferred Tax Adjustment Amount (as determined under Article 4.4); and

(c) any increase or decrease in Covered Taxes recorded in equity or Other Comprehensive Income relating to amounts included in the computation of Pillar Two Income or Loss that will be subject to tax under local tax rules.

4.1.2 The Additions to Covered Taxes of a Constituent Entity for the Fiscal Year is the sum of:

(a) any amount of Covered Taxes accrued as an expense in the profit before taxation in the financial accounts;

(b) any amount of Pillar Two Loss Deferred Tax Asset used under Article 4.5.3;

(c) any amount of Covered Taxes that is paid in the Fiscal Year and that relates to an uncertain tax position where that amount has been treated for a previous Fiscal Year as a Reduction to Covered Taxes under Article 4.1.3(d); and

(d) any amount of credit, refund or the transferable amount in respect of a Qualified Refundable Tax Credit or of a Marketable Transferable Tax Credit that is recorded as a reduction to the current tax expense.

4.1.3 The Reductions to Covered Taxes of a Constituent Entity for the Fiscal Year is the sum of:

(a) the amount of current tax expense with respect to income excluded from the computation of Pillar Two Income or Loss under Article 3;

(b) any amount of credit, refund or the transferable amount in respect of a tax credit that is not recorded as a reduction to the current tax expense and that is not derived from a Qualified Refundable Tax Credit or Marketable Transferable Tax Credit;

(c) any amount of Covered Taxes refunded or credited to a Constituent Entity, or the amount received by the Constituent Entity for the transfer of a tax credit, that was not treated as an adjustment to current tax expense in the financial accounts, except where they are derived from a Qualified Refundable Tax Credit or a Marketable Transferable Tax Credit;

(d) the amount of current tax expense which relates to an uncertain tax position; and

(e) any amount of current tax expense that is not expected to be paid within three years of the last day of the Fiscal Year.

4.1.4 No amount of Covered Taxes may be taken into account more than once.

4.1.5 In a Fiscal Year in which there is no Net Pillar Two Income in the UAE, if the Adjusted Covered Taxes for the UAE are less than zero and less than the Expected Adjusted Covered Taxes Amount, the Constituent Entities located in the UAE shall be treated as having Additional Current Top-up Tax in the UAE under Article 5.4 arising in the current Fiscal Year equal to the difference between these amounts. The Expected Adjusted Covered Taxes Amount is equal to the Pillar Two Income or Loss for the UAE multiplied by the Minimum Rate.

4.1.6 A Filing Constituent Entity may make an Annual Election to substitute the Additional Current Top-up Tax referred to in Article 4.1.5 with an excess negative tax expense carry-forward in accordance with the following:

(a) the excess negative tax expense for a Fiscal Year shall be equal to the amount computed under Article 4.1.5 for that Fiscal Year;

(b) the excess negative tax expense carry-forward must be utilised in all relevant subsequent computations of the Jurisdictional Effective Tax Rate;

(c) in each subsequent Fiscal Year in which there are positive Pillar Two Income and Adjusted Covered Taxes in the UAE, the aggregate Adjusted Covered Taxes shall be reduced (but not below zero) by the remaining balance of the excess negative tax expense carry-forward and the balance of such carry-forward shall be reduced by the same amount;

(d) the excess negative tax expense attributable to an amount of a loss that is carried back and applied against income for prior taxable years for domestic tax purposes must be taken into account in the current Fiscal Year under Article 4.1.5 and cannot be included in the excess negative tax expense carry-forward;

(e) the negative amount of Adjusted Covered Taxes will not be less than the Expected Covered Taxes Amount under Article 4.1.5;

(f) the excess negative tax expense carry-forward shall remain an attribute of a transferor group where the MNE Group disposes of one or more Constituent Entities in the UAE;

(g) where the MNE Group disposes of all Constituent Entities located in the UAE and re-acquires or establishes Constituent Entities located in the UAE in a subsequent Fiscal Year, the balance of the excess negative tax expense carry-forward shall be taken into account in determining the Adjusted Covered Taxes for the UAE beginning with such Fiscal Year; and

(h) the MNE Group shall maintain a record of the outstanding balance of the excess negative tax expense carry-forward.

Article 4.2. Definition of Covered Taxes

4.2.1 Covered Taxes means:

(a) Taxes recorded in the financial accounts of a Constituent Entity with respect to its income or profits or its share of the income or profits of a Constituent Entity in which it owns an Ownership Interest;

(b) Taxes imposed in lieu of a generally applicable corporate income tax; and

(c) Taxes levied by reference to retained earnings and corporate equity, including a Tax on multiple components based on income and equity.

4.2.2 Covered Taxes does not include any amount of:

(a) Top-up Tax accrued by a Parent Entity under a Qualified IIR in another Jurisdiction;

(b) Top-up Tax accrued by a Constituent Entity under a Qualified Domestic Minimum Top-up Tax in another Jurisdiction;

(c) Taxes attributable to an adjustment made by a Constituent Entity as a result of the application of a Qualified UTPR in another Jurisdiction;

(d) A Disqualified Refundable Imputation Tax;

(e) Taxes paid by an insurance company in respect of returns to policyholders.

Article 4.3. Allocation of Covered Taxes from one Constituent Entity to another Constituent Entity

4.3.1 Article 4.3.2 applies to the allocation of Covered Taxes in respect of Permanent Establishments, Tax Transparent Entities and Hybrid Entities as well as the allocation of CFC taxes and taxes on distributions from one Constituent Entity to another.

4.3.2 The following provisions apply with respect to Covered Taxes allocated from one Constituent Entity to another Constituent Entity:

(a) in relation to Covered Taxes on income attributable to a Permanent Establishment:

i. no amount of Covered Taxes included in the financial accounts of a Main Entity located outside the UAE and charged by another Jurisdiction shall be allocated to a Permanent Establishment located in the UAE; and

ii. no amount of Covered Taxes included in the financial accounts of a Main Entity located in the UAE allocable to a Permanent Establishment located outside the UAE in accordance with Article 4.3.2(a) of the Pillar Two Model Rules shall be allocated to the Main Entity;

(b) the amount of any Covered Taxes included in the financial accounts of a Tax Transparent Entity with respect to Pillar Two Income or Loss allocated to a Constituent Entity-owner pursuant to Article 3.5.1(b) is allocated to that Constituent Entity-owner;

(c) in the case of Covered Taxes that arise from a Controlled Foreign Company Tax Regime, no amount of Covered Taxes included in the financial accounts of a Constituent Entity-owner located outside the UAE shall be allocated to a Constituent Entity located in the UAE;

(d) in the case of a Constituent Entity that is a Hybrid Entity located in the UAE, no amount of Covered Taxes included in the financial accounts of a Constituent Entity-owner located outside the UAE on income of such Hybrid Entity shall be allocated to the Hybrid Entity located in the UAE; and

(e) no amount of Covered Taxes payable outside the UAE on distributions and deemed distributions made by a Constituent Entity located in the UAE to a Constituent Entity-owner located outside the UAE shall be allocated to the distributing Constituent Entity located in the UAE. For purposes of this paragraph, a deemed distributions refers to situations where the underlying interest is treated as an equity interest for tax purposes in the Jurisdiction imposing the tax and for financial accounting purposes.

4.3.3 In relation to Articles 4.3.2(c) and (d) of the Pillar Two Model Rules, an amount of Covered Taxes on Passive Income may be allocated to the Constituent Entity-owner located in the UAE in accordance with the following provisions:

(a) an amount of Covered Taxes, reflected in the financial statements of the direct or indirect Constituent Entity-owner, on their share of the income of the Constituent Entity located outside the UAE that is a controlled foreign company or a Hybrid Entity shall be determined as if it was allocated to the last-mentioned Entity;

(b) in respect of Passive Income, the amount referred in paragraph (a) shall be equal to the lesser of:

i. the amount of Covered Taxes referred in paragraph (a); or

ii. the Top-up Tax Percentage for the Constituent Entity's Jurisdiction, determined without regard to the amount referred in paragraph (a), multiplied by the amount of the Constituent Entity's Passive Income includible under a Controlled Foreign Company Tax Regime or fiscal transparency rule in the UAE;

(c) the amount of Covered Taxes that may be allocated to the direct or indirect Constituent Entity-owner located in the UAE is equal to the amount determined in accordance with paragraph (a) after subtracting that same amount after considering the limitation in paragraph (b).

4.3.4 Where the Pillar Two Income of a Permanent Establishment is treated as Pillar Two Income of the Main Entity pursuant to Article 3.4.5, any Covered Taxes arising in the location of the Permanent Establishment and associated with such income are treated as Covered Taxes of the Main Entity up to an amount not exceeding such income multiplied by the highest corporate tax rate on ordinary income in the Jurisdiction where the Main Entity is located.

Article 4.4. Mechanism to address temporary differences

4.4.1 The Total Deferred Tax Adjustment Amount for a Constituent Entity for the Fiscal Year is equal to the deferred tax expense accrued in its Financial Accounting Net Income or Loss if the applicable tax rate is below the Minimum Rate or, in any other case, such deferred tax expense recast at the Minimum Rate, with respect to Covered Taxes for the Fiscal Year subject to the adjustments set forth in Articles 4.4.2 and 4.4.3 and the following exclusions:

(a) The amount of deferred tax expense with respect to items excluded from the computation of Pillar Two Income or Loss under Article 3;

(b) The amount of deferred tax expense with respect to Disallowed Accruals and Unclaimed Accruals;

(c) The impact of a valuation adjustment or accounting recognition adjustment with respect to a deferred tax asset;

(d) The amount of deferred tax expense arising from a re-measurement with respect to a change in the applicable domestic tax rate; and

(e) The amount of deferred tax expense with respect to the generation and use of tax credits.

4.4.2 The Total Deferred Tax Adjustment Amount is adjusted as follows:

(a) Increased by the amount of any Unclaimed Accrual paid during the Fiscal Year;

(b) Increased by the amount of any Recaptured Deferred Tax Liability determined in a preceding Fiscal Year which has been paid during the Fiscal Year; and

(c) Reduced by the amount that would be a reduction to the Total Deferred Tax Adjustment Amount due to recognition of a loss deferred tax asset for a current year tax loss, where a loss deferred tax asset has not been recognised because the recognition criteria are not met.

4.4.3 If the taxpayer can demonstrate that a deferred tax asset recorded at a rate lower than the Minimum Rate is attributable to a Pillar Two Loss, such deferred tax asset may be recast at the Minimum Rate in the Fiscal Year in which the Pillar Two Loss was incurred. The Total Deferred Tax Adjustment Amount is reduced by the amount that a deferred tax asset is increased due to being recast under this Article.

4.4.4 To the extent a deferred tax liability, that is not a Recapture Exception Accrual, is taken into account under this Article and such amount is not paid within the five subsequent Fiscal Years, the amount must be recaptured pursuant to this Article. The amount of the Recaptured Deferred Tax Liability determined for the current Fiscal Year shall be treated as a reduction to Covered Taxes in the fifth preceding Fiscal Year and the Effective Tax Rate and Top-up Tax of such Fiscal Year shall be recalculated under the rules of Article 5.4.1. The Recaptured Deferred Tax Liability for the current Fiscal Year is the amount of the increase in a category of deferred tax liability that was included in the Total Deferred Tax Adjustment Amount in the fifth preceding Fiscal Year that has not reversed by the end of the last day of the current Fiscal Year, unless such amount relates to a Recapture Exception Accrual as set forth in Article 4.4.5.

4.4.5 Recapture Exception Accrual means the tax expense accrued attributable to changes in associated deferred tax liabilities, in respect of:

(a) Cost recovery allowances on tangible assets

(b) The cost of a licence or similar arrangement from the government for the use of immovable property or exploitation of natural resources that entails significant investment in tangible assets;

(c) Research and development expenses;

(d) De-commissioning and remediation expenses;

(e) Fair value accounting on unrealised net gains;

(f) Foreign currency exchange net gains;

(g) Insurance reserves and insurance policy deferred acquisition costs;

(h) Gains from the sale of tangible property located in the UAE that are reinvested in tangible property in the UAE; and

(i) Additional amounts accrued as a result of accounting principle changes with respect to categories (a) through (h).

4.4.6 Disallowed Accrual means:

(a) Any movement in deferred tax expense accrued in the financial accounts of a Constituent Entity which relates to an uncertain tax position; and

(b) Any movement in deferred tax expense accrued in the financial accounts of a Constituent Entity which relates to distributions from a Constituent Entity.

4.4.7 Unclaimed Accrual means any increase in a deferred tax liability recorded in the financial accounts of a Constituent Entity for a Fiscal Year that is not expected to be paid within the time period set forth in Article 4.4.4 and for which the Filing Constituent Entity makes an Annual Election not to include in Total Deferred Tax Adjustment Amount for such Fiscal Year.

4.4.8 Article 4.4.1(e) shall not apply to foreign tax credits that give rise to Substitute Loss Carry-forward Deferred Tax Assets to the extent that such foreign tax credits are used to offset tax liability on income included in the Constituent Entity's Pillar Two Income or Loss. The amount of a Substitute Loss Carry-forward Deferred Tax Asset is equal to the lesser of:

(a) the amount of the foreign tax credit in respect of the foreign source income inclusion that the domestic tax regime allows to be carried forward from the year in which the Constituent Entity had a tax loss (before taking into account any foreign source income) to a subsequent year; and

(b) the amount of the Constituent Entity's tax loss for the tax year (before taking into account any foreign source income) multiplied by the applicable domestic tax rate.

Article 4.5. The Pillar Two Loss Election

4.5.1 In lieu of applying the rules set forth in Article 4.4, a Filing Constituent Entity may make a Pillar Two Loss Election for the UAE. When a Pillar Two Loss Election is made for the UAE, a Pillar Two Loss Deferred Tax Asset is established in each Fiscal Year in which there is a Net Pillar Two Loss for the UAE. The Pillar Two Loss Deferred Tax Asset is equal to the Net Pillar Two Loss in a Fiscal Year for the UAE multiplied by the Minimum Rate.

4.5.2 The balance of the Pillar Two Loss Deferred Tax Asset is carried forward to subsequent Fiscal Years, reduced by the amount of Pillar Two Loss Deferred Tax Asset used in a Fiscal Year.

4.5.3 The Pillar Two Loss Deferred Tax Asset must be used in any subsequent Fiscal Year in which there is Net Pillar Two Income in the UAE in an amount equal to the lower of the Net Pillar Two Income multiplied by the Minimum Rate or the amount of available Pillar Two Loss Deferred Tax Asset.

4.5.4 If the Pillar Two Loss Election is subsequently revoked, any remaining Pillar Two Loss Deferred Tax Asset is reduced to zero, effective as of the first day of the first Fiscal Year in which the Pillar Two Loss Election is no longer applicable. Subsequently, the deferred tax assets and liabilities for each Constituent Entity in the UAE, if any, will be taken into account as if they had been calculated under Articles 4.4 and 9.1 for the prior Fiscal Year.

4.5.5 The Pillar Two Loss Election must be filed with the first Pillar Two Information Return of the MNE Group or with the first Top-up Tax Return of the MNE Group, whichever is filed earlier, or with both if they are required to be submitted for the first Fiscal Year in which the MNE Group has a Constituent Entity located in the Jurisdiction.

4.5.6 A Flow-through Entity that is a UPE of an MNE Group may make a Pillar Two Loss Election under this Article. When such an election is made, the Pillar Two Loss Deferred Tax Asset shall be calculated in accordance with Articles 4.5.1 to 4.5.5, however, the Pillar Two Loss Deferred Tax Asset shall be calculated with reference to the Pillar Two Loss of the Flow-through Entity after reduction in accordance with Article 7.1.2.

Article 4.6. Post-filing Adjustments and Tax Rate Changes

4.6.1 An adjustment to a Constituent Entity's liability for Covered Taxes for a previous Fiscal Year, including one that derives from a loss carried-back, recorded in the financial accounts shall be treated as an adjustment to Covered Taxes in the Fiscal Year in which the adjustment is made, unless the adjustment relates to a Fiscal Year in which there is a decrease in Covered Taxes for the UAE. In the case of a decrease in Covered Taxes included in the Constituent Entity's Adjusted Covered Taxes for a previous Fiscal Year, the Effective Tax Rate and Top-up Tax for such Fiscal Year must be recalculated under Article 5.4.1. In the Article 5.4.1 recalculations, the Adjusted Covered Taxes determined for the Fiscal Year shall be reduced by the amount of the decrease in Covered Taxes and Pillar Two Income determined for the Fiscal Year and any intervening Fiscal Years shall be adjusted as necessary and appropriate. A Filing Constituent Entity may make an Annual Election to treat an immaterial decrease in Covered Taxes as an adjustment to Covered Taxes in the Fiscal Year in which the adjustment is made. An immaterial decrease in Covered Taxes is an aggregate decrease of less than EUR 1 million in the Adjusted Covered Taxes determined for the UAE for a Fiscal Year.

4.6.2 The amount of deferred tax expense resulting from a reduction to the applicable domestic tax rate shall be treated as an adjustment under Article 4.6.1 to a Constituent Entity's liability for Covered Taxes claimed under Article 4.1 for a previous Fiscal Year when such reduction results in the application of a rate that is less than the Minimum Rate.

4.6.3 The amount of deferred tax expense, when paid, that has resulted from an increase to the applicable domestic tax rate shall be treated as an adjustment under Article 4.6.1 to a Constituent Entity's liability for Covered Taxes claimed under Article 4.1 for a previous Fiscal Year when such amount was originally recorded at a rate less than the Minimum Rate. This adjustment is limited to an amount that is equal to an increase of deferred tax expense up to such deferred tax expense recast at the Minimum Rate.

4.6.4 If more than EUR 1 million of the amount accrued by a Constituent Entity as current tax expense and included in Adjusted Covered Taxes for a Fiscal Year is not paid within three years of the last day of such year, the Effective Tax Rate and Top-up Tax for the Fiscal Year in which the unpaid amount was claimed as a Covered Tax must be recalculated in accordance with Article 5.4.1 by excluding such unpaid amount from Adjusted Covered Taxes.

Article 5

Computation of Effective Tax Rate and Top-up Tax

Article 5.1. Determination of Effective Tax Rate

5.1.1 The Effective Tax Rate of the MNE Group with Net Pillar Two Income shall be calculated for each Fiscal Year. The Effective Tax Rate of the MNE Group is equal to the sum of the Adjusted Covered Taxes of each Constituent Entity located in the UAE divided by the Net Pillar Two Income of the UAE for the Fiscal Year. For purposes of Article 5, each Stateless Constituent Entity subject to the provisions of this Decision shall be treated as if it was a single Constituent Entity located in the UAE.

5.1.2 The Net Pillar Two Income of the UAE for a Fiscal Year is the positive amount, if any, computed in accordance with the following formula:

Net Pillar Two Income = Pillar Two Income of all Constituent Entities – Pillar Two Losses of all Constituent Entities

Where:

(a) the Pillar Two Income of all Constituent Entities is the sum of the Pillar Two Income of all Constituent Entities located in the UAE determined in accordance with Article 3 for the Fiscal Year; and

(b) the Pillar Two Losses of all Constituent Entities is the sum of the Pillar Two Losses of all Constituent Entities located in the UAE determined in accordance with Article 3 for the Fiscal Year.

5.1.3 Adjusted Covered Taxes and Pillar Two Income or Loss of Constituent Entities that are Investment Entities are excluded from the determination of the Effective Tax Rate in Article 5.1.1 and the determination of Net Pillar Two Income in Article 5.1.2.

Article 5.2. Top-up Tax

5.2.1 The Top-up Tax Percentage for a Fiscal Year shall be the positive percentage point difference, if any, computed in accordance with the following formula:

Top up Tax Percentage = Minimum Rate - Effective Tax Rate

Where the Effective Tax Rate is the Effective Tax Rate determined in accordance with Article 5.1 for the Fiscal Year.

5.2.2 The Excess Profit for the Fiscal Year is the positive amount, if any, computed in accordance with the following formula:

Excess Profit = Net Pillar Two Income – Substance based Income Exclusion

Where:

(a) The Net Pillar Two Income is the Net Pillar Two Income of the UAE determined under Article 5.1.2 for the Fiscal Year; and

(b) The Substance-based Income Exclusion is the Substance-based Income Exclusion determined under Article 5.3 for the UAE for the Fiscal Year (if any).

5.2.3 The Top-up Tax for a Fiscal Year is equal to the positive amount, if any, computed in accordance with the following formula:

Top-up Tax = (Top-up Tax Percentage x Excess Profit) + Additional Current Top-up Tax

Where:

(a) The Top-up Tax Percentage is the percentage point difference determined in accordance with Article 5.2.1 for the Fiscal Year;

(b) The Excess Profit is the Excess Profit determined in accordance with Article 5.2.2 for the Fiscal Year; and

(c) The Additional Current Top-up Tax is the amount determined, or treated as Additional Current Top-up Tax, under Article 4.1.5 or Article 5.4.1 for the Fiscal Year.

5.2.4 Unless a Domestic Designated Filing Entity has been appointed to pay the Top-up Tax or except where Article 5.4.2 applies, the Top-up Tax of a Constituent Entity shall be determined for each Constituent Entity located in the UAE that has Pillar Two Income determined in accordance with Article 3 for the Fiscal Year included in the computation of Net Pillar Two Income of the UAE in accordance with the following formula:

Where:

(a) The Top-up Tax is the Top-up Tax determined in accordance with Article 5.2.3 for the Fiscal Year;

(b) The Pillar Two Income of the Constituent Entity is the Pillar Two Income of the Constituent Entity located in the UAE determined in accordance with Article 3.2 for the Fiscal Year;

(c) The aggregate Pillar Two Income of all Constituent Entities is the aggregate Pillar Two Income of all Constituent Entities located in the UAE that have Pillar Two Income for the Fiscal Year included in the computation of Net Pillar Two Income in accordance with Article 5.1.2.

5.2.5 Where a Domestic Designated Filing Entity has not been appointed to pay the Top-up Tax, the Top-up Tax is attributable to a recalculation under Article 5.4.1 and there is no Net Pillar Two Income in the UAE for the current Fiscal Year, the Top-up Tax shall be allocated using the formula in Article 5.2.4 based on the Pillar Two Income of the Constituent Entities in the Fiscal Years for which the recalculations under Article 5.4.1 were performed.

5.2.6 Where the Effective Tax Rate computed in accordance with Article 5.1.1 is less than zero and the Top-up Tax Percentage computed in accordance with Article 5.2.1 is above the Minimum Rate, the following provisions shall apply:

(a) the Excess Negative Tax Expense shall be excluded from its aggregate Adjusted Covered Taxes and an excess negative tax expense carry-forward shall be established;

(b) the Excess Negative Tax Expense for a Fiscal Year is equal to the negative Adjusted Covered Taxes for that Fiscal Year;

(c) the excess negative tax expense carry-forward must be utilised in all relevant subsequent computations of the Jurisdictional Effective Tax Rate;

(d) in each subsequent Fiscal Year in which there is positive Pillar Two Income and Adjusted Covered Taxes in the UAE, the aggregate Adjusted Covered Taxes shall be reduced (but not below to zero) by the remaining balance of the excess negative tax expense carry-forward and such carry-forward shall be reduced by the same amount;

(e) the excess negative tax expense attributable to an amount of a loss that is carried back and applied against income for prior taxable years for domestic tax purposes must be taken into account in the current Fiscal Year under Article 5.2.1 and cannot be included in the excess negative tax expense carry-forward;

(f) the excess negative tax expense carry-forward shall remain an attribute of a transferor group where the MNE Group disposes of one or more Constituent Entities in the UAE;

(g) where the MNE Group disposes of all Constituent Entities in the UAE and re-acquires or establishes Constituent Entities in the UAE in a subsequent Fiscal Year, the balance of the excess negative tax expense carry-forward shall be taken into account in determining the Adjusted Covered Taxes for the UAE beginning with such Fiscal Year;

(h) the MNE Group shall maintain a record of the outstanding balance of the excess negative tax expense carry-forward.

Article 5.3. Substance-based Income Exclusion

5.3.1 The Net Pillar Two Income for the UAE shall be reduced by the Substance-based Income Exclusion of the UAE to determine the Excess Profit for purposes of computing the Top-up Tax under Article 5.2. A Filing Constituent Entity of an MNE Group may make an Annual Election not to apply the Substance-based Income Exclusion by not computing the exclusion or claiming it in the computation of Top-up Tax in the Top-up Tax Return filed for the Fiscal Year.

5.3.2 The Substance-based Income Exclusion amount is the sum of the payroll carve-out and the tangible asset carve-out for each Constituent Entity, except for Constituent Entities that are Investment Entities, located in the UAE.

5.3.3 The payroll carve-out for a Constituent Entity located in the UAE is equal to 5% of its Eligible Payroll Costs of Eligible Employees that perform activities for the MNE Group in the UAE, except Eligible Payroll costs that are:

(a) capitalised and included in the carrying value of Eligible Tangible Assets;

(b) attributable to a Constituent Entity's International Shipping Income and Qualified Ancillary International Shipping Income under Article 3.3.5 that is excluded from the computation of Pillar Two Income or Loss for the Fiscal Year.

5.3.4 The tangible asset carve-out for a Constituent Entity located in the UAE is equal to 5% of the carrying value of Eligible Tangible Assets located in the UAE. Eligible Tangible Assets means:

(a) property, plant, and equipment located in the UAE;

(b) natural resources located in the UAE;

(c) a lessee's right of use of tangible assets located in the UAE; and

(d) a licence or similar arrangement from the government for the use of immovable property or exploitation of natural resources that entails significant investment in tangible assets.

For this purpose, the tangible asset carve-out computation shall not include the carrying value of property (including land or buildings) that is held for sale, lease or investment. The tangible asset carve-out computation shall not include the carrying value of tangible assets used in the generation of a Constituent Entity's International Shipping Income and Qualified Ancillary International Shipping Income (i.e. ships and other maritime equipment and infrastructure). The carrying value of tangible assets attributable to a Constituent Entity's excess income over the cap for Qualified Ancillary International Shipping Income under Article 3.3.4 shall be included in the tangible asset carve-out computation.

5.3.5 The computation of carrying value of Eligible Tangible Assets for purposes of Article 5.3.4 shall be based on the average of the carrying value (net of accumulated depreciation, amortisation, depletion, or impairment losses and including any amount attributable to capitalisation of payroll expense) at the beginning and ending of the Reporting Fiscal Year as recorded for the purposes of preparing the Consolidated Financial Statements of the Ultimate Parent Entity.

5.3.6 For purposes of Articles 5.3.3 and 5.3.4, the Eligible Payroll Costs and Eligible Tangible Assets of a Constituent Entity that is a Permanent Establishment are those included in its separate financial accounts as determined by Article 3.4.1 and adjusted in accordance with Article 3.4.2, provided that the Eligible Employees and Eligible Tangible Assets are located in the Jurisdiction where the Permanent Establishment is located. The Eligible Payroll Costs and Eligible Tangible Assets of a Permanent Establishment are not taken into account for the Eligible Payroll Costs and Eligible Tangible Assets of the Main Entity. The Eligible Payroll Costs and Eligible Tangible Assets of a Permanent Establishment whose income has been wholly or partly excluded in accordance with Articles 3.5.3 and 7.1.4 are excluded from the Substance-based Income Exclusion computations of the MNE Group in the same proportion.

5.3.7 For purposes of Articles 5.3.3 and 5.3.4, Eligible Payroll Costs and Eligible Tangible Assets of a Flow-through Entity that are not allocated under Article 5.3.6 are allocated as follows:

(a) if the Financial Accounting Net Income or Loss of the Flow-through Entity has been allocated to the Constituent Entity-owner under Article 3.5.1(b), then the Entity's Eligible Payroll Costs and Eligible Tangible Assets are allocated in the same proportion to the Constituent Entity-owner provided it is located in the Jurisdiction where the Eligible Employees and Eligible Tangible Assets are located;

(b) if the Flow-through Entity is the Ultimate Parent Entity, then Eligible Payroll Costs and Eligible Tangible Assets located in the Jurisdiction where the Ultimate Parent Entity is located are allocated to it and reduced in proportion to the income that is excluded under Article 7.1.1; and

(c) all other Eligible Payroll Costs and Eligible Tangible Assets of the Flow-through Entity are excluded from the Substance-based Income Exclusion computations of the MNE Group.

5.3.8 A Filing Constituent Entity may claim only a subset of the total Eligible Payroll Costs and Eligible Tangible Assets when calculating the Substance-based Income Exclusion amount under the provisions of this Decision.

5.3.9 Eligible Payroll Costs and Eligible Tangible Assets attributable to income excluded under Article 7.2.1 shall be excluded from the computation of the Substance-based Income Exclusion. The amount excluded under this provision is equal to the total Eligible Payroll Costs and total carrying value of the Eligible Tangible Assets multiplied by the ratio of the Pillar Two Income excluded under Article 7.2.1 to the total Pillar Two Income determined for the Ultimate Parent Entity before the exclusion under Article 7.2.1.

5.3.10 For purposes of Article 5.3.3, a Constituent Entity employer located in the UAE will be entitled to 100% of the Eligible Payroll Costs of an Eligible Employee where such employee undertakes more than 50% of its activities for the Constituent Entity employer during the relevant Fiscal Year within the UAE. Where an Eligible Employee undertakes 50% or less of its activities for its Constituent Entity employer during the relevant Fiscal Year within the UAE, the Constituent Entity employer will be entitled to the proportional Eligible Payroll Costs in accordance with the following formula:

Where:

(a) Eligible Payroll Costs means the total Eligible Payroll Costs of the Eligible Employee that performs activities for the MNE Group for the relevant Fiscal Year.

(b) Work Time in the UAE means the total of time that the Eligible Employee worked for the Constituent Entity employer located in the UAE during the relevant Fiscal Year.

قرار مجلس الوزراء لسنة 2024 بشأن فرض الضريبة التكميلية على المؤسسات متعددة الجنسيات

3. Total Work Time means the total of time that the Eligible Employee worked for the Constituent Entity employer during the relevant Fiscal Year.

5.3.11 Where Article 5.3.4 applies with respect to an Eligible Tangible Asset of a Constituent Entity owner or lessee located in the UAE, such Constituent Entity will be entitled to 100% of the carrying value of an Eligible Tangible Asset where more than 50% of the time, during the relevant Fiscal Year, the asset is located within the UAE. Where an Eligible Tangible Asset is located within the UAE 50% or less of the time during the relevant Fiscal Year, the Constituent Entity owner or lessee will be entitled to the proportional carrying value of the Eligible Tangible Asset in accordance with the following formula:

Where:

1. Eligible Tangible Asset means the total carrying value of Eligible Tangible Asset of the Constituent Entity owner or lessee for the relevant Fiscal Year.
2. Time in the UAE means the total of time that the Eligible Tangible Asset was located in the UAE during the relevant Fiscal Year.
3. Total Time means the total time that the Eligible Tangible Asset was owned by the Constituent Entity owner or leased by the Constituent Entity lessee during the relevant Fiscal Year.

5.3.12 For purposes of Articles 5.3.4 and 5.3.5, the following provisions apply in the case of an operating lease:

1. if a lessee does not recognise a right-of-use asset with respect to a leased asset in its financial accounts, a fictional or hypothetical right-of-use asset cannot be created for purposes of the Pillar Two Rules;
2. the lessor will be allowed to take a portion of the carrying value of an asset into account for computing the amount of its Eligible Tangible Asset if the lessor and the asset are located in the UAE in accordance with Articles 5.3.4 and 5.3.11;
3. the amount referred to in paragraph (b) is equal to the excess, if any, of the lessor's average carrying value of the asset determined at the beginning and end of the Fiscal Year over the average amount of the lessee's right of use asset determined at the beginning and end of the Fiscal Year;
4. for purposes of paragraph (c), if the lessee is not a Constituent Entity, the lessee's right-of-use asset shall be equal to the un-discounted amount of payments remaining due under the lease, including any extensions that would be taken into account in determining a right-of-use asset under the financial accounting standard used to determine the Financial Accounting Net Income or Loss of the lessor;
5. in the case of a short-term rental asset, the lessee's right-of-use asset shall be deemed to be nil;
6. for purposes of paragraph (e), a short-term rental asset is an asset that is regularly leased several times to different lessees during the Fiscal Year and the average lease period, including any renewals and extensions, with respect to each lessee is 30 days or less.

5.3.13 For purposes of Article 5.3.5, the carrying value of an asset shall:

1. not include any increases and any subsequent incremental increase in depreciation resulting from the revaluation model;
2. take into account adjustments that derive from purchase price allocation as a result of the acquisition of an Ownership Interest in an Entity by a member of the Group; and
3. not take into account adjustments that derive from inter-company sales.

Article 5.4. Additional Current Top-up Tax

5.4.1 If the Effective Tax Rate and Top-up Tax for a prior Fiscal Year is required or permitted to be recalculated pursuant to an Effective Tax Rate Adjustment Article,

1. the Effective Tax Rate and Top-up Tax for the prior Fiscal Year shall be recalculated in accordance with the rules of Article 5.1 through Article 5.3 after taking into account the adjustments to Adjusted Covered Taxes and Pillar Two Income or Loss required by the relevant Effective Tax Rate Adjustment Article; and
2. any amount of incremental Top-up Tax resulting from such recalculation shall be treated as Additional Current Top-up Tax under Article 5.2.3 arising in the current Fiscal Year.

5.4.2 Unless Article 2.2 applies, if there is an Additional Current Top-up Tax attributable to the operation of Article 4.1.5, the Pillar Two Income of each Constituent Entity located in the UAE shall be equal to the result of the Top-up Tax allocated to such Entity under this Article divided by the Minimum Rate. The amount of Additional Current Top-up Tax allocated to each Constituent Entity for purposes of this Article shall be allocated only to Constituent Entities that record an Adjusted Covered Taxes amount that is less than zero and less than the Pillar Two Income or Loss of such Constituent Entity multiplied by the Minimum Rate. The allocation shall be made pro-rata based upon the following amount for each of those Constituent Entities:

(Pillar Two Income or Loss x Minimum Rate) – Adjusted Covered Taxes

Article 5.5. De minimis exclusion

5.5.1 At the election of the Filing Constituent Entity, and notwithstanding the requirements otherwise provided in Article 5, the Top-up Tax for the Constituent Entities located in the UAE shall be deemed to be zero for a Fiscal Year if, for such Fiscal Year:

1. the Average Pillar Two Revenue is less than EUR 10 million; and
2. the Average Pillar Two Income or Loss is a loss or is less than EUR 1 million.

The election under this Article is an Annual Election.

5.5.2 For purposes of Article 5.5.1, the Average Pillar Two Revenue (or Pillar Two Income or Loss) is the average of the Pillar Two Revenue (or Pillar Two Income or Loss) for the current and the two preceding Fiscal Years. If there were no Constituent Entities with Pillar Two Revenue or Pillar Two Losses in the first or second preceding Fiscal Year, such year or years shall be excluded from the calculation of the Average Pillar Two Revenue and the Average Pillar Two Income or Loss.

5.5.3 For purposes of Article 5.5.2:

1. the Pillar Two Revenue for a Fiscal Year is the sum of the revenue of all Constituent Entities (including Minority-Owned Constituent Entities) located in the UAE for such Fiscal Year, taking into account the adjustments calculated in accordance with Article 3;
2. the Pillar Two Income or Loss for a Fiscal Year is the Net Pillar Two Income of the UAE, if any, or the Net Pillar Two Loss of the UAE (including the Pillar Two Income or Loss of Minority-Owned Constituent Entities located in the UAE);
3. Post-filing Adjustments pursuant to an Effective Tax Rate Adjustment Article that result in a decrease of the Pillar Two Income or the Pillar Two Revenue for a previous Fiscal Year shall not be considered for purposes of Article 5.5 for the relevant Fiscal Year or Years; and
4. Post-filing Adjustments pursuant to an Effective Tax Rate Adjustment Article that result in an increase of the Pillar Two Income or the Pillar Two Revenue for a previous Fiscal Year shall be taken into account for that Fiscal Year such that a recalculation shall be made to determine the application of Article 5.5 for the relevant Fiscal Year or Years.

5.5.4 An election under Article 5.5 shall not apply to a Constituent Entity that is a Stateless Constituent Entity subject to the provisions of this Decision and the revenue and Pillar Two Income or Loss of a Stateless Constituent Entity and of an Investment Entity shall be excluded from the computations in Article 5.5.3.

Article 5.6. Minority-Owned Constituent Entities

5.6.1 The computation of the Effective Tax Rate and Top-up Tax for the UAE in accordance with Articles 3 to 7, and Article 8.2 with respect to members of a Minority-Owned Subgroup shall apply as if they were a separate MNE Group. The Adjusted Covered Taxes and Pillar Two Income or Loss of members of a Minority-Owned Subgroup are excluded from the determination of the remainder of the MNE Group's Effective Tax Rate in Article 5.1.1 and Net Pillar Two Income in Article 5.1.2.

5.6.2 The Effective Tax Rate and Top-up Tax of a Minority-Owned Constituent Entity that is not a member of a Minority-Owned Subgroup is computed on an entity basis in accordance with Articles 3 to 7, and Article 8.2. The Adjusted Covered Taxes and Pillar Two Income or Loss of the Minority-Owned Constituent Entity are excluded from the determination of the remainder of the MNE Group's Effective Tax Rate in Article 5.1.1 and Net Pillar Two Income in Article 5.1.2.

Article 6
Corporate Restructurings and Holding Structures

Article 6.1. Application of Consolidated Revenue Threshold to Group Mergers and Demergers

6.1.1 For the purposes of Article 1.1:

1. If two or more Groups merge to form a single Group in any of the four Fiscal Years prior to the tested Fiscal Year, then the consolidated revenue threshold of the MNE Group for any Fiscal Year prior to the merger is deemed to be met for that year if the sum of the revenue included in each of their Consolidated Financial Statements for that year is equal to or greater than EUR 750 million.
2. Where an Entity that is not a member of any Group (acquirer) acquires or merges with an Entity or Group (target) in the tested Fiscal Year and the target or acquirer does not have Consolidated Financial Statements in any of the four Fiscal Years prior to the tested Fiscal Year because it was not a member of any Group in that year, the consolidated revenue threshold of the MNE Group is deemed to be met for that year if the sum of the revenue included in each of their Financial Statements or Consolidated Financial Statements for that year is equal to or greater than EUR 750 million.
3. Where a single MNE Group within the scope of this Decision demerges into two or more Groups (each a demerged Group), the consolidated revenue threshold is deemed to be met by a demerged Group:
   1. with respect to the first tested Fiscal Year ending after the demerger, if the demerged Group has annual revenues of EUR 750 million or more in that year;
   2. with respect to the second to fourth tested Fiscal Years ending after the demerger, if the demerged Group has annual revenues of EUR 750 million or more in at least two of the Fiscal Years following the year of the demerger.

6.1.2 For the purposes of Article 6.1.1 a merger is any arrangement where:

1. all or substantially all of the Group Entities of two or more separate Groups are brought under common control such that they constitute Group Entities of a combined Group; or
2. an Entity that is not a member of any Group is brought under common control with another Entity or Group such that they constitute Group Entities of a combined Group.

6.1.3 For the purposes of Article 6.1.1 a demerger is any arrangement where the Group Entities of a single Group are separated into two or more Groups that are no longer consolidated by the same Ultimate Parent Entity.

Article 6.2. Constituent Entities joining and leaving an MNE Group

6.2.1 Except to the extent provided in Article 6.2.2, the following provisions apply where an Entity (the target) becomes or ceases to be a Constituent Entity of an MNE Group as a result of a transfer of direct or indirect Ownership Interests in such Entity during the Fiscal Year (the acquisition year):

1. where the target joins or leaves a Group or the target becomes the Ultimate Parent Entity of a new Group, the target will be treated as a member of the Group for the purposes of the provisions of this Decision if any portion of its assets, liabilities, income, expenses or cash flows are included on a line-by-line basis in the Consolidated Financial Statements of the Ultimate Parent Entity in the acquisition year;
2. in the acquisition year, an MNE Group shall take into account only the Financial Accounting Net Income or Loss and Adjusted Covered Taxes of the target that are taken into account in the Consolidated Financial Statements of the Ultimate Parent Entity for purposes of applying this Decision;
3. in the acquisition year and each succeeding year, the target shall determine its Pillar Two Income or Loss and Adjusted Covered Taxes using its historical carrying value of the assets and liabilities;
4. the computation of the target's Eligible Payroll Costs under Article 5.3.3 shall take into account only those costs reflected in the financial statements used to determine the Pillar Two Income or Loss;
5. the computation of carrying value of the target's Eligible Tangible Assets for purposes of Article 5.3.4 shall be adjusted proportionally to correspond with the length of the relevant Fiscal Year that the target was a member of the MNE Group;
6. with the exception of the Pillar Two Loss Deferred Tax Asset, the deferred tax assets and deferred tax liabilities of a Constituent Entity that are transferred between MNE Groups shall be taken into account under this Decision by the acquiring MNE Group in the same manner and to the same extent as if the acquiring MNE Group controlled the Constituent Entity when such assets and liabilities arose; and
7. deferred tax liabilities of a target that have previously been included in its Total Deferred Tax Adjustment Amount shall be treated as reversed for purposes of applying Article 4.4.4 by the disposing MNE Group and treated as arising in the acquisition year for purposes of applying Article 4.4.4 by the acquiring MNE Group, except that in such cases any subsequent reduction to Covered Taxes under Article 4.4.4 shall have effect in the year in which the amount is recaptured.

6.2.2 For purposes of the implementation of this Decision, the acquisition or disposal of a Controlling Interest in a Constituent Entity will be treated as an acquisition or disposal of the assets and liabilities if the Jurisdiction in which the target Constituent Entity is located, or in the case of a Tax Transparent Entity, the Jurisdiction in which the assets are located, treats the acquisition or disposal of that Controlling Interest in the same or similar manner as an acquisition or disposition of the assets and liabilities and imposes a Covered Tax on the seller based on the difference between their tax basis and the consideration paid in exchange for the Controlling Interest or the fair value of the assets and liabilities.

Article 6.3. Transfer of Assets and Liabilities

6.3.1 Subject to Article 3.2.3, in the case of a disposition or acquisition of assets and liabilities, a disposing Constituent Entity will include the gain or loss on disposition in the computation of its Pillar Two Income or Loss and an acquiring Constituent Entity will determine its Pillar Two Income or Loss using the acquiring Constituent Entity's carrying value of the acquired assets and liabilities determined under the accounting standard used by the financial statements used for the purposes of determining the Pillar Two Income or Loss.

6.3.2 If the disposition or acquisition of assets and liabilities is part of a Pillar Two Reorganisation Article 6.3.1 shall not apply and:

1. a disposing Constituent Entity will exclude any gain or loss on the disposition from the computation of its Pillar Two Income or Loss; and
2. an acquiring Constituent Entity will determine its Pillar Two Income or Loss after the acquisition using the disposing Entity's carrying values of the acquired assets and liabilities upon disposition.

6.3.3 If a disposition or acquisition of assets and liabilities is part of a Pillar Two Reorganisation in which a disposing Constituent Entity recognises Non-qualifying Gain or Loss, Articles 6.3.1 and 6.3.2 shall not apply and:

1. the disposing Constituent Entity will include gain or loss on the disposition in its Pillar Two Income or Loss computation to the extent of the Non-qualifying Gain or Loss; and
2. an acquiring Constituent Entity will determine its Pillar Two Income or Loss after the acquisition using the disposing Entity's carrying value of the acquired assets and liabilities upon disposition adjusted consistent with local tax rules to account for the Non-qualifying Gain or Loss.

6.3.4 At the election of the Filing Constituent Entity, a Constituent Entity of an MNE Group that is required or permitted to adjust the basis of its assets and the amount of its liabilities to fair value for tax purposes in the UAE in which it is located, shall:

1. Include in the computation of its Pillar Two Income or Loss an amount of gain or loss in respect of each of its assets and liabilities that is equal to:
   1. the difference between the carrying value for financial accounting purposes of the asset or liability immediately before and the fair value of the asset or liability immediately after the date of the event that triggered the tax adjustment (the triggering event);
   2. decreased (or increased) by the Non-Qualifying Gain (or Loss), if any, arising in connection with the triggering event;
2. use the fair value for financial accounting purposes of the asset or liability immediately after the triggering event to determine Pillar Two Income or Loss in Fiscal Years ending after the triggering event; and
3. include the net total of the amounts determined in 6.3.4(a) in the Constituent Entity's Pillar Two Income or Loss in one of the following ways:
   1. the net total of the amounts is included in the Fiscal Year in which the triggering event occurs; or
   2. an amount equal to the net total of the amounts divided by five is included in the Fiscal Year in which the triggering event occurs and in each of the immediate four subsequent Fiscal Years, unless the Constituent Entity leaves the MNE Group in a Fiscal Year within this period, in which case the remaining amount will be wholly included in that Fiscal Year.

Article 6.4. Joint Ventures

6.4.1 Articles 3 to 7 and Article 8.2 shall apply for the purposes of computing any Top-up Tax of the Joint Venture and its JV Subsidiaries as if they were Constituent Entities of a separate MNE Group and as if the Joint Venture was the Ultimate Parent Entity of that Group.

Article 6.5. Multi-Parented MNE Groups

6.5.1 The following provisions apply to Multi-Parented MNE Groups:

1. the Entities and Constituent Entities of each Group are treated as members of a single MNE Group for purposes of this Decision (the Multi-Parented MNE Group);
2. an Entity (other than an Excluded Entity) shall be treated as a Constituent Entity if it is consolidated on a line-by-line basis by the Multi-Parented MNE Group or its Controlling Interests are held by Entities in the Multi-Parented MNE Group;
3. the Consolidated Financial Statements of the Multi-Parented MNE Group shall be the Consolidated Financial Statements referred to in the definition of Stapled Structure or Dual-listed arrangement (as relevant) prepared under an Acceptable Financial Accounting Standard, which is deemed to be the accounting standard of the Ultimate Parent Entity; and
4. the Ultimate Parent Entities of the separate Groups that comprise the Multi-Parented MNE Group shall be the Ultimate Parent Entities of the Multi-Parented MNE Group (when applying the provisions of this Decision in respect of a Multi-Parented MNE Group, references to an Ultimate Parent Entity shall apply, as required, as if they were references to multiple Ultimate Parent Entities).

Article 7
Tax Neutrality and Distribution Regimes

Article 7.1. Ultimate Parent Entity that is a Flow-through Entity

7.1.1 The Pillar Two Income for a Fiscal Year of a Flow-through Entity that is the Ultimate Parent Entity of an MNE Group shall be reduced by the amount of Pillar Two Income attributable to each Ownership Interest in that Ultimate Parent Entity if:

1. the holder of the Ownership Interest is subject to tax on such income for a taxable period that ends within 12 months of the end of the Ultimate Parent Entity's Fiscal Year and:
   1. the holder of the Ownership Interest is subject to tax on the full amount of such income at a nominal rate that equals or exceeds the Minimum Rate; or
   2. it can be reasonably expected that the aggregate amount of Covered Taxes paid by the Ultimate Parent Entity and other Entities that are part of the Tax Transparent Structure and Taxes of the holder of the Ownership Interest on such income equals or exceeds the amount that results from multiplying the full amount of such income by the Minimum Rate; or
2. the direct holder is a natural person that:
   1. is a tax resident in the UAE; and
   2. holds Ownership Interests that, in the aggregate, are a right to 5% or less of the profits and assets of the Ultimate Parent Entity; or
3. the holder is a Governmental Entity, an International Organisation, a Non-profit Organisation, or a Pension Fund that
   1. is resident in the UAE; and
   2. holds Ownership Interests that, in the aggregate, are a right to 5% or less of the profits and assets of the Ultimate Parent Entity.

7.1.2 In computing its Pillar Two Loss for a Fiscal Year, a Flow-through Entity that is the Ultimate Parent Entity of an MNE Group shall reduce its Pillar Two Loss for such Fiscal Year by the amount of Pillar Two Loss attributable to each Ownership Interest, except to the extent that the holders of Ownership Interests are not allowed to use the loss in computing their separate taxable income.

7.1.3 A Flow-through Entity that reduces its Pillar Two Income pursuant to Article 7.1.1 shall reduce its Covered Taxes proportionally.

7.1.4 Articles 7.1.1 through 7.1.3 shall apply to a Permanent Establishment:

1. through which a Flow-Through Entity that is the Ultimate Parent Entity of an MNE Group wholly or partly carries out its business; or
2. through which the business of a Tax Transparent Entity is wholly or partly carried out if the Ultimate Parent Entity's Ownership Interest in that Tax Transparent Entity is held directly or through a Tax Transparent Structure.

Article 7.2. Ultimate Parent Entity subject to Deductible Dividend Regime

7.2.1 To the extent that a Deductible Dividend Regime is allowed under the Federal Decree-Law No. 47 of 2022, for purposes of computing its Pillar Two Income or Loss for a Fiscal year, an Ultimate Parent Entity that is subject to a Deductible Dividend Regime shall reduce (but not below zero) its Pillar Two Income for such Fiscal Year by the amount that is distributed as a Deductible Dividend within 12 months of the end of the Fiscal Year if:

1. the dividend is subject to tax in the hands of the dividend recipient for a taxable period that ends within 12 months of the end of the Ultimate Parent Entity's Fiscal Year, and:
   1. the dividend recipient is subject to tax on such dividend at a nominal rate that equals or exceeds the Minimum Rate;
   2. it can be reasonably expected that the aggregate amount of Covered Taxes paid by the Ultimate Parent Entity and Taxes paid by the dividend recipient on the dividend income equals or exceeds the amount that results from multiplying the full amount of such income by the Minimum Rate; or
   3. the dividend recipient is a natural person and the dividend is a patronage dividend from a supply Cooperative; or
2. the dividend recipient is a natural person that:
   1. is a tax resident in the UAE; and
   2. holds Ownership Interests that, in the aggregate, are a right to 5% or less of the profits and assets of the Ultimate Parent Entity.
3. the dividend recipient is resident in the UPE Jurisdiction and is:
   1. a Governmental Entity,
   2. an International Organisation,
   3. a Non-profit Organisation or
   4. a Pension Fund that is not a Pension Services Entity.

7.2.2 An Ultimate Parent Entity that reduces its Pillar Two Income pursuant to Article 7.2.1 shall reduce its Covered Taxes (other than the Taxes for which the dividend deduction was allowed, including taxes that are based on corporate equity or retained earnings) proportionally and shall reduce its Pillar Two Income by the same amount.

7.2.3 If the Ultimate Parent Entity holds an Ownership Interest in another Constituent Entity subject to the Deductible Dividend Regime (directly or through a chain of such Constituent Entities), Articles 7.2.1 and 7.2.2 shall apply to each other Constituent Entity in the UPE Jurisdiction that is subject to the Deductible Dividend Regime to the extent that its Pillar Two Income is further distributed by the Ultimate Parent Entity to recipients that meet the requirements of Article 7.2.1.

7.2.4 Patronage dividends received by a person who is not a natural person from a supply Cooperative are subject to tax to the extent they reduce an expense or cost that is deductible in the computation of the recipient's taxable income.

Article 7.3. Investment Entity Tax Transparency Election

7.3.1 A Filing Constituent Entity may elect to treat a Constituent Entity that is an Investment Entity as a Tax Transparent Entity if the Constituent Entity-owner located in the UAE is subject to tax under a mark-to-market or similar regime based on the annual changes in the fair value of its Ownership Interest in the Entity and the tax rate applicable to the Constituent Entity-owner with respect to such income equals or exceeds the Minimum Rate. For this purpose, a Constituent Entity that indirectly owns an Ownership Interest in an Investment Entity through a direct Ownership Interest in another Investment Entity is considered to be subject to tax under a mark-to-market or similar regime with respect to the indirect Ownership Interest in the first-mentioned Entity if it is subject to a mark-to-market or similar regime with respect to the direct Ownership Interest in the second-mentioned Entity.

7.3.2 The election under this Article is a Five-Year Election. If the election is revoked, gain or loss from the disposition of an asset or liability held by the Investment Entity shall be determined based on the fair value of the assets or liabilities on the first day of the revocation year.

7.3.3 For purpose of this provision, a Constituent Entity-owner that is a policyholder-owned, regulated mutual insurance company and that owns an Ownership Interest in an Investment Entity is considered to be subject to tax under a mark-to-market or similar regime based on the annual changes in the fair value of its Ownership Interest in the Investment Entity at a rate that equals or exceeds the Minimum Rate.

Article 7.4. Taxable Distribution Method Election

7.4.1 At the election of the Filing Constituent Entity, a Constituent Entity-owner located in the UAE that is not an Investment Entity may apply the Taxable Distribution Method with respect to its Ownership Interest in a Constituent Entity that is an Investment Entity if the Constituent Entity-owner can be reasonably expected to be subject to tax on distributions from the Investment Entity at a tax rate that equals or exceeds the Minimum Rate.

7.4.2 Under the Taxable Distribution Method:

1. distributions and deemed distributions of the Investment Entity's Pillar Two Income are included in the Pillar Two Income of the Constituent Entity-owner located in the UAE (other than an Investment Entity) that received the distribution;
2. the Local Creditable Tax Gross-up is included in the Pillar Two Income and Adjusted Covered Taxes of the Constituent Entity-owner located in the UAE (other than an Investment Entity) that received the distribution; and
3. the Constituent Entity-owner's proportionate share of the Investment Entity's Undistributed Net Pillar Two Income for the Tested Year is treated as Pillar Two Income of the Investment Entity for the Reporting Fiscal Year.

7.4.3 The Undistributed Net Pillar Two Income for a Fiscal Year is the amount of the Investment Entity's Pillar Two Income, if any, for the Tested Year reduced (but not below zero) by:

1. any Covered Taxes of the Investment Entity;
2. distributions and deemed distributions to shareholders other than Constituent Entities that are Investment Entities in the Testing Period;
3. Pillar Two Losses arising in the Testing Period; and
4. Investment Loss Carry-forwards.

7.4.4 Undistributed Net Pillar Two Income for the Tested Year cannot be reduced by distributions or deemed distributions to the extent that such distributions were treated as a reduction to Undistributed Net Pillar Two Income of a previous Tested Year. For purposes of computing Undistributed Net Pillar Two Income, a Pillar Two Loss is reduced to the extent it reduced Undistributed Net Pillar Two Income at the end of a previous Fiscal Year. If a Pillar Two Loss for a Fiscal Year is not reduced to zero before the end of the last Tested Period that includes such Fiscal Year, the remainder becomes an Investment Loss Carry-forward and is reduced in the same manner as a Pillar Two Loss in subsequent Fiscal Years.

7.4.5 For purposes of Article 7.4,

1. the Tested Year is the third year preceding the Reporting Fiscal Year;
2. the Testing Period is the period beginning with the first day of the Tested Year and ending with the last day of the Reporting Fiscal Year that the Ownership Interest was held by a Group Entity;
3. a deemed distribution arises when a direct or indirect Ownership Interest in the Investment Entity is transferred to a non-Group Entity and is equal to the proportionate share of the Undistributed Net Pillar Two Income attributable to such Ownership Interest on the date of such transfer (determined without regard to the deemed distribution); and
4. the Local Creditable Tax Gross-up is the amount of Covered Taxes incurred by the Investment Entity that is allowed as a credit against the Constituent Entity-owner's tax liability arising in connection with a distribution from the Investment Entity.

7.4.6 The election under this Article is a Five-Year Election. If the election is revoked, Constituent Entity-owner's proportionate share of the Investment Entity's Undistributed Net Pillar Two Income for the Tested Year at the end of the Fiscal Year preceding the revocation year is treated as Pillar Two Income of the Investment Entity for the revocation year.

7.4.7 The Investment Entity is not subject to this Decision on the Undistributed Net Pillar Two Income treated as Pillar Two Income.

Article 7.5. Equity Investment Inclusion Election and Qualified Flow-through Tax Benefits

7.5.1 A Filing Constituent Entity may make an Equity Investment Inclusion Election to include in the Pillar Two Income or Loss of a Constituent Entity, the accounting gain, profit, or loss with respect to any:

1. fair value gains and losses and impairments on that Ownership Interest where the owner:
   1. is taxable on a mark-to-market basis or on the impairment, provided that the tax consequences of the mark-to-market movements or impairments on the Ownership Interests are reflected in the income tax expense; or
   2. is taxable on a realization basis and the income tax expense includes deferred tax expense on the mark-to-market movements or impairments on the Ownership Interests;
2. the profit and loss attributable to that Ownership Interest where the interest is in the Tax Transparent Entity and the owner accounts for the interest using the equity method; and
3. the dispositions of that Ownership Interest which give rise to gains or losses that are included in the owner's domestic taxable income, excluding any gain fully offset, and the proportionate share of any gain partially offset, by any deduction or other similar relief particular to the type of gain.

7.5.2 The accounting gain, profit, or loss included in the Pillar Two Income or Loss pursuant to Article 7.5.1 shall be adjusted in accordance with Article 3.2 except for Article 3.2.1(c).

7.5.3 Notwithstanding Article 4.1.3 (a) and 4.4.1(a), where an Equity Investment Inclusion Election is made, all current and deferred tax expense or benefits that are derived from the accounting gain, profit, or loss included in the Pillar Two Income or Loss in accordance with Article 7.5.1 shall be included in the computation of Adjusted Covered Taxes subject to the relevant provisions of this Decision.

7.5.4 An owner subject to the Equity Investment Inclusion Election shall not apply Articles 7.5.1, 7.5.2 and 7.5.3 to a Qualified Flow-through Tax Benefit that flows through a Qualified Ownership Interest. Instead, the following provisions shall apply:

1. the amount of a Qualified Flow-through Tax Benefit will be allowed as a positive amount in the Adjusted Covered Taxes of the direct owner of a Qualified Ownership Interest or an indirect owner of such an interest through a chain of Tax Transparent Entities that are not Constituent Entities of the MNE Group to the extent the Qualified Flow-through Tax Benefit was treated for financial accounting purposes as reducing a tax expense;
2. the amount of a Qualified Flow-through Tax Benefit is equal to the amount of the tax credit or tax-deductible loss that have flowed through to the owner through a Qualified Ownership Interest to the extent that it reduces the owner's investment in the Qualified Ownership Interest by:
   1. the amount of such tax credit or tax loss:
   2. the amount of any distributions (including a return of capital) to the owner; or
   3. the amount of proceeds from a sale of all or part of the Qualified Ownership Interest.
3. for the purposes of paragraph (b), a tax deductible loss is equal to the amount of the tax loss multiplied by the statutory rate applicable to the owner;
4. the provisions of this Article 7.5.4 shall not cause the owner's investment to be less than zero and accordingly no amount shall be treated as reducing the investment to the extent it would reduce the investment below zero;
5. where the owner's investment has been reduced to zero due to the obtention of tax credits or tax deductible losses through a Qualified Ownership Interest, or after receiving distributions (including a return of capital) or proceeds from the sale of all or part of the Qualified Ownership Interest:
   1. any subsequent amount of any of tax credits or tax deductible losses obtained by the owner through a Qualified Ownership Interest shall be treated as a negative amount in the owner's Adjusted Covered Taxes; and
   2. any subsequent amount of any distributions (including a return of capital), proceeds from the sale of all or part of the Qualified Ownership Interest, or Qualified Refundable Tax Credits obtained through the Qualified Ownership Interest shall be treated as a negative amount in the owner's Adjusted Covered Taxes to the extent of the amount of any Qualified Flow-through Tax Benefit that flowed through the Qualified Ownership Interest and that were treated as a positive amount in the owner's Adjusted Covered Taxes.

7.5.5 An owner subject to Article 7.5.4 that uses the proportional amortization method to account for its Qualified Ownership Interest for financial accounting purposes shall apply such method for determining the amount of investment that is recovered each year. Owners that do not use the proportional amortization method may irrevocably elect to apply this methodology provided that the election is made in the first Fiscal Year in which they acquire the Qualified Ownership Interest or are subject to Pillar Two Rules.

7.5.6 Where the proportional amortization method is applied in accordance with Article 7.5.5, any tax credit or tax loss that flows through or any distributions (including a return of capital) or proceeds from sales shall be treated as a reduction to the investment in proportion to the expected tax benefits ratio.

7.5.7 The expected tax benefits ratio is the ratio of the tax credits and tax losses that flowed through or are received in the Fiscal Year to the total of such items that are expected to flow through or are received in respect of the Qualified Ownership Interest over the term of the investment.

7.5.8 The amount of tax credits or tax losses that flow through or distributions (including a return of capital) or proceeds from sales received, in respect of the Qualified Ownership Interest, in excess of the reduction to the investment shall not be included as a positive amount in the owner's Adjusted Covered Taxes.

Article 8
Filing of Top-Up Tax Return and Safe Harbours

Article 8.1 Top-up Tax Return Filing

8.1.1 Each Constituent Entity, Joint Venture and JV Subsidiary located in the UAE shall file a Top-up Tax Return with the Federal Tax Authority. The return may be filed by either the Constituent Entity, Joint Venture or JV Subsidiary itself or by a Domestic Designated Filing Entity on its behalf.

8.1.2 The Top-up Tax Return shall be filed in the manner specified by the Federal Tax Authority no later than 15 months after the last day of the Reporting Fiscal Year or 18 months after the last day of the Reporting Fiscal Year that is the first Transition Year of any Constituent Entity of the MNE Group.

8.1.3 The Top-up Tax Return developed by the Federal Tax Authority shall require the equivalent information and reporting requirements set out in the Pillar Two Information Return. The Constituent Entities, Joint Ventures, JV Subsidiaries or Domestic Designated Filing Entity may choose to apply the simplified Jurisdictional reporting framework provided in the Pillar Two Information Return.

Article 8.2. Safe Harbours

8.2.1 Transitional CBCR Safe Harbour

8.2.1.1 During the Transition Period, at the election of the Filing Constituent Entity, and notwithstanding Article 5, the Jurisdictional Top-up Tax of the UAE shall be deemed to be zero for a Fiscal Year if:

1. the MNE Group reports Total Revenue of less than EUR 10 million and Profit (Loss) before Income Tax of less than EUR 1 million in the UAE on its Qualified CbC Report for the Fiscal Year;
2. the MNE Group has a Simplified Effective Tax Rate that is equal to or greater than the Transition Rate in the UAE for the Fiscal Year; or
3. the MNE Group's Profit (Loss) before Income Tax in the UAE is equal to or less than the Substance-based Income Exclusion amount as calculated under Articles 5.3 and 9.2, for entities reported in the UAE in the Country-by-Country Report.

8.2.1.2 Article 8.2.1.1 shall apply to the Joint Venture and JV Subsidiaries as if they were Constituent Entities of a separate MNE Group, except that the Pillar Two Income or Loss and Total Revenue would be the ones reported in their Qualified Financial Statements.

8.2.1.3 The following adjustments shall be made for purposes of Article 8.2.1.1:

1. where the Ultimate Parent Entity is a Flow-through Entity or subject to a Deductible Dividend Regime, the Profit (Loss) before Income Tax (and any associated taxes) of that Entity shall be reduced to the extent where such amount is attributable to or distributed as a result of an Ownership Interest held by a Qualified Person;
2. a Net Unrealised Fair Value Loss shall be excluded from Profit (Loss) Before Income Tax if that loss exceeds EUR 50 million in the UAE;
3. the Profit (Loss) before Income Tax, Total Revenue and Taxes of an Investment Entity shall be reflected only in the Jurisdictions of its direct Constituent Entity-owners in proportion to their Ownership Interest;
4. in the case of a Hybrid Arbitrage Arrangement entered into after 15 December 2022:
   1. excluding any expense or loss from the Profit (Loss) before Income Tax of the UAE arising from a Deduction Non-inclusion Arrangement or Duplicate Loss Arrangement; and
   2. excluding any income tax expense from the income tax expense of the Entities reported in the UAE arising from a Duplicate Tax Recognition Arrangement.
5. the amount of uncertain tax positions shall be removed from the income tax expense; and
6. where a loss arising in a Permanent Establishment is reflected in the Profit (Loss) before Income Tax of the Jurisdiction where the Permanent Establishment is reported and such loss is also reflected in the Profit (Loss) before Income Tax of the Jurisdiction of the head office or Main Entity, the amount of the loss shall be removed from the Profit (Loss) before Income Tax of the Jurisdiction of the head office or Main Entity;
7. taxes that are not Covered Taxes shall be removed from the income tax expense;
8. the amount of the income tax expense from taxes imposed on a Permanent Establishment by the Jurisdiction of the Permanent Establishment shall be allocated exclusively to that Jurisdiction;

8.2.1.4 Article 8.2.1.1 shall not apply where:

1. the UAE is the UPE Jurisdiction and the Ultimate Parent Entity is a Flow-through Entity unless all the Ownership Interests in the Ultimate Parent Entity are held by Qualified Persons;
2. the Top-up Tax that may arise from Stateless Reverse Hybrid Entities subject to the provisions of this Decision;
3. Multi-parented MNE Groups where a single Qualified CbC Report does not include the information of the combined groups;
4. the Top-up Tax computation of Constituent Entities subject to the provisions of this Decision have not benefited from Article 8.2.1.1 or an equivalent foreign provision in a previous Fiscal Year in which the MNE Group is subject to the Pillar Two Rules, unless the MNE Group did not have any Constituent Entities in the UAE in the previous year; and
5. the MNE Group uses data from different sources of Qualified Financial Statements for that same Entity or Permanent Establishment in the calculations required in Article 8.2.1.

8.2.1.5 Notwithstanding Article 2.3, Article 8.2.1.1 applies to the Top-up Tax of the Constituent Entities located in the UAE irrespective of whether an Investment Entity is reported in the UAE in the Country-by-Country Report.

8.2.1.6 Article 8.2.1.1(a) does not apply where the Ultimate Parent Entity controls Entities located in the UAE that are not consolidated on a line-by-line basis because they are held for sale and the sum of the revenue of such Entities when combined with the Total Revenue in the UAE equals or exceeds EUR 10 million.

8.2.1.7 For purposes of Article 8.2.1.1(c), the Substance-based Income Exclusion shall not take into account the payroll and tangible assets of:

1. Entities not reported in the UAE in the Country-by-Country Report;
2. Excluded Entities; and
3. Constituent Entities that are located in different Jurisdictions in accordance with this Decision and the Country-by-Country Report.

8.2.1.8 Where the MNE Group is not required to file a Qualified CBC Report, Article 8.2.1.1 may apply provided that the MNE Group includes in its Top-up Tax Return for the Fiscal Year the data from Qualified Financial Statements that would have been reported as Total Revenues and Profit (Loss) Before Income Tax in a Qualified CBC Report and such data is used for purposes of the calculations of pursuant to Article 8.2.1.1.

8.2.1.9 Amounts from intra-group transactions treated as income in the Qualified Financial Statements of the recipient and as an expense in the Qualified Financial Statements of the payer shall be included in Total Revenues and Profit (Loss) Before Tax for the purpose of the computations in Article 8.2.1.1 without further adjustments, irrespective of the treatment of these transactions for tax purposes in the Jurisdiction of the recipient or the payer or in the Country-by-Country Report.

8.2.1.10 Where the financial statements used to prepare the Country-by-Country Report contains assets that were valued based on purchase price allocation due to the acquisition of a Controlling Interest as a result of a business combination, the Country-by-Country Report will be considered to be prepared and filed using Qualified Financial Statements provided that:

1. the MNE Group has not submitted a Country-by-Country Report for a Fiscal Year beginning after 31 December 2022 that was based on the Constituent Entity's reporting package or separate financial statements without the purchase price allocation adjustments, except where the Constituent Entity was required by law or regulation to change its reporting package or separate financial statements to include purchase price allocation adjustments; and
2. any reduction to the Constituent Entity's income attributable to an impairment of goodwill related to transactions entered into after 30 November 2021 must be added back to the Profit (Loss) before Income Tax:
   1. for purposes of applying the test in Article 8.2.1.1(c); and
   2. for purposes of applying the test in Article 8.2.1.1(b), but only if the financial accounts do not also have a reversal of deferred tax liability or recognition or increase of a deferred tax asset in respect of the impairment of goodwill.

8.2.1.11 For purposes of the provisions in Article 8.2.1:

1. Deduction Non-inclusion Arrangement means an arrangement under which one Constituent Entity directly or indirectly provides credit or otherwise makes an investment in another Constituent Entity that results in an expense or loss in the financial statements of a Constituent Entity to the extent that:
   1. there is no commensurate increase in the revenue or gain in the financial statements of the Constituent Entity counterparty; or
   2. the Constituent Entity counterparty is not reasonably expected over the life of the arrangement to have a commensurate increase in its taxable income.

   An arrangement will not be a Deduction Non-inclusion Arrangement to the extent that the relevant expense or loss is solely with respect to Additional Tier One Capital.

2. Duplicate Loss Arrangement means an arrangement that results in an expense or loss being included in the financial statement of a Constituent Entity to the extent that:
   1. the expense or loss is also being included as an expense or loss in the financial statement of another Constituent Entity; or
   2. the arrangement also gives rise to a duplicate amount that is deductible for purposes of determining the taxable income of another Constituent Entity in another Jurisdiction.
3. Duplicate Tax Recognition Arrangement means an arrangement that results in more than one Constituent Entity including part or all of the same income tax expense in its:
   1. Adjusted Covered Taxes; or
   2. Simplified Effective Tax Rate for the purposes of applying the Transitional CbCR Safe Harbour;

   unless such arrangement also results in the income subject to the tax being included in the relevant financial statements of each such Constituent Entity. An arrangement will not be a Duplicate Tax Recognition Arrangement if it arises solely because the Simplified Effective Tax Rate of a Constituent Entity does not require adjustments for income tax expenses which would be allocated to another Constituent Entity in determining the first Constituent Entity's Adjusted Covered Taxes.

4. Hybrid Arbitrage Arrangement means a:
   1. Deduction Non-inclusion Arrangement
   2. Duplicate Loss Arrangement; or
   3. Duplicate Tax Recognition Arrangement.
5. Net Unrealised Fair Value Loss means the sum of all losses, as reduced by any gains, which arise from changes in the fair value of Ownership Interests (except for Portfolio Shareholdings).
6. Profit (Loss) Before Income Tax means an MNE Group's Profit (Loss) Before Income Tax in a Jurisdiction as reported on its Qualified CbC Report.
7. Qualified Financial Statements means:
   1. the accounts used to prepare the Consolidated Financial Statements of the Ultimate Parent Entity;
   2. separate financial statements of each Constituent Entity provided they are prepared in accordance with either an Acceptable Financial Accounting Standard or an Authorised Financial Accounting Standard if the information contained in such statements is maintained based on that accounting standard and it is reliable; or
   3. in the case of a Constituent Entity that is not included in the Consolidated Financial Statements of the Ultimate Parent Entity on a line-by-line basis solely due to size or materiality grounds, the financial accounts of that Constituent Entity that are used for preparation of the MNE Group's Country-by-Country Report.
8. Qualified CbC Report means a Country-by-Country Report prepared and filed using Qualified Financial Statements irrespective whether different Qualified Financial Statements are used for different Jurisdictions tested under Article 8.2.1.1.
9. Qualified Person means
   1. in respect of an Ultimate Parent Entity that is a Flow-through Entity, a holder described in Article 7.1.1 (a) to (c); and
   2. in respect of an Ultimate Parent Entity that is subject to Deductible Dividend Regime, a holder described in Article 7.2.1 (a) to (c).
10. Total Revenue means an MNE Group's Total Revenues in a Jurisdiction as reported on its Qualified CbC Report.
11. Simplified Covered Taxes means a Jurisdiction's income tax expense as reported in the MNE Group's Qualified Financial Statements after any adjustment required by Article 8.2.1.
12. Simplified Effective Tax Rate means the effective tax rate calculated by dividing the Jurisdiction's Simplified Covered Taxes by its Profit (Loss) Before Income Tax as reported on the MNE Group's Qualified CbC Report.
13. Transition Period means the period that covers all of the Fiscal Years that begin before 1 January 2027 and end before 1 July 2028.
14. Transition Rate means:
    1. 16% for Fiscal Years beginning in 2025;
    2. 17% for Fiscal Years beginning in 2026.

8.2.2 Simplified Calculations Safe Harbour

8.2.2.1 At the election of the Filing Constituent Entity, and notwithstanding Article 5, the Top-up Tax (other than Additional Current Top-up Tax) for the UAE shall be deemed to be zero for a Fiscal Year provided that the MNE Group meets one of the following tests with respect to its operations in the UAE:

1. Routine Profits Test;
2. De Minimis Test; or
3. Effective Tax Rate Test.

8.2.2.2 A Constituent Entity may use a Simplified Income Calculation, Simplified Revenue Calculation, or a Simplified Tax Calculation for the purposes of determining whether any of the tests in Article 8.2.2.1 are met in the Fiscal Year.

The Simplified Income Calculation, Simplified Revenue Calculation and Simplified Tax Calculation of Constituent Entities shall be combined with the Pillar Two computations of Constituent Entities that do not meet the definition of Non-material Constituent Entities in Article 8.2.2.7 to determine whether the UAE meets any of the tests in Article 8.2.2.3.

8.2.2.3 An MNE Groups meets:

1. the Routine Profits Test if its Pillar Two Income in the UAE as determined under the Simplified Income Calculation is equal or less than the amount that results from computing the Substance-based Income Exclusion for the UAE in accordance with Article 5.3;
2. the De Minimis Test if the Average Pillar Two Revenue in the UAE as determined under the Simplified Revenue Calculation is less than EUR 10 million, and the Average Pillar Two Income in the UAE is less than EUR 1 million or has a loss as determined under the Simplified Income Calculation in accordance with Article 5.5; or
3. the Effective Tax Rate Test if the Effective Tax Rate of the UAE as determined under the Simplified Income Calculation and the Simplified Tax Calculation, is at least 15% as determined in accordance with Article 5.1.1.

8.2.2.4 The Simplified Revenue Calculation includes the following calculations:

1. a Filing Constituent Entity may make an Annual Election so the Pillar Two Revenue of a Non-Material Constituent Entity is equal to the Total Revenue of the Non-Material Constituent Entity as determined in accordance with the Relevant CBC Regulations.

8.2.2.5 The Simplified Income Calculation includes the following calculations:

1. a Filing Constituent Entity may make an Annual Election so the Pillar Two Income or Loss of a Non-Material Constituent Entity is equal to the Total Revenue of the Non-Material Constituent Entity as determined in accordance with the Relevant CBC Regulations.

8.2.2.6 The Simplified Tax Calculation includes the following calculations:

1. a Filing Constituent Entity may make an Annual Election so the Adjusted Covered Taxes of a Non-Material Constituent Entity is equal to Income Tax Accrued (current year) of the Non-Material Constituent Entity as determined in accordance with the Relevant CBC Regulations.

8.2.2.7 For purposes of the provisions in Article 8.2.2:

1. Non-material Constituent Entity means an Entity, including its Permanent Establishments, that is not consolidated on a line-by-line basis in the Consolidated Financial Statements of the Ultimate Parent Entity solely on size or materiality grounds and is considered a Constituent Entity in accordance with Article 1.2.2, provided that:
   1. the Consolidated Financial Statements are those that are described in paragraphs (a) or (c) of the definition provided under Article 18.1;
   2. the Consolidated Financial Statements are externally audited; and
   3. in the case of an Entity with a Total Revenue that exceeds EUR 50 million, its financial accounts that are used to complete the CbC Report are prepared in accordance with an Acceptable Financial Accounting Standard or an Authorised Financial Accounting Standard.
2. Relevant CbC Regulations means the Country-by-Country Reporting regulations of the UPE Jurisdiction or of the surrogate parent entity Jurisdiction if a Country-by-Country Report is not filed in the UPE Jurisdiction. If the UPE Jurisdiction does not have Country-by-Country Report legislation and an MNE Group is not required to file a Country-by-Country Report in any Jurisdiction, Relevant CbC Regulations shall mean the OECD BEPS Action 13 Final Report and the OECD Guidance on the Implementation of Country-by-Country Reporting.

8.2.3 Disapplication of a Safe Harbour

8.2.3.1 An election made under the provisions of Article 8.2 shall not apply in circumstances where:

1. Top-up Tax could be charged under the provisions of this Decision if the Effective Tax Rate for the UAE computed in accordance with Article 5 was below the Minimum Rate; and
2. the Federal Tax Authority notifies the Liable Constituent Entity (or Entities) within 36 months after the filing of the Top-up Tax Return of specific facts and circumstances that may have materially affected the eligibility of the Constituent Entities located in the UAE for the relevant safe harbour and invites the Liable Constituent Entity (or Entities) to clarify within six months the effect of those facts and circumstances on the eligibility of those Constituent Entities for that safe harbour; and
3. the Liable Constituent Entity (or Entities) fail(s) to demonstrate within the response period that those facts and circumstances did not materially affect the eligibility of the Constituent Entities for the relevant safe harbour.

8.2.3.2 For purposes of Article 8.2.3 (b), the Federal Tax Authority may notify some of the Liable Constituent Entities instead of all of the Liable Constituent Entities in cases where it is difficult, under particular circumstances, to notify all the Liable Constituent Entities.

Article 9
Transition rules

Article 9.1. Tax Attributes Upon Transition

9.1.1 When determining the Effective Tax Rate for the UAE in a Transition Year, and for each subsequent year, the MNE Group shall take into account all of the deferred tax assets and deferred tax liabilities reflected or disclosed in the financial accounts of all of the Constituent Entities in the UAE for the Transition Year. Such deferred tax assets and liabilities must be taken into account at the lower of the Minimum Rate or the applicable domestic tax rate. A deferred tax asset that has been recorded at a rate lower than the Minimum Rate may be taken into account at the Minimum Rate if the taxpayer can demonstrate that the deferred tax asset is attributable to a Pillar Two Loss. For purposes of applying this Article, the impact of any valuation adjustment, or accounting recognition adjustment with respect to a deferred tax asset is disregarded.

9.1.2 Deferred tax assets arising from items excluded from the computation of Pillar Two Income or Loss under Article 3, including those that derive from deductions that are not allowed for accounting purposes, must be excluded from the Article 9.1.1 computation when such deferred tax assets are generated in a transaction that takes place after 30 November 2021.

9.1.3 In the case of a domestic or cross-border transfer of assets between Constituent Entities after 30 November 2021 and before the commencement of a Transition Year, the Pillar Two tax basis in the acquired assets (other than inventory) shall be based upon the disposing Entity's carrying value of the transferred assets upon disposition with the deferred tax assets and liabilities brought into the application of the Pillar Two Rules determined on that basis.

9.1.4 For purposes of Article 9.1.1:

1. a deemed deferred tax asset from losses that have not been recognised due to an accounting recognition adjustment or valuation allowance, or because the recognition criteria was not met, may be generated;
2. the deferred tax assets and deferred tax liabilities shall not be subject to any adjustments under Article 4.4.1(a), (b), (c), or (d), or Article 4.4.4, except for the adjustments referred to in Article 9.1.2;
3. notwithstanding Article 4.4.1(e), deferred tax assets that derive from a tax credit carry-forward shall be taken into account and their amount shall be equal to the deferred tax assets accrued in the financial accounts if the tax rate used to determine the deferred tax assets is below the Minimum Rate or, in any other case, such deferred tax assets shall be determined in accordance with the following formula:

Where:

1. Deferred tax assets in the financial accounts means the deferred tax assets reflected or disclosed in the financial accounts attributable to a tax credit carry-forward arising in the UAE.
2. Applicable domestic tax rate means the tax rate applicable to the Constituent Entity in the Fiscal Year preceding the Transition Year.
3. Minimum rate means the rate as defined by Article 18.1.

9.1.5 For purposes of Article 9.1.4 (c), the following provisions apply where the tax rate applicable to the Constituent Entity changes in a subsequent Fiscal Year:

1. the formula must be re-applied to the outstanding balance of the tax credit in the financial accounts to determine the revised deferred tax asset for purposes of this Decision;
2. the change in the amount of the deferred tax asset resulting from re-application of the formula in Article 9.1.5 shall not be treated as deferred tax expense included in the computation of Adjusted Covered Taxes in the re-application year; and
3. the deferred tax expense for the re-application year and subsequent years shall be determined by reference to the amount of the reversal of the deferred tax asset after re-application of the formula in Article 9.1.5.

9.1.6 The Transition Year referred to in Article 9.1.3 is the Transition Year of the disposing Constituent Entity. The Transition Year of the disposing Constituent Entity is the first year in which its low-taxed income becomes subject to charge under the Pillar Two Rules irrespective of when other Constituent Entities in the UAE are subject to the Pillar Two Rules.

9.1.7 For purposes of Article 9.1.3, a transfer of assets includes but is not limited to:

1. any transfer of rights to an item of economic value in which the acquiring Entity creates or increases the carrying value of an asset in its financial accounts and the disposing Entity recognises the corresponding amount of income after 30 November 2021 and before the commencement of a Transition Year;
2. transfers or deemed transfers of assets within the same Entity;
3. sale of an asset;
4. capital leases, which are accounted for in the same or similar manner as a purchase of an asset;
5. licenses that are effectively treated as a sale for accounting purposes;
6. transfers of assets through a sale of a Controlling Interest;
7. prepayment of royalties or rents, where the licensor/lessor records the prepayment as income and the licensee/lessee capitalizes and amortizes the asset in its financial accounts;
8. total return swaps where the underlying asset is transferred to the financial accounts of the Entity that acquired the rights to income and capital gains generated by an underlying asset;
9. migration of an Entity/Entities where an MNE Group receives a step-up in the tax basis or carrying value (e.g. based on fair value of assets) of the relocated assets; and
10. changes to fair value accounting where the Entity records the relevant gains or losses from fair value changes of the underlying asset and corresponding adjustments to the carrying value of the asset.

9.1.8 Article 9.1.3 does not apply to a lease, license, or a total return swap where the transacting parties account for the income and corresponding expense items in the same Fiscal Years.

9.1.9 For purposes of Article 9.1.3, the following provisions shall apply for purposes of determining the Pillar Two tax basis in the acquired assets that are transferred between Constituent Entities after 30 November 2021:

1. the carrying value of the transferred assets may be increased by capitalised expenditures or decreased by amortization or depreciation that arise after the transaction and before the beginning of the Transition Year, in accordance with the accounting standard used in the financial statements used for purposes of determining the Pillar Two Income or Loss;
2. any increased depreciation or amortization attributable to recording assets at fair value in the financial accounting of the acquiring Entity must be excluded from the computation of the Pillar Two Income or Loss; and
3. where an acquiring Constituent Entity recorded the asset acquired at fair value in its financial accounts, it may instead use the carrying value of that asset reflected in its financial accounts in all subsequent years if it would otherwise be entitled to take into account a deferred tax asset equal to the Minimum Rate multiplied by the difference in the local tax basis in the asset and the Pillar Two carrying value of the asset determined under Article 9.1.3.

Cabinet Resolution No. (142) of 2024

Concerning the Imposition of a Supplementary Tax on Multinational Enterprises

The Cabinet:

Having reviewed the Constitution,

And Federal Law No. (1) of 1972 concerning the Competencies of Ministries and Powers of Ministers, and its amendments,

And Federal Decree-Law No. (28) of 2022 on Tax Procedures, and its amendments,

And Federal Decree-Law No. (47) of 2022 on the Taxation of Corporations and Businesses, and its amendments,

And based on the proposal of the Minister of Finance and the approval of the Cabinet,

Has decided:

Article One

Imposition of the Supplementary Tax

The Supplementary Tax shall be imposed on Multinational Enterprises in accordance with the cases, provisions, conditions, rules, controls, and procedures set out in the Annex.

Article Two

Applicability of the Resolution with respect to Fiscal Years

This Resolution shall apply to Fiscal Years starting on or after 01 January 2025.

Article Three

Entry into Force and Publication

The provisions of this Resolution shall come into force on 01 January 2025, and shall be published in the Official Gazette.

Issued by us:

On: 30 / Jumada al-Akhirah / 1446 H

Corresponding to: 31 / December / 2024 AD

Cases, Provisions, Conditions, Rules, Controls, and Procedures for

the Imposition of the Supplementary Tax on Multinational Enterprises

Annexed to Cabinet Resolution No. (142) of 2024

Article (1)

Scope of Application

1-1 Scope of Application of this Resolution

1-1-1 This Resolution applies to the Constituent Entities of a Multinational Enterprise Group that has annual revenues of EUR 750 (seven hundred fifty) million or more in the Consolidated Financial Statements of the Ultimate Parent Entity in at least two of the four Fiscal Years immediately preceding the tested Fiscal Year. Article 1.6 contains other rules that modify the application of the consolidated revenue threshold in certain cases.

1-1-2 If one or more of the Fiscal Years of the MNE Group considered for the purposes of Article 1.1.1 is not twelve (12) months long, the threshold of EUR 750 (seven hundred fifty) million for each of those Fiscal Years shall be adjusted proportionally to correspond with the duration of the respective Fiscal Year.

1-2 MNE Group and Group

1-2-1 MNE Group means any Group that includes at least one Entity or Permanent Establishment that is not located in the country where the Ultimate Parent Entity of the MNE Group is located.

1-2-2 Group means a collection of Entities that are related through ownership or control such that the assets, liabilities, income, expenses, and cash flows of those Entities are:

(a) included in the Consolidated Financial Statements of the Ultimate Parent Entity.

(b) or excluded from the Consolidated Financial Statements of the Ultimate Parent Entity solely on grounds of size, materiality, or that the entity is held for sale.

1-2-3 Group also means an Entity that is located in a country and has one or more Permanent Establishments located in other countries, provided that the Entity is not part of another Group as described in Article 1.2.2.

1-3 Constituent Entity

1-3-1 A Constituent Entity is any of the following:

(a) Any Entity included in a Group.

(b) Any Permanent Establishment of a Main Entity to which paragraph (a) applies.

1-3-2 A Permanent Establishment that is a Constituent Entity under paragraph (b) above shall be treated as separate from the Main Entity and from any other Permanent Establishment of that Main Entity.

1-3-3 An Excluded Entity is not a Constituent Entity.

1-4 Ultimate Parent Entity

1-4-1 Ultimate Parent Entity means either of the following two Entities:

(a) An Entity that meets the following two conditions:

1. It owns, directly or indirectly, a Controlling Interest in any other Entity.
2. It is not owned, through a Controlling Interest, directly or indirectly, by another Entity.

(b) The Main Entity of a Group that falls within the definition in Article 1.2.3.

1-5 Excluded Entity

1-5-1 The following Entities are considered Excluded Entities:

(a) A Governmental Entity.

(b) An International Organisation.

(c) A Non-profit Organisation.

(d) A Pension Fund.

(e) An Investment Fund that is an Ultimate Parent Entity.

(f) A Real Estate Investment Vehicle that is an Ultimate Parent Entity.

1-5-2 The following Entities are also considered Excluded Entities:

(a) An Entity of which at least 95% of its value is owned (directly or through a chain of Excluded Entities) by one or more Excluded Entities referred to in Article 1.5.1 (excluding a Pension Services Entity), provided that this Entity meets one or both of the following conditions:

1. It operates exclusively or almost exclusively to hold assets or invest funds for the benefit of the Excluded Entity or Entities.
2. It only carries out activities that are ancillary to those carried out by the Excluded Entity or Entities.

(b) An Entity of which at least 85% of its value is owned (directly or through a chain of Excluded Entities) by one or more Excluded Entities referred to in Article 1.5.1 (excluding a Pension Services Entity), provided that substantially all of the Entity's income consists of Excluded Dividends or Excluded Equity Gains or Losses that are excluded from the calculation of GloBE Income or Loss in accordance with paragraph (b) or paragraph (c) of Article 3.2.1.

1-5-3 The Filing Constituent Entity may elect not to treat an entity as an Excluded Entity under Articles 1.5.1 and 1.5.2. An election under this Article is a five-year election.

1-6 Sovereign Wealth Funds

1-6-1 Notwithstanding Article 1.4, a Sovereign Wealth Fund that meets the definition of a Governmental Entity is not considered an Ultimate Parent Entity.

1-6-2 If a Sovereign Wealth Fund referred to in Article 1.6.1 holds a direct Controlling Interest in an Entity, that Entity shall be considered the Ultimate Parent Entity of the Group provided it meets either of the following two conditions:

(a) It owns, directly or indirectly, a Controlling Interest in another Entity.

(b) It is a Main Entity located in a country and has one or more Permanent Establishments located in other countries, provided that the Main Entity is not part of another Group referred to in Article 1.2.2 or paragraph (a) of Article 1.6.2.

1-6-3 For the purposes of Article 1.6.2 and notwithstanding Article 1.2.2, a Group means the Ultimate Parent Entity referred to in Article 1.6.2 in addition to all of the following:

(a) The Entities and Permanent Establishments referred to in paragraph (a) or (b) of Article 1.6.2.

(b) The Entities that would have been excluded solely on the basis of size, materiality, or that the Entity is held for sale, if the Ultimate Parent Entity referred to in Article 1.6.2 were required to prepare Consolidated Financial Statements.

1-7 Permanent Establishments of Excluded Entities

1-7-1 If the Main Entity is an Excluded Entity in accordance with Article 1.5.1, its Permanent Establishments shall be treated as Excluded Entities.

1-7-2 For the purposes of Article 1.5.2, the activities performed by the Permanent Establishments of the Main Entity shall be taken into account for the purposes of determining whether the Main Entity meets the requirements set out in sub-paragraphs (1) and (2) of paragraph (a) or paragraph (b) of Article 1.5.2. If those requirements are met, the Permanent Establishments of the Main Entity shall also be considered Excluded Entities in accordance with Article 1.5.2.

1-8 Excluded Entity Owned by an Investment Fund or a Real Estate Investment Vehicle that is not a Group Entity

1-8-1 For the purposes of Article 1.5.2, the condition that a Group Entity must be owned (directly or through a chain of Excluded Entities) by one or more Excluded Entities referred to in Article 1.5.1 is considered met if the first-mentioned Entity is owned by an Investment Fund or a Real Estate Investment Vehicle that is not a Group Entity.

1-9 Entities Owned by Non-profit Organisations

1-9-1 An Entity owned by a Non-profit Organisation shall be treated as an Excluded Entity provided that all of the following conditions are met:

(a) One or more Non-profit Organisations own, directly or indirectly, 100% of the value of the Entity.

(b) The total revenue of the Group of which the Entity is a member is less than EUR 750 (seven hundred fifty) million if the revenues of Non-profit Organisations and Entities excluded under Article 1.5.2 are not taken into account.

(c) The revenue of the Entity and all other Entities that are not Non-profit Organisations and not Excluded Entities under Article 1.5.2, is less than 25% of the revenue of the MNE Group.

1-9-2 If the duration of the Fiscal Year of the MNE Group is not twelve (12) months, the calculation under paragraph (b) of Article 1.9.1 shall be adjusted in accordance with Article 1.1.2.

Article (2)

Tax Imposition Provisions

2-1 The following Entities must pay the Supplementary Tax for the Fiscal Year:

(a) Constituent Entities located in the State during that Fiscal Year, including Entities that are members of a Minority-Owned Subgroup.

(b) Joint Ventures and Joint Venture Affiliates located in the State during that Fiscal Year.

(c) Stateless Constituent Entities established under the laws of the State that are Reverse Hybrid Entities with respect to any of their GloBE Income or Loss as allocated and calculated in accordance with this Resolution.

2-2 Notwithstanding Article 2.1, the following provisions shall apply:

(a) The Constituent Entities of a Domestic Main Group and a Domestic Minority-Owned Subgroup may designate a Local Designated Filing Entity to pay the Supplementary Tax on behalf of the members of their domestic groups.

(b) The Joint Venture and Joint Venture Affiliates in a Domestic Joint Venture Group may designate a Local Designated Filing Entity to pay the Supplementary Tax on behalf of the members of their Domestic Joint Venture Group.

(c) The Reverse Hybrid Entities referred to in paragraph (c) of Article 2.1 may designate a Local Designated Filing Entity, which is a member of the Domestic Main Group or the Domestic Minority-Owned Subgroup, to pay their Supplementary Tax.

2-3 An Investment Entity located in the State shall not be subject to the Supplementary Tax.

Article (3)

Calculation of GloBE Income or Loss

3-1 Financial Accounts for Determining GloBE Income or Loss

3-1-1 The GloBE Income or Loss of each Constituent Entity is the Financial Accounting Net Income or Loss determined for the Constituent Entity for the Fiscal Year, adjusted by the items listed in Articles 3.2 to 3.5.

3-1-2 The Financial Accounting Net Income or Loss of the Constituent Entity for the Fiscal Year shall be determined in accordance with its separate financial statements prepared in accordance with International Financial Reporting Standards (IFRS), provided that all of the following are met:

(a) That all Constituent Entities located in the State are required to prepare separate financial statements in accordance with Federal Decree-Law No. (47) of 2022 or applicable laws in the State.

(b) That all separate financial statements of Constituent Entities located in the State are prepared in accordance with International Financial Reporting Standards (IFRS).

(c) That the fiscal year for all separate financial statements of Constituent Entities located in the State is the same as the fiscal year of the Consolidated Financial Statements of the Ultimate Parent Entity.

3-1-3 If the conditions in Article 3.1.2 are not met, the Financial Accounting Net Income or Loss shall be the net income or loss determined for a Constituent Entity in the preparation of the Consolidated Financial Statements of the Ultimate Parent Entity, excluding consolidation adjustments relating to the following:

(a) Intra-group transactions, unless Article 3.2.8 applies.

(b) Purchase price allocation upon a Group Entity acquiring a Controlling Interest in an Entity as a result of a business combination, unless the following two conditions are met:

1. The acquisition date is before 1 December 2021.
2. The MNE Group does not have sufficient records to determine its Financial Accounting Net Income or Loss based on the unadjusted carrying values of the acquired assets and liabilities.

The Financial Accounting Net Income or Loss must include other consolidation adjustments not referred to in paragraphs (a) and (b) above and included in the Financial Accounting Net Income or Loss to the extent that it can be reliably and consistently demonstrated that they relate to the relevant Entity.

3-1-4 If it is not reasonably practicable to determine the Financial Accounting Net Income or Loss of a Constituent Entity based on the accounting standard used in preparing the Consolidated Financial Statements of the Ultimate Parent Entity under Article 3.1.3, the Financial Accounting Net Income or Loss of the Constituent Entity for the Fiscal Year may be determined using another acceptable financial accounting standard or an authorized financial accounting standard (adjusted to prevent material competitive distortion) if all of the following are met:

(a) The financial accounts of the Constituent Entity are maintained on the basis of that accounting standard.

(b) The information contained in the financial accounts is reliable.

(c) Permanent differences in excess of EUR 1 million, arising from the application of a particular principle or standard to items of income, expense, or transactions that differ from the financial standard used in preparing the Consolidated Financial Statements of the Ultimate Parent Entity, are conformed to the treatment required under the accounting standard used in the Consolidated Financial Statements of the Ultimate Parent Entity.

3-1-5 Articles 3.1.1 to 3.1.4 shall apply separately to each of the following:

(a) The Joint Venture and Affiliates in a Domestic Joint Venture Group.

(b) The Reverse Hybrid Entity established in accordance with the laws of the State.

3-2 Adjustments made to Determine GloBE Income or Loss

3-2-1 The Financial Accounting Net Income or Loss of the Constituent Entity shall be adjusted by the following items to arrive at the GloBE Income or Loss for that Entity:

(a) Net Tax Expense.

(b) Excluded Dividends.

(c) Excluded Equity Gains or Losses.

(d) Included Revaluation Method Gain or Loss.

(e) Gain or loss from the disposition of assets and liabilities excluded under Article 3.6.

(f) Asymmetric Foreign Currency Gains or Losses.

(g) Policy Disallowed Expenses.

(h) Prior Period Errors and Changes in Accounting Principles.

(i) Accrued Pension Expenses.

(j) Accrued Pension Income.

(k) Excluded Insurance Reserve Expenses.

3-2-2 Pursuant to an election by the Filing Constituent Entity, a Constituent Entity may, in computing its GloBE Income or Loss, substitute the amount of stock-based compensation allowed as a deduction in the computation of its taxable income in the State for the amount recorded in its financial accounts as the cost or expense for that Constituent Entity paid for the stock-based compensation, to the extent that such deduction is allowed under Decree-Law No. (47) of 2022. If stock-based compensation expense arises in respect of an option that expires without being exercised, the Constituent Entity must include the total amount previously deducted in the computation of its GloBE Income or Loss for the Fiscal Year in which the option expires. The election is a five-year election and must be applied consistently to stock-based compensation for all Constituent Entities located in the State for the year the election is made and all subsequent Fiscal Years. If the election is made in a Fiscal Year after some of the treated stock-based compensation has been recorded in the financial accounts, the Constituent Entity must include in the computation of its GloBE Income or Loss for that Fiscal Year an amount equal to the excess of the cumulative amount allowed as an expense in the computation of its GloBE Income or Loss in prior Fiscal Years over the cumulative amount that would have been allowed as an expense if the election had been made in those Fiscal Years. If the election is revoked, the Constituent Entity must include in the computation of its GloBE Income or Loss for the year of revocation the amount deducted pursuant to the election that exceeds the financial accounting expense accrued in respect of the unpaid stock-based compensation.

3-2-3 Transactions between Constituent Entities are subject to the following:

(a) If a transaction between two Constituent Entities located in different countries is not recorded for the same amount in the financial accounts of each, or if an asset is transferred at the disposing entity's carrying value or not recorded in a manner consistent with the arm's length principle, the GloBE Income or Loss of the Constituent Entities that are party to the transaction must be adjusted so that the transaction is recorded for the same amount and in a manner consistent with the arm's length principle, unless the adjustment is a unilateral adjustment and making such an adjustment would result in double taxation or double non-taxation under this Resolution.

(b) If a loss resulting from a sale or other transfer of an asset between two Constituent Entities located in the State is not recorded in accordance with the arm's length principle, it must be re-computed based on the arm's length principle if that loss is included in the computation of GloBE Income or Loss.

(c) The provisions in Article 3.4 concerning the allocation of income or loss between a Main Entity and its Permanent Establishments shall apply.

3-2-4 Qualified Refundable Tax Credits and Marketable Transferable Tax Credits are treated as income in the computation of a Constituent Entity's GloBE Income or Loss. Non-Qualified Refundable Tax Credits and Non-Marketable Transferable Tax Credits are not treated as income in the computation of a Constituent Entity's GloBE Income or Loss.

3-2-5 With respect to assets and liabilities that are subject to fair value or impairment accounting in the Consolidated Financial Statements, the Filing Constituent Entity may elect to determine gains and losses using the realisation principle for the purposes of calculating GloBE Income. The election is a five-year election and applies to all Constituent Entities located in the State to which the election applies. The election applies to all assets and liabilities of these Constituent Entities, unless the Filing Constituent Entity elects to limit the election to tangible assets of these Constituent Entities or Constituent Entities that are Investment Entities. Under this election, the following provisions apply:

(a) All gains or losses attributable to fair value or impairment accounting with respect to the asset or liability are excluded from the computation of GloBE gain or loss.

(b) For the purposes of determining the gain or loss, the carrying value of the asset or liability shall be its carrying value adjusted for accumulated depreciation at the later of the following dates:

1. The first day of the election year.
2. The date the asset was acquired or the liability was incurred.

(c) If the election is revoked, the GloBE Income or Loss of the Constituent Entities shall be adjusted by the difference at the beginning of the revocation year between the fair value of the asset or liability and the carrying value of the asset or liability determined in accordance with the election and adjusted for accumulated depreciation.

3-2-6 Whenever there is an aggregate asset gain in the State in a Fiscal Year, the Filing Constituent Entity may, under this Article 3.2.6, make an annual election in the State to adjust the GloBE Income or Loss with respect to each preceding Fiscal Year in the look-back period in the manner described in paragraphs (b) and (c) and distribute any remaining adjusted asset gain over the look-back period in the manner described in paragraph (d). The Effective Tax Rate and Supplementary Tax, if any, for any preceding Fiscal Year must be re-calculated under Article 5.1.4. When an election is made under this Article:

(a) Exclude Covered Taxes related to any net asset gain or net asset loss in the election year from the computation of Adjusted Covered Taxes.

(b) The aggregate asset gain in the election year is carried back to the earliest preceding loss year and offset pro-rata against any net asset loss of any Constituent Entity located in the State.

(c) If the adjusted asset gain, in any loss year, exceeds the total amount of net asset loss of all Constituent Entities located in the State, the adjusted asset gain is carried forward to a subsequent loss year (if any) and offset pro-rata against any net asset loss of any Constituent Entity located in the State.

(d) Any remaining adjusted asset gain after applying paragraphs (b) and (c) is allocated equally to each Fiscal Year in the look-back period. The asset gain allocated to the relevant year is included in the computation of GloBE Income or Loss of a Constituent Entity located in the State in that year in accordance with the following formula:

For the purposes of the above formula, a specified Constituent Entity is a Constituent Entity that has a net asset gain in the election year and was located in the State in the relevant year. If there is no specified Constituent Entity for a relevant year, the adjusted asset gain allocated to that year is allocated equally to each Constituent Entity in the State in that year.

3-2-7 Any expense attributable to an intra-group financing arrangement that can be reasonably expected, over the expected term of the arrangement, to result in the following shall be excluded from the computation of the GloBE Income or Loss of the low-taxed entity:

(a) An increase in the amount of expense included in the computation of the GloBE Income or Loss of the low-taxed entity.

(b) And without resulting in a corresponding increase in the taxable income of the high-tax counterparty. An amount received or receivable is not treated as an increase in the taxable income of the high-tax counterparty if that amount qualifies for an exclusion, exemption, deduction, treatment as a tax credit, or any other tax benefit under local law and the amount of that benefit is calculated by reference to the amount received or receivable.

3-2-8 The Ultimate Parent Entity may elect to apply its consolidated accounting treatment to exclude income, expenses, gains, and losses from transactions between Constituent Entities located in the State and consolidated in a tax group therein for the purpose of calculating the GloBE Net Income or Loss for each of these Constituent Entities. An election under this article is a five-year election. When this election is made or revoked, appropriate adjustments must be made for the purposes of this Resolution so that there is no duplication or omission of GloBE Income or Loss items as a result of making or revoking the election.

3-2-9 An insurance company must exclude from the computation of its GloBE Income or Loss amounts it charges policyholders for taxes paid by the insurance company in respect of returns to policyholders. An insurance company must include in the computation of its GloBE Income or Loss any returns to policyholders that are not accounted for in its Financial Accounting Net Income or Loss to the extent that the corresponding increase or decrease in the liability to policyholders is accounted for in its Financial Accounting Net Income or Loss.

3-2-10 Amounts recognised in accounting as a decrease in the equity of a Constituent Entity that are attributable to distributions paid or payable in respect of Additional Tier 1 Capital and Restricted Tier 1 Capital issued by the Constituent Entity shall be treated as an expense in the computation of its GloBE Income or Loss. Amounts recognised in accounting as an increase in the equity of a Constituent Entity that are attributable to distributions received or receivable in respect of Additional Tier 1 Capital held by the Constituent Entity shall be included in the computation of its GloBE Income or Loss.

3-2-11 The Financial Accounting Net Income or Loss of the Constituent Entity must be adjusted as required to reflect the requirements of the relevant provisions of Articles (6) and (7).

3-2-12 Pursuant to an election by the Filing Constituent Entity, a Constituent Entity may exclude income attributed to a Qualified Debt Release from the computation of a Constituent Entity's GloBE Income or Loss.

3-2-13 Notwithstanding paragraph (b) of Article 3.2.1, the Filing Constituent Entity may make a five-year election for each Constituent Entity to include all dividends in respect of Portfolio Shareholdings in the GloBE Income computation, regardless of whether they are Short-term Portfolio Shareholdings.

3-2-14 Notwithstanding paragraph (c) of Article 3.2.1, the Filing Constituent Entity may make a five-year election to treat foreign exchange gains or losses as Excluded Equity Gains or Losses, provided that the following are met:

(a) The foreign exchange gains or losses arise from hedging instruments that hedge against foreign currency exchange rate risk in relation to Ownership Interests other than a Portfolio Shareholding.

(b) This gain or loss is recognised in other comprehensive income at the level of the Consolidated Financial Statements.

(c) The hedging instrument is considered an effective hedge under the accepted financial accounting standard used in preparing the Consolidated Financial Statements.

3-3 Exclusion of International Shipping Income

3-3-1 For an MNE Group with International Shipping Income, the International Shipping Income of each Constituent Entity and Qualified Ancillary International Shipping Income shall be excluded from the computation of GloBE Income or Loss in the country where it is located in accordance with Article 3.3. If a loss results from the computation of a Constituent Entity's International Shipping Income or Qualified Ancillary International Shipping Income, that loss shall be excluded from the computation of its GloBE Income or Loss.

3-3-2 International Shipping Income means the net income obtained by a Constituent Entity from the following activities:

(a) Transportation of passengers or cargo by ships it operates in international traffic, whether the ship is owned, leased, or otherwise at the disposal of the Constituent Entity.

(b) Transportation of passengers or cargo by ships operated in international traffic under slot-chartering arrangements.

(c) Leasing of a ship, for use in the transportation of passengers or cargo in international traffic, on a full-time charter basis (fully equipped, crewed and supplied).

(d) Leasing of a ship on a bareboat charter basis (without crew or supplies), for use in the transportation of passengers or cargo in international traffic, to another Constituent Entity.

(e) Participation in a pool, a joint business or an international operating agency for the transportation of passengers or cargo by ships in international traffic.

(f) Sale of a ship used for the transportation of passengers or cargo in international traffic, provided that the ship has been held for use by the Constituent Entity for at least one year.

International Shipping Income does not include net income obtained from the transportation of passengers or cargo by ships on inland waterways within the same country.

3-3-3 Qualified Ancillary International Shipping Income means the net income obtained by a Constituent Entity from the following activities that are performed primarily in connection with the transportation of passengers or cargo by ships in international traffic:

(a) Leasing of a ship on a bareboat basis to another shipping company that is not a Constituent Entity, provided the lease term does not exceed three years.

(b) Sale of tickets issued by other shipping companies for the domestic part of an international journey.

(c) Leasing of containers, short-term storage, or detention fees for the late return of containers.

(d) Provision of services to other shipping companies by engineers, maintenance workers, cargo handlers, catering staff, and customer service personnel.

(e) Investment income where the income-producing investment is an integral part of carrying on the business of operating ships in international traffic.

3-3-4 The total Qualified Ancillary International Shipping Income of all Constituent Entities located in a country shall not exceed 50% of the International Shipping Income of those Constituent Entities.

3-3-5 The costs incurred by a Constituent Entity that are directly attributable to its international shipping activities listed in Article 3.3.2 and costs directly attributable to its qualified ancillary activities listed in Article 3.3.3, shall be deducted from the Constituent Entity's revenues arising from these activities to compute its International Shipping Income and Qualified Ancillary International Shipping Income. Other costs incurred by a Constituent Entity that are indirectly attributable to the international shipping and qualified ancillary activities of the Constituent Entity shall be allocated based on the Constituent Entity's revenues from these activities in proportion to its total revenues. All direct and indirect costs attributable to the International Shipping Income and Qualified Ancillary International Shipping Income of the Constituent Entity shall be excluded from the computation of that Entity's GloBE Income or Loss.

3-3-6 For the International Shipping Income and Qualified Ancillary International Shipping Income of a Constituent Entity to be excludible from its GloBE Income or Loss under this Article, the Constituent Entity must demonstrate that the strategic or commercial management of all ships concerned is effectively carried on from within the country where the Constituent Entity is located.

3-4 Allocation of Income or Loss between a Main Entity and a Permanent Establishment

3-4-1 The Financial Accounting Net Income or Loss of a Constituent Entity that is a Permanent Establishment in accordance with paragraphs (a), (b), and (c) of the definition in Article (18) is the net income or loss shown in the separate financial accounts of the Permanent Establishment. If the Permanent Establishment does not have separate financial accounts, the Financial Accounting Net Income or Loss shall be the amount that would have been reflected in its separate financial accounts if they had been prepared on a standalone basis and in accordance with the accounting standard used in the preparation of the Consolidated Financial Statements of the Ultimate Parent Entity.

3-4-2 The Financial Accounting Net Income or Loss of the Permanent Establishment referred to in Article 3.4.1 must be adjusted, if necessary, as follows:

(a) For a Permanent Establishment defined in paragraphs (a) and (b) of the definition in Article 18, the adjustment must reflect only the amounts and items of income and expense that are attributable to the Permanent Establishment in accordance with the applicable tax treaty or the domestic law of the country in which it is located, regardless of the amount of income subject to tax and the amount of deductible expense in that country.

(b) For a Permanent Establishment defined in paragraph (c) of the definition in Article 18, the adjustment must reflect only the amounts and items of income and expense that would have been attributable to it in accordance with Article 7 of the OECD Model Tax Convention.

3-4-3 In the case of a Constituent Entity that is a Permanent Establishment in accordance with paragraph (d) of the definition in Article 18, its income used in the computation of Financial Accounting Net Income or Loss shall be the income that is exempt in the country where the Main Entity is located and is attributable to operations conducted outside that country. The expenses used in the computation of Financial Accounting Net Income or Loss shall be those that are not deductible for tax purposes in the country where the Main Entity is located and are attributable to these operations.

3-4-4 The Financial Accounting Net Income or Loss of a Permanent Establishment shall not be taken into account when determining the GloBE Income or Loss of the Main Entity, except as provided in Article 3.4.5.

3-4-5 A GloBE Loss of a Permanent Establishment is treated as an expense of the Main Entity (and not an expense of the Permanent Establishment) for the purpose of calculating its GloBE Income or Loss to the extent the loss of the Permanent Establishment is treated as an expense in the computation of the domestic taxable income of that Main Entity and is not offset against an item of income that is subject to tax under the laws of both the country of the Main Entity and the country of the Permanent Establishment. GloBE Income that subsequently arises in the Permanent Establishment shall be treated as GloBE Income of the Main Entity (and not income of the Permanent Establishment) up to the amount of the GloBE Loss that was previously treated as an expense for the purposes of calculating the GloBE Income or Loss of the Main Entity.

3-5 Allocation of Income or Loss from a Flow-through Entity

3-5-1 The Financial Accounting Net Income or Loss of a Constituent Entity that is a Flow-through Entity shall be allocated as follows:

(a) If the Entity carries on its business wholly or partly through a Permanent Establishment, the Financial Accounting Net Income or Loss of the Entity is allocated to that Permanent Establishment in accordance with Article 3.4.

(b) In the case of a Tax Transparent Entity that is not the Ultimate Parent Entity, any remaining Financial Accounting Net Income or Loss after applying paragraph (a) is allocated to its owner-Constituent Entities in accordance with their respective Ownership Interests.

(c) In the case of a Tax Transparent Entity that is the Ultimate Parent Entity or a Reverse Hybrid Entity, any remaining Financial Accounting Net Income or Loss after applying paragraph (a) is allocated to it.

3-5-2 The provisions of Article 3.5.1 shall apply separately with respect to each Ownership Interest in the Flow-through Entity.

3-5-3 Before applying the provisions of Article 3.5.1, the Financial Accounting Net Income or Loss of a Flow-through Entity shall be reduced by the amount allocable to its owners that are not Group Entities and who hold their Ownership Interest in the Flow-through Entity directly or through a tax transparent structure.

3-5-4 Article 3.5.3 shall not apply to the following Entities:

(a) An Ultimate Parent Entity that is a Flow-through Entity.

(b) Any Flow-through Entity owned by such an Ultimate Parent Entity (whether directly or through a tax transparent structure).

Article 7.1 deals with the treatment of these Entities.

3-5-5 The Financial Accounting Net Income or Loss of a Flow-through Entity is reduced by the amount allocated to another Constituent Entity.

3-5-6 A direct or indirect owner of an Ownership Interest in a Tax Transparent Entity shall treat any tax credits that flow through that Tax Transparent Entity as tax credits of the owner. Tax credits shall be allocated in the same proportion as the Financial Accounting Net Income or Loss is allocated to the owners in accordance with Articles 3.5.1 to 3.5.5. If tax credits are allocated differently to the owners under the domestic tax law of the countries where the owners are located and the Tax Transparent Entity is established, the allocation of the tax credit under this provision shall follow the allocation made under the domestic laws.

3-5-7 The provisions of Article 3.5.6 shall not apply where the Filing Constituent Entity makes an Equity Investment Inclusion Election or where a Qualified Flow-through Tax Benefit exists, in which cases the provisions of Article 7.5 shall apply.

Article (4)

Calculation of Adjusted Covered Taxes

4-1 Adjusted Covered Taxes

4-1-1 The Adjusted Covered Taxes of a Constituent Entity for the Fiscal Year shall be equal to the current tax expense accrued in its Financial Accounting Net Income or Loss with respect to Covered Taxes for the Fiscal Year, adjusted by the following:

(a) The net amount of additions to Covered Taxes for the Fiscal Year (as determined under Article 4.1.2) and reductions to Covered Taxes for the Fiscal Year (as determined under Article 4.1.3).

(b) The total deferred tax adjustment amount (as determined under Article 4.4).

(c) Any increase or decrease in Covered Taxes recorded in equity or other comprehensive income relating to amounts included in the computation of GloBE Income or Loss that are subject to tax under domestic tax rules.

4-1-2 The additions to Covered Taxes for a Constituent Entity for the Fiscal Year are the sum of the following:

(a) Any amount of Covered Taxes accrued as an expense included in the profit before tax in the financial accounts.

(b) Any amount of a GloBE Loss Deferred Tax Asset utilized under Article 4.5.3.

(c) Any amount of Covered Taxes paid in the Fiscal Year relating to an uncertain tax position if that amount was treated for a prior Fiscal Year as a reduction to Covered Taxes under paragraph (d) of Article 4.1.3.

(d) Any amount of credit, refund, or transferable amount in respect of a Qualified Refundable Tax Credit or a Marketable Transferable Tax Credit that is recorded as a reduction to current tax expense.

4-1-3 The reductions to Covered Taxes for a Constituent Entity for the Fiscal Year are the sum of all of the following:

(a) The amount of current tax expense with respect to income excluded from the computation of GloBE Income or Loss under Article (3).

(b) Any amount of credit, refund, or transferable amount in respect of a tax credit that is not recorded as a reduction in current tax expense and is not derived from a Qualified Refundable Tax Credit or a Marketable Transferable Tax Credit.

(c) Any amount of Covered Taxes refunded to a Constituent Entity or credited to it, or an amount received by the Constituent Entity for the transfer of a tax credit that was not treated in the financial accounts as an adjustment to current tax expense, unless such amounts arise from a Qualified Refundable Tax Credit or a Marketable Transferable Tax Credit.

(d) The amount of current tax expense related to an uncertain tax position.

(e) Any amount of current tax expense that is not expected to be paid within three years of the last day of the Fiscal Year.

4-1-4 Any amount of Covered Taxes shall not be taken into account more than once.

4-1-5 In a Fiscal Year in which there is no net GloBE Income in the State, if the Adjusted Covered Taxes in the State are less than zero and less than the expected amount of Adjusted Covered Taxes, the Constituent Entities located in the State shall be treated as having an Additional Current Supplementary Tax in the State under Article 5.4, arising in the current Fiscal Year and equal to the difference between these two amounts. The expected amount of Adjusted Covered Taxes is equal to the GloBE Income or Loss in the State multiplied by the Minimum Tax Rate.

4-1-6 The Filing Constituent Entity may make an annual election to substitute the Additional Current Supplementary Tax referred to in Article 4.1.5 with a Negative Tax Expense Carry-forward in accordance with the following:

(a) The Negative Tax Expense for the Fiscal Year must be equal to the amount calculated under Article 4.1.5 for that Fiscal Year.

(b) The Negative Tax Expense Carry-forward must be used in all subsequent relevant calculations of the Effective Tax Rate in the country.

(c) The total Adjusted Covered Taxes (but not below zero) must be reduced by the remaining balance of the Negative Tax Expense Carry-forward in each subsequent Fiscal Year in which there is positive GloBE Income and Adjusted Covered Taxes in the State, and the balance of that carry-forward shall be reduced by the same amount.

(d) The Negative Tax Expense attributable to a loss amount that was carried back and offset in the current Fiscal Year against the income of prior years subject to domestic tax shall be taken into account under Article 4.1.5 and shall not be included in the Negative Tax Expense Carry-forward.

(e) The negative amount of Adjusted Covered Taxes shall not be less than the expected amount of Covered Taxes under Article 4.1.5.

(f) The Negative Tax Expense Carry-forward must remain attributable to the transferring group if the MNE Group disposes of one or more Constituent Entities in the State.

(g) If an MNE Group disposes of all Constituent Entities in the State and re-acquires or establishes Constituent Entities in the State in a subsequent Fiscal Year, the balance of the Negative Tax Expense Carry-forward must be taken into account when determining the Adjusted Covered Taxes in the State starting from that Fiscal Year.

(h) The MNE Group must maintain a record showing the outstanding balance of the Negative Tax Expense Carry-forward.

4-2 Definition of Covered Taxes

4-2-1 Covered Taxes mean all of the following:

(a) Taxes recorded in the financial accounts of a Constituent Entity with respect to its income or profits or its share of the income or profits of a Constituent Entity in which it holds an Ownership Interest.

(b) Taxes imposed in lieu of a generally applicable corporate income tax.

(c) Taxes imposed by reference to retained earnings and corporate equity, including a tax imposed on multiple components on the basis of income and equity.

4-2-2 Covered Taxes do not include any of the following amounts:

(a) The Supplementary Tax due on a Parent Entity under a Qualified Income Inclusion Rule in another country.

(b) The Supplementary Tax due from a Constituent Entity under a Qualified Domestic Minimum Top-up Tax in another country.

(c) Taxes attributable to an adjustment made by a Constituent Entity as a result of the application of a Qualified Undertaxed Profits Rule in another country.

(d) Non-qualified refundable imputation tax.

(e) Taxes paid by an insurance company in respect of returns to policyholders.

4-3 Allocation of Covered Taxes from one Constituent Entity to another Constituent Entity

4-3-1 Article 4.3.2 shall apply to the allocation of Covered Taxes in respect of Permanent Establishments, Tax Transparent Entities, and Hybrid Entities, as well as the allocation of Controlled Foreign Company taxes and taxes on distributions from one Constituent Entity to another.

4-3-2 The following provisions shall apply concerning the allocation of Covered Taxes from one Constituent Entity to another Constituent Entity:

(h) A total return swap where the underlying asset is transferred to the financial accounts of the entity that acquired the rights to the income and capital gains resulting from the underlying asset.

(i) A transfer of an entity/entities where the MNE Group receives an increase in the tax basis or book value (e.g., based on the fair value of the assets) for assets transferred to another location.

(j) Changes in fair value accounting where the entity records relevant gains or losses from changes in the fair value of the underlying asset and corresponding adjustments to the book value of the asset.

9-1-8 Article 9.1.3 shall not apply to a lease, license, or total return swap where the transacting parties account for corresponding income and expense items in the same Fiscal Years.

9-1-9 For the purposes of Article 9.1.3, the following provisions shall apply for purposes of determining the Pillar Two tax basis of acquired assets transferred between Constituent Entities after 30 November 2021:

(a) The carrying value of the transferred assets may be increased by capital expenditures or decreased by depreciation or amortization that arises after the transaction and before the beginning of the Transition Year, in accordance with the accounting standard followed in the financial statements used for purposes of determining Pillar Two Income or Loss.

(b) Any increase in depreciation or amortization attributable to the recording of assets at fair value in the financial accounting of the acquiring entity shall be excluded from the computation of Pillar Two Income or Loss.

(c) If the acquiring Constituent Entity records the acquired asset at fair value in its financial accounts, it may instead use the carrying value of such asset included in its financial accounts in all subsequent years if it would otherwise be entitled to take into account a deferred tax asset equal to the Minimum Tax multiplied by the difference between the domestic tax value of the asset and the Pillar Two carrying value of the asset determined under Article 9.1.3.

9-1-10 For the purposes of Article 9.1.1, any deferred tax asset or liability arising in the financial accounts used to compute Pillar Two Income or Loss as a result of the transaction referred to in Article 9.1.3 shall be disregarded, except in the following cases:

(a) to the extent that a Covered Tax has been paid by any of the following:

1. The disposing entity.

2. A member of the domestic consolidated tax group of the disposing entity.

(b) To the extent that any deferred tax assets would have been recognized under Article 9.1.1 by the Constituent Entity disposing of the transferred assets if the transaction provided for in Article 9.1.3 had not occurred.

9-1-11 For the purposes of the exception in Article 9.1.10, the following provisions shall apply:

(a) The MNE Group shall bear the burden of proving the following:

1. The amount of tax paid in connection with the transaction.

2. The amount referred to in Article 9.1.10(b).

3. The amount of any Covered Taxes that could have been attributable to the transaction which would have been allocated to the disposing entity under Article 4.3.

(b) The deferred tax asset referred to in Article 9.1.10 shall not exceed the Minimum Tax multiplied by the difference between the domestic tax value of the asset and the Pillar Two carrying value of the asset determined under Article 9.1.3.

(c) The deferred tax asset referred to in Article 9.1.6 shall not result in a reduction of the Adjusted Covered Taxes of the Constituent Entity.

(d) The deferred tax asset referred to in Article 9.1.6 shall be adjusted annually in proportion to any decrease in the carrying value of the asset for the year.

9-1-12 The following provisions shall apply if a Top-up Tax is applied to the Constituent Entities in the State in the Fiscal Year beginning on or before the Fiscal Year in which a Qualified Income Inclusion Rule or a Qualified Undertaxed Profits Rule first becomes applicable to those Constituent Entities:

(a) The Fiscal Year in which the Qualified Income Inclusion Rule or the Qualified Undertaxed Profits Rule came into effect for these Constituent Entities shall be the new Transition Year and the tax attributes of these Constituent Entities shall be re-evaluated in accordance with the other provisions of this Article.

(b) The excess negative tax expense carry-forward under Article 4.1.6 or Article 5.2.6 shall be cancelled at the beginning of the new Transition Year.

(c) Article 4.4.4 shall not apply to any deferred tax liability taken into account in the calculation of the Effective Tax Rate under the Top-up Tax provisions that has not been reversed before the new Transition Year, and that Article shall apply to deferred tax liabilities that are taken into account in and after the new Transition Year.

(d) With respect to Article 5.4, the deferred Pillar Two Loss as a tax asset that arose in the year preceding the new Transition Year shall be cancelled, and the Filing Constituent Entity may make a new Pillar Two Loss election in the new Transition Year.

(e) Article 9.1.2 shall apply to transactions that take place after 30 November 2021 and before the beginning of the new Transition Year.

(f) If a Top-up Tax is payable as a result of the application of Article 4.1.5 with respect to a deferred tax asset attributable to a tax loss, this deferred tax asset shall not be treated as arising from items excluded from the computation of Pillar Two Income or Loss under Article 3.

9-2 Transitional Safe Harbours for the Substance-Based Income Exclusion

9-2-1 For the purposes of applying Article 5.3.3, the 5% rate shall be replaced by the rates shown in the table below for each Fiscal Year beginning in any of the following calendar years:

9-2-2 For the purposes of applying Article 5.3.4, the 5% rate shall be replaced by the rate shown in the table below for each Fiscal Year beginning in any of the following calendar years:

9-3 Initial Phase of International Activity

9-3-1 Notwithstanding the requirements set forth in Article 5, the Top-up Tax calculated under this Chapter shall be reduced to zero during the initial phase of an MNE Group's international activity, provided that none of the ownership interests of the Constituent Entities located in the State are owned by a Parent Entity subject to a Qualified Income Inclusion Rule in another country.

9-3-2 An MNE Group is in its initial phase of international activity for a Fiscal Year if it meets the following two conditions:

(a) It has Constituent Entities in no more than six (6) countries.

(b) The sum of the net book values of Tangible Assets of all Constituent Entities located in all countries, except for the reference country, does not exceed fifty (50) million Euros.

9-3-3 For the purposes of Article 9.3.2, the reference country for an MNE Group is the country where the MNE Group has the highest total value of Tangible Assets for the Fiscal Year during which the MNE Group meets the revenue threshold in Article 1.1.1. The total value of Tangible Assets in a country is the sum of the net book values of all Tangible Assets of all Constituent Entities of the MNE Group located in that country.

9-3-4 This Article shall not apply to any Fiscal Year beginning five years after the first day of the first Fiscal Year in which the MNE Group meets the revenue threshold in Article 1.1.1. For MNE Groups that meet the revenue threshold in Article 1.1.1 from 31 December 2023, the five-year period will begin from the time the Qualified Undertaxed Profits Rule comes into effect.

Article (10)

Currency

10-1 If the Top-up Tax calculations are based on the separate financial statements in accordance with Article 3.1.2, all calculations must be made using the currency used in the separate financial statements.

10-2 Article 10.1 shall not apply if different functional currencies are used in two or more separate financial statements of the Constituent Entities in a Domestic Group. In this case, the Filing Constituent Entity must make a five-year election to use the presentation currency of the Consolidated Financial Statements of the Ultimate Parent Entity or the UAE Dirham for the purpose of calculating the Top-up Tax.

10-3 If a relevant amount for the calculations required under Article 10.1 is denominated in a currency other than the currency used in the separate financial statements and has not been translated into the currency used when preparing the separate financial statements, this amount must be translated into the currency used by applying the foreign currency translation principles in accordance with the financial accounting standard that would have been applied to translate the amount into the currency used if such translation had been made when preparing the separate financial statements.

10-4 If the calculations made to calculate the Top-up Tax are based on the accounts used to prepare the Consolidated Financial Statements of the Ultimate Parent Entity in accordance with Article 3.1.3, all calculations must be made using the presentation currency of the Consolidated Financial Statements of the Ultimate Parent Entity of the MNE Group.

10-5 For the purposes of Article 10.4, if an amount related to the calculations required under this Decision is denominated in a currency other than the presentation currency of the Consolidated Financial Statements and has not been translated into the presentation currency when preparing the Consolidated Financial Statements, this amount must be translated into the presentation currency by applying the foreign currency translation principles in accordance with the financial accounting standard that would have been applied to translate the amount into the presentation currency if such translation had been made when preparing the Consolidated Financial Statements.

10-6 For the purpose of determining whether any threshold provided for in this Decision has been met, relevant amounts denominated in a currency other than the Euro must be converted to Euros using the average of the daily reference exchange rates for the month of December preceding the relevant Fiscal Year, as determined by any of the following entities:

(a) The European Central Bank.

(b) If the European Central Bank has not set a reference exchange rate for the local currency in a country, the average foreign exchange rate shall be determined according to the rate set by the Central Bank of the United Arab Emirates.

(c) If neither the European Central Bank nor the Central Bank of the United Arab Emirates has set a daily exchange rate for the two currencies, the foreign exchange rate shall be determined from another source acceptable to the Federal Tax Authority.

10-7 For the purposes of Article 3.2.1(f), asymmetric foreign currency gain or loss adjustments shall be determined by reference to the tax currency and the accounting currency used by the Constituent Entity, and the resulting amount of the required adjustment shall be translated to the currency used in the separate financial statements if Article 3.1.2 applies, or the presentation currency of the Consolidated Financial Statements of the Ultimate Parent Entity of the MNE Group if Article 3.1.3 or Article 5.1.3 applies.

10-8 For the purposes of Article 15, the Pillar Two Information Return must be completed using the presentation currency of the Consolidated Financial Statements of the Ultimate Parent Entity of the MNE Group.

10-9 For the purposes of Article 8.1, the Top-up Tax Return must be submitted in the currency used to calculate the Top-up Tax. The amount of Top-up Tax due must be converted to UAE Dirhams using the average of the daily reference rates during the month of December preceding the relevant Fiscal Year as specified in Article 15.6.

Article (11)

Payment of Tax

11-1 The Constituent Entity, Joint Venture, JV Subsidiaries, or the Local Designated Filing Entity must pay any Top-up Taxes in accordance with Article 2 in UAE Dirhams, on the same date the Top-up Tax Return is due.

Article (12)

Joint and Several Liability

12-1 All Constituent Entities of the Domestic Main Group and the Minority-Owned Subgroup located in the State and all Reverse Hybrid Entities referred to in Article 2.1(c) shall be jointly and severally liable for the payment of the full amount of Top-up Tax attributable to any members of those groups and Reverse Hybrid Entities.

12-2 All Joint Ventures and JV Subsidiaries in a Domestic Joint Venture Group located in the State shall be jointly and severally liable for the payment of the full amount of Top-up Tax attributable to members of that group.

12-3 All partners, beneficiaries, and any other person holding an ownership interest in an unincorporated Constituent Entity established under the laws of the State and liable to pay Top-up Tax in accordance with Article 2.1, shall be jointly and severally liable for the payment of the full amount of Top-up Tax attributable to that Constituent Entity to the extent of their ownership interests in that entity.

Article (13)

Registration and De-registration

13-1 An entity subject to Top-up Tax in accordance with the provisions of this Decision and the Local Designated Filing Entity must register with the Federal Tax Authority in accordance with the procedures, forms, and within the period specified by the Authority.

13-2 The Federal Tax Authority may, at its discretion and based on the information available to it, register any entity for the purposes of applying this Decision from the date the entity became obliged to register in accordance with Article 13.1.

13-3 An entity must apply for tax de-registration to the Federal Tax Authority upon its dissolution or if it is no longer subject to the provisions of Article 1, in the form, manner, and within the period specified by the Federal Tax Authority.

Article (14)

Application of Certain Provisions of the Corporate Tax Law

14-1 The provisions of the following Articles of Federal Decree-Law No. (47) of 2022 shall apply to this Decision:

(a) Article 50 - General Anti-Abuse Rules.

(b) Article 56 - Record Keeping.

(c) Article 59 - Clarifications.

(d) Article 60 - Assessment of Corporate Tax and Penalties.

14-2 For the purposes of Article 14.1, the following provisions shall apply:

(a) A reference to a Taxable Person shall include a reference to a Constituent Entity and a Main Entity, as the case may be.

(b) A reference to Corporate Tax shall include a reference to the taxes imposed under the provisions of this Decision.

(c) A reference to a Tax Period shall include a reference to a Fiscal Year.

14-3 For the purposes of paragraph (d) of Article 14.1, during a Fiscal Year beginning on or before 31 December 2026, excluding any Fiscal Year ending after 30 June 2028, no fines or penalties shall be applied in relation to the filing of a Top-up Tax Return or a Pillar Two Information Return if the Federal Tax Authority considers that the MNE Group has taken reasonable measures to ensure the correct application of the provisions of this Decision.

14-4 The Minister may specify how other provisions contained in the aforementioned Decree-Law No. (47) of 2022 shall apply to this Decision.

Article (15)

Filing the Pillar Two Information Return

15-1 Entities specified by a decision of the Minister must file a Pillar Two Information Return with the Federal Tax Authority in accordance with the conditions and procedures specified in that decision.

15-2 The Pillar Two Information Return must be submitted in a standardized form published by the OECD/G20 Inclusive Framework on BEPS issued on 17 July 2023 (as amended from time to time) and must include the following information regarding the MNE Group (which shall be specified, expanded, or limited in accordance with the Pillar Two implementation framework, including through the development of simplified reporting procedures):

(a) Identification of the Constituent Entities, including their tax identification numbers (if any), the country where they are located, and their status under the Pillar Two rules.

(b) Information on the overall corporate structure of the MNE Group, including controlling interests held by any entity within the group in any other entity within the same group.

(c) Information necessary to calculate the following:

(d) The Effective Tax Rate for each country and the Top-up Tax for each Constituent Entity under provisions equivalent to those set forth in Chapter V of the Pillar Two Model Rules.

1. The Top-up Tax for a member of a Joint Venture Group under provisions equivalent to those set forth in Chapter VI of the Pillar Two Model Rules.

2. The allocation of Top-up Tax under the Income Inclusion Rule and the amount of Top-up Tax under the Undertaxed Profits Rule for each country under provisions equivalent to those set forth in Chapter II of the Pillar Two Model Rules.

(e) A record of the elections made in accordance with the relevant provisions of this Decision.

(f) Other information agreed upon as part of the Pillar Two implementation framework and necessary for the administration of the Pillar Two rules.

15-3 The Pillar Two Information Return shall apply the definitions and instructions contained in the standardized form published by the OECD/G20 Inclusive Framework on BEPS issued on 17 July 2023 (as amended from time to time).

15-4 The Pillar Two Information Return and notifications under this Article must be submitted to the Federal Tax Authority no later than 15 months from the last day of the reporting Fiscal Year.

15-5 The Federal Tax Authority may amend the information, reporting, and notification requirements for the Pillar Two Information Return in order to align them with the requirements of the Pillar Two implementation framework (including the development of simplified reporting procedures).

15-6 The Federal Tax Authority shall issue a decision specifying the form for the Pillar Two Information Return.

Article (16)

Commentaries and Guidance

This Decision shall be interpreted and applied in a manner consistent with the agreed Commentaries and Administrative Guidance adopted by the Minister.

Article (17)

Ministerial Decisions

The Minister may issue any rules, conditions, controls, or procedures to ensure that the provisions of this Decision are consistent with the objectives of the Pillar Two Model Rules and the agreed Commentaries and Administrative Guidance.

Article (18)

Definitions

In the application of the provisions of this Decision, the following words and phrases shall have the meanings assigned to each of them, unless the context requires otherwise:

18-1 Definitions of Terms

The State: United Arab Emirates.

The Ministry: Means the Ministry of Finance.

The Minister: Means the Minister of Finance.

Acceptable Financial Accounting Standard: Means International Financial Reporting Standards and the generally accepted accounting principles in Australia, Brazil, Canada, the member states of the European Union, the member states of the European Economic Area, Hong Kong (China), Japan, Mexico, New Zealand, the People's Republic of China, the Republic of India, the Republic of Korea, Russia, Singapore, Switzerland, the United Kingdom, and the United States of America.

Accrued Pension Expense: Means the difference between the amount of pension liability expense included in the Financial Accounting Net Income or Loss and the amount contributed to a pension fund for the Fiscal Year. Accrued Pension Expense shall not include expense accrued for direct pension payments to former employees.

Accrued Pension Income: Means the sum of pension income and the amount of pension contributions, if any, during the Fiscal Year.

Additional Current Top-up Tax: Is the amount of tax determined under Article 4.5 and any amount treated as additional current Top-up Tax determined under Article 4.5, such as the amount determined under Article 5.1.4.

Additional Tier One Capital: Means any instrument issued by a Constituent Entity pursuant to prudential regulatory requirements applicable to the banking sector that is convertible to equity or written down if a pre-specified trigger event occurs, and has other features that are designed to aid in loss absorbency in the event of a financial crisis.

Additions to Covered Taxes: Is defined in Article 4.1.2.

Adjusted Asset Gain: In relation to an Aggregate Asset Gain that is subject to an election under Article 6.2.3 means an amount equal to the Aggregate Asset Gain in the Election Year reduced by the amount of the gain that was used against a Net Asset Loss in a prior loss year under paragraph (b) or (c) of Article 6.2.3.

Adjusted Covered Taxes: Is defined in Article 4.1.1.

Aggregate Asset Gain: In relation to an election under Article 6.2.3, means the net gain in the Election Year from the disposition of local tangible assets by all Constituent Entities located in the country, other than the gain or loss from the transfer of assets between group members.

Agreed Administrative Guidance: Means guidance on the interpretation or administration of the Pillar Two Model Rules issued by the OECD/G20 Inclusive Framework on BEPS.

Annual Election: Means an election made by the Filing Constituent Entity that applies only to the Fiscal Year for which the election is made.

Allocated Asset Gain: In relation to an election under Article 6.2.3, means the Adjusted Asset Gain allocated to a Fiscal Year in the Look-back Period under paragraph (d) of Article 6.2.3.

Arm's Length Principle: Means the principle under which transactions between Constituent Entities should be recorded by reference to the conditions that would have been obtained between independent enterprises in comparable transactions and under comparable circumstances.

Asymmetric Foreign Currency Gains or Losses: Means foreign currency gains or losses of an entity whose accounting currency differs from its tax currency, and with respect to which all of the following are true:

(a) They are included in the computation of the taxable income or loss of the Constituent Entity and are attributable to fluctuations in the exchange rate between its accounting currency and its tax currency.

(b) They are included in the computation of the Financial Accounting Net Income or Loss of the Constituent Entity and are attributable to fluctuations in the exchange rate between its tax currency and its accounting currency.

(c) They are included in the computation of the Financial Accounting Net Income or Loss of a Constituent Entity and are attributable to fluctuations in the exchange rate between a third foreign currency and its functional currency.

(d) They are attributable to fluctuations in the exchange rate between a third foreign currency and its tax currency, whether or not such gain or loss in the foreign currency is included in taxable income.

The tax currency is the currency used to determine the taxable income or loss of a Constituent Entity for a Covered Tax in the country where the Constituent Entity is located. The accounting currency is the currency used to determine the Financial Accounting Net Income or Loss of the Constituent Entity. A third foreign currency is a currency other than the tax currency or the accounting currency used by the Constituent Entity.

Authorized Accounting Body: Is the body with legal authority in a country to prescribe, establish, or accept accounting standards for financial reporting purposes.

Authorized Financial Accounting Standard: In relation to any entity, means a set of generally accepted accounting principles permitted by an Authorized Accounting Body in the country where that entity is located.

Average Pillar Two Income or Loss: Is defined in Article 5.5.2.

Average Pillar Two Revenue: Is defined in Article 5.5.2.

Commentary: Means any commentary on the Pillar Two Model Rules prepared by the OECD/G20 Inclusive Framework on BEPS, as amended from time to time.

Consolidated Financial Statements: Means all of the following:

(a) The financial statements prepared by an Entity in accordance with an Acceptable Financial Accounting Standard, in which the assets, liabilities, income, expenses and cash flows of that Entity and any Entities in which it has a Controlling Interest are presented as those of a single economic unit.

(b) If the Entity is included in the definition of a Group under Article 1.2.3, the financial statements of the Entity are those prepared in accordance with an Acceptable Financial Accounting Standard.

(c) If the Ultimate Parent Entity has the financial statements referred to in either paragraph (a) or (b) and they are not prepared in accordance with an Acceptable Financial Accounting Standard, the financial statements are those prepared in accordance with another Acceptable Financial Accounting Standard and are subject to adjustments to prevent any material competitive distortions.

(d) When the Ultimate Parent Entity does not prepare the financial statements mentioned in the paragraphs above, the Consolidated Financial Statements of the Ultimate Parent Entity are those that the Entity would have prepared if such financial statements were mandatory by law or regulations and were prepared in accordance with an Authorized Financial Accounting Standard, whether an Acceptable Financial Accounting Standard or another Authorized Financial Accounting Standard, and are subject to adjustments to prevent any material competitive distortions.

Constituent Entity: Is defined in Article 1.3.1.

Constituent Entity-owner: Means a Constituent Entity that owns, directly or indirectly, an Ownership Interest in another Constituent Entity of the same MNE Group.

Controlled Foreign Company Tax Regime: Means a set of tax rules (other than an Income Inclusion Rule) under which a direct or indirect shareholder of a foreign entity (the controlled foreign company) is subject to current tax on its share of part or all of the income earned by the controlled foreign company, regardless of whether that income is currently distributed to the shareholder.

Controlling Interest: Means an ownership interest in an entity with respect to which either of the following is true:

(a) The owner of the interest is required to consolidate the assets, liabilities, income, expenses and cash flows of the entity on a line-by-line basis in accordance with an Acceptable Financial Accounting Standard.

(b) The owner of the interest would have been required to consolidate the assets, liabilities, income, expenses and cash flows of the entity on a line-by-line basis if the owner had prepared consolidated financial statements.

A Main Entity is considered the owner of controlling interests in its permanent establishments.

Co-operative: Means an entity that collectively markets or acquires goods or services on behalf of its members and is subject to a tax system in the country where it is located, and the entity has been designed to ensure tax neutrality with respect to the members' property or services sold through the co-operative, as well as the property or services acquired by the members through the co-operative.

Covered Taxes: Is defined in Article 4.2.

Deductible Dividend: In relation to a Constituent Entity subject to a Deductible Dividend Regime, means any of the following:

(a) A distribution of profits to an owner of an ownership interest that is deductible from the taxable income of the Constituent Entity under the laws of the country where it is located.

(b) A patronage dividend to a member of a co-operative.

Deductible Dividend Regime: Means a tax system designed to achieve a single level of taxation for the owners of an entity by deducting distributions to owners from the entity's income. For this purpose, patronage dividends to members of a co-operative are treated as distributions to owners. A Deductible Dividend Regime also includes a system that applies to co-operatives and exempts them from tax.

Designated Filing Entity: Means a Constituent Entity, other than the Ultimate Parent Entity, that has been appointed by the MNE Group to file the Pillar Two Information Return on behalf of the MNE Group.

Designated Local Entity: Means a Constituent Entity of an MNE Group located in the State that has been appointed by the other Constituent Entities located in the State of the MNE Group to file the Pillar Two Information Return or to submit notifications under Article 15.3.

Disallowed Accruals: Is defined in Article 4.4.6.

Disqualified Refundable Imputation Tax: Means any amount of tax, other than a qualified imputation tax, accrued or paid by a Constituent Entity, which meets either of the following:

(a) It is refundable to the beneficial owner of a dividend distributed by that Constituent Entity in respect of those profits or is creditable by the beneficial owner against a tax liability other than the tax liability related to those profits.

(b) It is refundable to the distributing company upon distribution of a dividend.

Withholding tax on dividends imposed on the recipient of the dividend and withheld by the distributing entity is not considered a disqualified refundable imputation tax, even if the tax authority subsequently refunds all or part of the withholding tax to the recipient of the dividend.

Local Designated Filing Entity: Means any of the following:

(a) A Constituent Entity that files the Top-up Tax Return and pays the Top-up Tax on behalf of all members of a Domestic Main Group, a Minority-Owned Subgroup, or a Reverse Hybrid Entity.

(b) A Joint Venture or a JV Subsidiary that files the Top-up Tax Return and pays the Top-up Tax on behalf of all members of a Domestic Joint Venture Group.

Domestic Group: Means any of the following:

(a) One or more Constituent Entities of an MNE Group located in the State (referred to as a "Domestic Main Group").

(b) One or more Constituent Entities, located in the State, in the same Minority-Owned Subgroup (referred to as a "Minority-Owned Subgroup").

(c) A Joint Venture or a Joint Venture and one or more JV Subsidiaries or one or more JV Subsidiaries located in the State, in the same Joint Venture Group (referred to as a "Domestic Joint Venture Group").

Dual-Listed Arrangement: Means an arrangement entered into by two or more Ultimate Parent Entities of separate groups, under which all of the following occur:

(a) The Ultimate Parent Entities agree to combine their businesses solely by contract.

(b) Pursuant to the contractual arrangements, the Ultimate Parent Entities make distributions (in respect of dividends and in the event of liquidation) to their shareholders on a fixed ratio basis.

(c) Their activities are managed as a single economic entity under contractual arrangements while retaining their separate legal identities.

(d) The ownership interests in the Ultimate Parent Entities party to the contract are quoted, traded, or transferred independently in different capital markets.

(e) The Ultimate Parent Entities prepare consolidated financial statements in which the assets, liabilities, income, expenses and cash flows of all group entities are presented together as those of a single economic unit, which a regulatory regime requires to be audited by an external auditor.

Effective Tax Rate: Is defined in Article 5.1.1.

Election Year: In relation to an Annual Election, means the year for which the election is made.

Eligible Employee: Means an employee, including a part-time employee, of a Constituent Entity of an MNE Group, and independent contractors engaged in the ordinary operating activities of the MNE Group under the direction and control of the MNE Group.

Eligible Payroll Costs: Means employee compensation expenses (including salaries, wages, and other expenses that provide a direct and separate personal benefit to the employee, such as health insurance premiums and pension contributions), payroll and employment taxes, and social security contributions paid by the employer.

Eligible Tangible Assets: Is defined in Article 5.3.4.

Entity: Means any of the following:

(a) Any legal person.

(b) An arrangement that prepares separate financial accounts, such as a partnership or a trust.

The definition of Entity does not include a natural person, a central government, a state government, a local government, or its departments or agencies exercising governmental functions.

Equity Investment Inclusion Election: Means a five-year election made on a country basis to apply the provisions of Article 7.5 with respect to all ownership interests (except for a Portfolio Shareholding) held by Constituent Entities located in the country, but the election cannot be revoked with respect to an ownership interest if a loss related to that interest has been taken into account in the calculation of Pillar Two Income or Loss during the period this election was in effect.

ETR Adjustment Items: Means Articles 3.2.6, 4.4.4, 4.1.6, and 4.6.4.

Euro: Means the currency of the economic and monetary union of the European Union.

Excess Profit: Is defined in Article 5.2.2.

Excluded Dividends: Means dividends or other distributions received or accrued with respect to an ownership interest, except for all of the following:

(a) A short-term portfolio contribution.

(b) An ownership interest in an Investment Entity subject to an election under Article 7.4.

Excluded Entity: Is defined in Articles 1.5.1 and 1.5.2.

Excluded Equity Gain or Loss: Means a gain, profit, or loss included in the Financial Accounting Net Income or Loss of a Constituent Entity that arises from all of the following:

(a) Gains and losses resulting from changes in the fair value of an ownership interest, except for a portfolio contribution.

(b) Profit or loss in relation to an ownership interest included under the equity method of accounting.

(c) Gains and losses resulting from the disposal of an ownership interest, except for the disposal of a portfolio contribution.

Excluded Insurance Reserves Expense: Means any expense incurred by a Constituent Entity that is an insurance company, in relation to the movement of the entity's insurance reserves to the extent that the amount of the expense is equal to any of the following:

(a) Excluded Dividends, net of investment management fees, from a security held on behalf of a policyholder.

(b) Excluded Equity Gain or Loss from a security held on behalf of a policyholder.

Filing Constituent Entity: Is the entity that files the Top-up Tax Return under Article 8.1.

Financial Accounting Net Income or Loss: Is defined in Articles 3.1.2 and 13.3.

Fiscal Year: Means the accounting period for which Constituent Entities prepare their separate financial statements or the Ultimate Parent Entity of the MNE Group prepares its consolidated financial statements, as the case may be. In the case of consolidated financial statements as defined in paragraph (d) of the definition of Consolidated Financial Statements, the Fiscal Year means the calendar year.

Five-year Election: Means an election made by a Filing Constituent Entity that relates to a Fiscal Year (the Election Year) and cannot be revoked in respect of the Election Year or the subsequent four Fiscal Years. If a five-year election is revoked in respect of a Fiscal Year (the Revocation Year), a new election cannot be made in respect of the four Fiscal Years following the Revocation Year.

General Government: Means the central administration, agencies whose operations are under its effective control, and state and local governments and their administrations.

Governmental Entity: Means an entity that meets all the criteria set out in paragraphs (a) to (d) below:

(a) Is part of or wholly owned by a government (including any political subdivision or local authority thereof).

(b) Its main purpose is any of the following:

1. Performing a governmental function.

2. Managing or investing the assets of that government or country by making investments, holding and managing assets, and related investment activities for the assets of the government or country.

The entity does not carry on a trade or business.

(c) Is accountable to the government for its overall performance and submits annual information reports to the government.

(d) Its assets vest in that government upon dissolution to the extent it distributes net profits, such that these net profits are distributed only to this government without any part of its net profits benefiting any private person.

Group: Is defined in Articles 1.2.2 and 1.2.3.

Group Entity: In relation to any entity or group, means a Constituent Entity of the same group.

High-Tax Counterparty: Means a Constituent Entity located in a country that is not a low-tax country, or located in a country that would not be a low-tax country if the Effective Tax Rate in that country were determined regardless of any income or expense accrued by this entity in relation to an intra-group financing arrangement.

IFRS: Means International Financial Reporting Standards.

Income Inclusion Rule: Means the rules equivalent to Articles 2.1 to 2.3 of the Pillar Two Model Rules.

Included Revaluation Method Gain or Loss: Means the net gain or loss, increased or decreased by any related Covered Taxes, for the Fiscal Year in respect of all property, plant, and equipment, which arises under an accounting method or practice that meets all of the following:

(a) Periodically adjusts the carrying value of such property to its fair value.

(b) Records the changes in value in other comprehensive income.

(c) Does not subsequently include in other comprehensive income the gains or losses recorded through profit or loss.

Insurance Investment Entity: Means an entity that meets all of the following:

(a) It meets the definition of an Investment Fund or a Real Estate Investment Vehicle but was established in relation to liabilities under an insurance or annuity contract.

(b) It is wholly owned by one or more entities that are all members of the same MNE Group and are subject to regulatory supervision in their location as an insurance company.

The entities referred to in paragraph (b) of this definition also include Fiscally Transparent Entities provided they are subject to regulatory supervision in the same manner as an insurance company.

Intermediate Parent Entity: Means a Constituent Entity (other than an Ultimate Parent Entity, a Partially-Owned Parent Entity, a Permanent Establishment, or an Investment Entity) that owns (directly or indirectly) an ownership interest in another Constituent Entity in the same MNE Group.

International Organization: Means any intergovernmental organization (including a supranational organization), or a wholly-owned agency or instrumentality thereof, which meets all the criteria set out in paragraphs (a) to (c) below:

(a) Is composed primarily of governments.

(b) Has a headquarters or a similar agreement (for example, arrangements granting privileges and immunities to the organization's offices or facilities in the country (such as a subdivision or a local or regional office)) with the country where it is established.

(c) The law or its governing documents prevent its income from inuring to the benefit of private persons.

International Shipping Income: Is defined in Article 3.3.2.

Intra-group Financing Arrangement: Means any arrangement entered into between two or more members of an MNE Group where the High-Tax Counterparty directly or indirectly provides financing (credit) or otherwise invests in a low-tax entity.

Investment Entity: Means all of the following:

(a) An Investment Fund, a Real Estate Investment Vehicle, or an Insurance Investment Entity.

(b) An entity that is at least 95% owned directly by the entity referred to in paragraph (a) or through a chain of such entities and that exclusively or almost exclusively holds assets or invests funds on behalf of those investment entities.

(c) An entity in which the entity referred to in paragraph (a) owns at least 85% of its value, provided that substantially all of the entity's income is Excluded Dividends or Excluded Equity Gains or Losses that are excluded from the computation of Pillar Two Income or Loss in accordance with Article 3.2.1(b) or (c).

Investment Fund: Means an entity that meets all the criteria set out in paragraphs (a) to (g) below:

(a) It is designed to pool assets (which may be financial and non-financial) from a number of investors (some of whom are not related).

(b) It invests in accordance with a defined investment policy.

(c) It allows investors to reduce transaction, research, and analysis costs or to spread risk collectively.

(d) It is primarily designed to generate investment income or gain, or to protect against a general or specific event or outcome.

(e) Investors have a right to the returns from the fund's assets or the income earned from those assets as a result of the contributions made by those investors.

(f) The entity or its management is subject to regulatory rules in the country where it is established or managed (including appropriate anti-money laundering and investor protection legislation).

(g) It is managed by investment fund management professionals on behalf of the investors.

Joint Venture: Means an entity whose financial results are reported in the Consolidated Financial Statements of the Ultimate Parent Entity using the equity method of accounting, provided that the Ultimate Parent Entity owns, directly or indirectly, at least 50% of its ownership interests. A Joint Venture does not include any of the following:

(a) An Ultimate Parent Entity of an MNE Group subject to the Pillar Two rules.

(b) An Excluded Entity as defined in Article 1.5.1.

(c) An entity in which the MNE Group holds a direct ownership interest through the Excluded Entity referred to in Article 1.5.1 and with respect to which any of the following is true:

1. It exclusively or almost exclusively holds assets or invests funds on behalf of its investors.

2. It carries out activities ancillary to those carried out by the Excluded Entity.

3. Its income is substantially excluded from the computation of Pillar Two Income or Loss in accordance with Article 3.2.1(b) and (c).

(d) An entity owned by an MNE Group that consists exclusively of Excluded Entities.

(e) A JV Subsidiary.

Joint Venture Group: means the Joint Venture and its Joint Venture Affiliates.

Joint Venture Affiliate: means any Entity whose assets, liabilities, income, expenses, and cash flows are consolidated by a Joint Venture under an Acceptable Financial Accounting Standard (or would have been required to be consolidated if such consolidation were required under an Acceptable Financial Accounting Standard). A Permanent Establishment whose Main Entity is a Joint Venture or a Joint Venture Affiliate shall be treated as a separate Joint Venture Affiliate.

Jurisdiction: means a State or a territory with fiscal autonomy, and may include the United Arab Emirates as the context requires.

Liable Constituent Entity (or Entities): means one or more Constituent Entities located in the State that could be liable for Top-up Tax in the absence of the application of the Pillar Two Safe Harbour in Article 2.8.

Local Tangible Assets: means immovable property located in the same Jurisdiction as the Constituent Entity.

Look-back Period: in respect of an election under Article 6.2.3 means the Election Year and the four preceding Fiscal Years.

Loss Year: in respect of a Jurisdiction for which the Filing Constituent Entity has made an election under Article 6.2.3, means the Fiscal Year in the Look-back Period in which there is a Net Asset Loss for a Constituent Entity in that Jurisdiction and the aggregate amount of the Net Asset Loss for all such Constituent Entities exceeds the aggregate amount of their Net Asset Gain.

Low-Taxed Constituent Entity: means a Constituent Entity that is located in a Low-Tax Jurisdiction or in a Jurisdiction that would have been a Low-Tax Jurisdiction if the Jurisdictional ETR had been determined irrespective of any income or expenses accrued by such Entity in respect of an Intra-Group Financing Arrangement.

Low-Tax Jurisdiction: in relation to an MNE Group in any Fiscal Year, means a Jurisdiction where the MNE Group has Net Pillar Two Income and is subject to an Effective Tax Rate (as determined under Article 5) in that period that is less than the Minimum Tax.

Main Entity: in relation to a Permanent Establishment, is the Entity that includes the Financial Accounting Net Income or Loss of the Permanent Establishment in its Financial Statements.

Marketable Price Floor: means 80% of the net present value of the Tax Credit, where such value is determined based on the yield to maturity of a debt instrument issued by the government that issued the Tax Credit with an equal or similar tenor (up to a five (5) year tenor) in the same Fiscal Year that the Tax Credit is transferred (or the Origination Year if not transferred). For the purposes of this definition, the following applies:

• (a) the amount of the Tax Credit is the face value of the credit or the transferable amount of the remaining credit in respect of the Tax Credit.
• (b) the cash flow expectations taken into account in the calculation of the net present value must be based on the maximum amount that can be used each year under the legal design of the credit.

Marketable Transferable Tax Credit: means a Tax Credit that can be used by the holder to reduce its liability for a Covered Tax in the Jurisdiction that issued the Tax Credit provided that the following conditions are met:

(a) in the case of the originator of the Tax Credit, the following must be met:

1. The Tax Credit regime must be designed in a way that allows the holder to transfer the credit to an unrelated party in the Fiscal Year it satisfies the eligibility criteria for the credit (the Origination Year) or within fifteen (15) months of the end of the Origination Year.
2. The Tax Credit is transferred to an unrelated party within fifteen (15) months of the end of the Origination Year (or if not transferred, or transferred between related parties, a similar Tax Credit is traded between unrelated parties within fifteen (15) months of the end of the Origination Year at a price that equals or exceeds the Marketable Price Floor).

(b) in the case of the purchaser of the Tax Credit, the following must be met:

1. The Tax Credit regime must be designed in a way that allows the purchaser to transfer the credit to an unrelated party in the Fiscal Year it purchased the Tax Credit.
2. The legal framework under which the Tax Credit is provided allows the purchaser to transfer the Tax Credit to an unrelated party and the purchaser is subject to the same or less restrictive legal restrictions on the transfer of the credit than those applicable to the originator of the credit.
3. The purchaser acquires the credit from an unrelated party at a price that equals or exceeds the Marketable Price Floor.

For the purposes of this definition, the originator and the purchaser are considered related parties if one owns, directly or indirectly, at least 50% of the ownership interest in the other (or in the case of a company, at least 50% of the total voting rights and value of the company's shares) or another person owns, directly or indirectly, at least 50% of the ownership interest (or in the case of a company, at least 50% of the total voting rights and value of the company's shares) in both the originator and the purchaser. In all cases, the originator and the purchaser are considered related parties if one, based on all relevant facts and circumstances, has control over the other or both are under the control of the same person or persons.

Material Competitiveness Distortion: in relation to the application of a specific principle or procedure under a set of Generally Accepted Accounting Principles, means an application that results in an aggregate variation of more than seventy-five (75) million Euros in a Fiscal Year compared to the amount that would have been determined by applying the corresponding principle or procedure of the International Financial Reporting Standards. If the application of a specific principle or procedure results in a Material Competitiveness Distortion, the accounting treatment of any item or transaction subject to that principle or procedure must be adjusted to conform with the treatment required for the item or transaction under IFRS in accordance with any agreed Administrative Guidance.

Minimum Tax: means 15% (fifteen percent).

Minority-Owned Constituent Entity: means a Constituent Entity in which the Ultimate Parent Entity holds a direct or indirect Ownership Interest of 30% or less.

Minority-Owned Parent Entity: means a Minority-Owned Constituent Entity that holds, directly or indirectly, the Controlling Interests of another Minority-Owned Constituent Entity, except where the Controlling Interests in the first-mentioned Entity are held, directly or indirectly, by another Minority-Owned Constituent Entity.

Minority-Owned Subgroup: means a Minority-Owned Parent Entity and its Minority-Owned Subsidiaries.

Minority-Owned Subsidiary: means a Minority-Owned Constituent Entity whose Controlling Interests are held, directly or indirectly, by a Minority-Owned Parent Entity.

MNE Group: is defined in Article 1.2.1.

MNE Group's Allocable Share of the Pillar Two Income of an Investment Entity: is defined in Article 7.3.4.

Multi-Parented MNE Group: means two or more Groups in respect of which both of the following apply:

• (a) The Ultimate Parent Entities of those Groups enter into an arrangement that is a Stapled Structure or a Dual-listed Arrangement.
• (b) At least one Entity or Permanent Establishment of the combined Group is located in a Jurisdiction different from the location of the other Entities in the combined Group.

Net Asset Gain: in respect of an election under Article 6.2.3, means the net gain from the disposition of Local Tangible Assets by a Constituent Entity located in the Jurisdiction for which the election was made, excluding gain or loss from transferring assets to another Group member.

Net Asset Loss: in respect of a Constituent Entity and a Fiscal Year, means the net loss from the disposition of Local Tangible Assets by that Constituent Entity in that year, excluding gain or loss from transferring assets to another Group member. The amount of Net Asset Loss shall be reduced by the amount of the Net Asset Gain or adjusted asset gain that is set off against this loss in accordance with the application of Article 6.2.3(b) or (c) as a result of a previous election made under Article 6.2.3.

Net Book Value of Tangible Assets: means the average of the opening and closing values of Tangible Assets after taking into account accumulated depreciation, depletion, and impairment, as recorded in the Financial Statements.

Net Jurisdictional Pillar Two Income: is defined in Article 2.1.5.

Net Pillar Two Loss: is the zero or negative amount, if any, calculated according to the following formula:

Net Pillar Two Loss = Pillar Two Income of all Constituent Entities – Pillar Two Losses of all Constituent Entities

For the purposes of this formula:

• (a) Pillar Two Income of all Constituent Entities means: the sum of the Pillar Two Income of all Constituent Entities located in the State, determined in accordance with Article 3 for the Fiscal Year.
• (b) Pillar Two Losses of all Constituent Entities means: the sum of the Pillar Two Losses of all Constituent Entities located in the State, determined in accordance with Article 3 for the Fiscal Year.

Net Taxes Expense: means the net of the following:

• (a) any Covered Taxes accrued as an expense and any current and deferred Covered Taxes included in the income tax expense, including Covered Taxes on income that is excluded from the calculation of Pillar Two Income or Loss.
• (b) any Deferred Tax Asset that is attributable to a loss for the Fiscal Year.
• (c) any Qualified Domestic Minimum Top-up Tax accrued as an expense.
• (d) any taxes arising under a Qualified IIR and a Qualified UTPR accrued as an expense.
• (e) any Disqualified Accrual or Unpaid Tax accrued as an expense.
• (f) taxes payable by an insurance company in respect of returns due to policyholders to the extent Article 9.2.3 applies to such taxes.

Non-Marketable Transferable Tax Credit: means a Tax Credit that, if held by the originator, is transferable but is not a Marketable Transferable Tax Credit, and if held by the purchaser, is not a Marketable Transferable Tax Credit.

Non-profit Organisation: means an Entity that meets all of the following criteria:

• (a) It is established and operated in its jurisdiction of residence:
  1. exclusively for religious, charitable, scientific, artistic, cultural, sporting, educational, or other similar purposes; or
  2. as a professional organisation, business league, chamber of commerce, labour organisation, agricultural or horticultural organisation, civic league or an organisation operated exclusively for the promotion of social welfare.
• (b) The income derived from the activities mentioned in paragraph (a) is substantially exempt from income tax in its jurisdiction of residence.
• (c) It has no shareholders or members who have a proprietary or beneficial interest in its income or assets.
• (d) The income or assets of the Entity may not be distributed to or applied for the benefit of a private person or a non-charitable entity except:
  1. pursuant to the conduct of the Entity’s charitable activities.
  2. as payment of reasonable compensation for services rendered or for the use of property or capital.
  3. as payment representing the fair market value of property which the Entity has purchased.
• (e) Upon termination, liquidation or dissolution of the Entity, all of its assets must be distributed or revert to a Non-profit Organisation or to the government (including any governmental entity) of the Entity’s jurisdiction of residence or any political subdivision thereof.

But it does not include any Entity that carries on a trade or business that is not directly related to the purposes for which it was established.

Non-Qualified Refundable Tax Credit: means a Tax Credit that is not a Qualified Refundable Tax Credit but is refundable in whole or in part.

Non-Qualifying Gain or Loss: means the gain or loss of the disposing Constituent Entity arising in connection with a Pillar Two Reorganisation that is subject to tax in the location of the disposing Constituent Entity or the financial accounting gain or loss arising in connection with a Pillar Two Reorganisation, whichever is lower.

OECD Model Tax Convention: means the OECD Model Tax Convention on Income and on Capital (2017): Condensed Version 2017.

Other Comprehensive Income: means items of income and expense that are not recognised in profit or loss as required or permitted by the Accepted Financial Accounting Standard used in the Consolidated Financial Statements. Other Comprehensive Income is typically disclosed as an adjustment to equity in the statement of financial position (balance sheet).

Ownership Interests: means any equity interest that carries rights to the profits, capital or reserves of an Entity (including a Flow-through Entity), including the profits, capital or reserves of a Permanent Establishment(s) of a Main Entity. For the purposes of this definition, the following provisions apply:

• (a) Equity interests are those that are accounted for as equity under the financial accounting standard used in preparing the Consolidated Financial Statements of the Ultimate Parent Entity.
• (b) Where different types of equity interests are issued by an Entity, all equity interests carrying rights to profits, capital, or reserves are treated equally, unless this Decision provides otherwise.

Parent Entity: means an Ultimate Parent Entity that is not an Excluded Entity, an Intermediate Parent Entity or a Partially-Owned Parent Entity.

Partially-Owned Parent Entity: means a Constituent Entity (other than an Ultimate Parent Entity, a Permanent Establishment, or an Investment Entity) that meets both of the following:

• (a) It holds (directly or indirectly) an Ownership Interest in another Constituent Entity in the same MNE Group.
• (b) More than 20% of the Ownership Interests in its profits are held directly or indirectly by persons that are not Constituent Entities of the MNE Group.

Passive Income: means income included in the Pillar Two Income that is any of the following:

• (a) a dividend or dividend equivalent.
• (b) interest or an interest equivalent.
• (c) rent.
• (d) a royalty.
• (e) an annuity.
• (f) net gains from property of a type that produces the income mentioned in paragraphs (a) to (e).

But only to the extent that an owning Constituent Entity is subject to tax imposed on such income under a controlled foreign company tax regime or as a result of an ownership interest in a hybrid entity.

Pension Fund: means both of the following:

• (a) an Entity that is established and operated in a Jurisdiction almost exclusively to administer or provide retirement benefits and ancillary or incidental benefits to individuals and that meets either of the following:
  1. is regulated as such by that Jurisdiction or one of its political subdivisions or local authorities.
  2. these benefits are secured or otherwise protected by domestic regulations and are funded by a pool of assets held through a fiduciary arrangement or trust to secure the fulfilment of the corresponding pension obligations in the event of the MNE Group’s insolvency.
• (b) a Pension Services Entity.

Pension Services Entity: means an Entity that is established and operated exclusively or almost exclusively for the following purposes:

• (a) to invest funds for the benefit of the entities referred to in paragraph (a) of the definition of Pension Fund.
• (b) to carry out activities that are ancillary to those organised activities engaged in by the entities referred to in paragraph (a) of the definition of Pension Fund, provided they are members of the same Group.

Permanent Establishment: means any of the following:

• (a) a place of business (including a deemed place of business) situated in a Jurisdiction which is treated as a permanent establishment in accordance with an applicable Tax Treaty, provided that such Jurisdiction taxes the income attributable to it in accordance with a provision similar to Article 7 of the OECD Model Tax Convention on Income and on Capital.
• (b) in the absence of an applicable Tax Treaty, a place of business (including a deemed place of business) in respect of which the Jurisdiction, under its domestic law, taxes the income attributable to such place of business on a net basis similar to the way it taxes its own tax residents.
• (c) if a Jurisdiction has no corporate income tax system, a place of business (including a deemed place of business) situated in that Jurisdiction which would be treated as a permanent establishment in accordance with the OECD Model Tax Convention on Income and on Capital, provided that such Jurisdiction has the right to tax the income attributable to it in accordance with Article 7 of that Model.
• (d) a place of business (or a deemed place of business) not described in paragraphs (a) to (c) through which operations are conducted outside the Jurisdiction where the Entity is located, provided that this Jurisdiction exempts the income attributable to these operations.

Pillar Two Implementation Framework: means the procedures developed by the OECD/G20 Inclusive Framework on BEPS to put in place administrative rules, guidance and procedures that will facilitate the co-ordinated implementation of the Pillar Two Model Rules.

Pillar Two Income of all Constituent Entities: is defined in paragraph (a) of Article 2.1.5.

Pillar Two Income or Loss of a Constituent Entity: is defined in Article 1.1.3.

Pillar Two Information Return: means the standardised return that will be developed under the Pillar Two Implementation Framework which contains the information set out in Article 15.

Pillar Two Loss Deferred Tax Asset: is defined in Article 5.4.

Pillar Two Loss Election: is defined in Article 1.5.4.

Pillar Two Losses of all Constituent Entities: is defined in Article 2.1.5(b).

Pillar Two Model Rules: means the set of model rules contained in the document entitled Tax Challenges Arising from the Digitalisation of the Economy - Global Anti-Base Erosion Model Rules (Pillar Two) issued by the OECD on 20 December 2021.

Pillar Two Reorganisation: means a transformation or transfer of assets and liabilities such as in a merger, demerger, liquidation or similar transaction in respect of which all of the following applies:

• (a) the consideration for the transfer is, in whole or significant part, equity interests issued by the acquiring Constituent Entity or by a person connected with the acquiring Constituent Entity, or, in the case of a liquidation, equity interests of the target (or, where no consideration is provided, when the issuance of an equity interest would have no economic significance).
• (b) the disposing Constituent Entity’s gain or loss on those assets is not subject to tax, in whole or in part.
• (c) the tax laws of the Jurisdiction in which the acquiring Constituent Entity is located require that Entity to compute the taxable income after the disposition or acquisition using the disposing Constituent Entity's tax basis in the assets, adjusted for any Non-Qualifying Gain or Loss arising on the disposition or acquisition.

For the purposes of this definition, a transformation means a change in the form of an Entity and includes a contribution of assets to the capital of an existing Entity where the Entity does not issue new or additional equity interests in exchange for the contributed property because the transaction does not result in a change in the relative ownership of the Entity.

Pillar Two Revenue: is defined in Article 3.5.5(a) for the purposes of Article 2.5.5.

Pillar Two Rules: means a Qualified IIR, a Qualified UTPR or a Qualified Domestic Minimum Top-up Tax including the provisions in this Decision.

Policy Disallowed Expenses: means both of the following:

• (a) expenses incurred by the Constituent Entity for illegal payments, including bribes and kickbacks.
• (b) expenses incurred by the Constituent Entity for fines and penalties that are equal to or exceed EUR 50,000 (or the equivalent in the functional currency in which the Financial Accounting Net Income or Loss of the Constituent Entity is calculated).

Portfolio Shareholding: means Ownership Interests in an Entity held by the MNE Group which carry rights to less than 10% of the profits, capital, reserves or voting rights of that Entity at the date of the distribution or disposition, or in the case of a change in fair value movements, at the end of the Fiscal Year.

Prior Period Errors and Changes in Accounting Principles: means all changes in the opening equity at the beginning of the Fiscal Year of a Constituent Entity that are attributable to any of the following:

• (a) a correction of an error in the determination of the Financial Accounting Net Income in a prior Fiscal Year that affected income or expenses that are includible in the computation of Pillar Two Income or Loss for that Fiscal Year, except to the extent that such a correction of an error resulted in a material decrease in a tax liability for Covered Taxes in accordance with Article 6.4.
• (b) a change in accounting principle or policy that affects income or expenses that are includible in the computation of Pillar Two Income or Loss.

Qualified Ancillary International Shipping Income: is defined in Article 3.3.3.

Qualified Debt Release: means a release from a debt that is made pursuant to any of the following procedures:

• (a) a procedure taken under insolvency or bankruptcy proceedings provided for in domestic law that meets either of the following:
  1. it is supervised by a court or other judicial body in the relevant Jurisdiction.
  2. an independent insolvency practitioner is appointed.
• (b) pursuant to an arrangement with one or more creditors that are not closely related to the debtor and it is reasonable to assume, based on the opinion of a qualified independent party, that the debtor will become insolvent within twelve (12) months from the date of the release if the debts owed to creditors not closely related under the arrangement are not released.
• (c) where paragraphs (a) or (b) above do not apply and the debtor's liabilities exceed the fair market value of its assets determined immediately before the debt release, the amount owed by the debtor to a creditor not closely related is to the extent of the lesser of:
  1. the excess of the debtor’s liabilities over the fair market value of its assets determined immediately before the debt release.
  2. the reduction in the debtor’s tax attributes under the tax laws of the Jurisdiction where the debtor is located as a result of the debt release.

For the purposes of this definition, a creditor that is closely related to the debtor means if either, based on all relevant facts and circumstances, controls the other or both are under the control of the same persons or companies. In all cases, a creditor or debtor is considered to have a close relationship with the other if one owns directly or indirectly more than 50% of the ownership interest in the other (or in the case of a company, more than 50% of the total voting rights and value of the company's shares or beneficial equity interests in the company) or if another person or enterprise owns directly or indirectly more than 50% of the ownership interest (or in the case of a company, more than 50% of the total voting rights and value of the company's shares or beneficial equity interests in the company) in the creditor and debtor.

Qualified Domestic Minimum Top-up Tax: means a tax under the law of a Jurisdiction that is determined by the OECD/G20 Inclusive Framework on BEPS to be a qualified domestic top-up tax for the Fiscal Year, published on the OECD website, in accordance with the definition of Qualified Domestic Minimum Top-up Tax in Article 1.10 of the Pillar Two Model Rules.

Qualified IIR: means a set of rules equivalent to those in Articles 1.2 to 3.2 of the Pillar Two Model Rules which are determined by the OECD/G20 Inclusive Framework on BEPS to be qualified rules for the Fiscal Year, as published on the OECD website, in accordance with the definition of Qualified IIR in Article 1.10 of the Pillar Two Model Rules.

Qualified Imputation Tax: means a Covered Tax accrued or paid by a Constituent Entity that is refundable or creditable to the beneficial owner of a dividend distributed by such Constituent Entity (or a profit share distributed by the Main Entity, in the case of a Covered Tax accrued or paid by a Permanent Establishment) to the extent that the refund is payable, or the credit is provided:

• (a) by a Jurisdiction other than the Jurisdiction that imposed the Covered Taxes under a foreign tax credit regime.
• (b) to a beneficial owner of a dividend that is subject to tax at a nominal rate that equals or exceeds the Minimum Tax on the dividend on a current basis under the domestic law of the Jurisdiction that imposed the Covered Taxes on the Constituent Entity.
• (c) to an individual beneficial owner of a dividend who is a tax resident in the Jurisdiction that imposed the Covered Taxes on the Constituent Entity and who is subject to tax on the dividend as ordinary income.
• (d) to a Governmental Entity, an International Organisation, a resident Non-profit Organisation, a resident Pension Fund, a resident Investment Entity that is not a Group Entity, or a resident life insurance company to the extent that the dividend is received in connection with a pension fund business and is taxed in a similar manner as a dividend received by a Pension Fund.

For the purposes of paragraph (d), a Non-profit Organisation or a Pension Fund is resident in a Jurisdiction if it is created and managed in that Jurisdiction, and an Investment Entity is resident in a Jurisdiction if it is created and regulated in that Jurisdiction. A life insurance company is resident in the Jurisdiction where it is located.

Qualified Ownership Interest: means both of the following:

• (a) an investment in a tax transparent entity that meets both of the following:
  1. it is treated as an equity interest for domestic tax purposes.
  2. it is treated as an equity interest under the Accepted Financial Accounting Standard in the Jurisdiction where the tax transparent entity operates, where the assets, liabilities, income, expenses, and cash flows of the tax transparent entity are not consolidated on a line-by-line basis in the Consolidated Financial Statements of the Ultimate Parent Entity.
• (b) the gross return in respect of such investment is expected to be less than the total amount invested by the investor (including distributions and the benefit of tax losses and qualified refundable tax credits realised through the tax transparent entity, but excluding tax credits that are not qualified refundable tax credits) such that a portion of the investment is returned in the form of tax credits that are not qualified refundable tax credits (regardless of whether such tax credits are expected to be transferred or used to reduce the amount owed by the investor relating to a Covered Tax).

For the purposes of paragraph (b), the expected gross return is determined at the time of entering into the investment and based on the facts and circumstances, including the terms of the investment.

An investment is not considered a Qualified Ownership Interest unless it meets either of the following:

• (a) the investor has a genuine economic interest in the tax transparent entity and is not protected from loss on its investment.
• (b) where the Jurisdiction only allows the transfer of the benefit of tax credits through such interests, when the developer or investor is subject to the Pillar Two Model Rules.

Qualified Refundable Tax Credit: means a refundable tax credit designed in a way that it must be paid as cash or made available as a cash equivalent within four years from when a Constituent Entity satisfies the conditions for receiving the credit under the laws of the Jurisdiction granting the credit. A partially refundable tax credit is a Qualified Refundable Tax Credit to the extent that it must be paid as cash or made available as a cash equivalent within four years from the time the Constituent Entity satisfies the conditions for receiving the credit under the laws of the Jurisdiction granting the credit. A Qualified Refundable Tax Credit does not include any amount of tax that is creditable or refundable pursuant to a Qualified Imputation Tax or a Disqualified Refundable Imputation Tax.

Qualified UTPR: means a set of rules equivalent to Articles 4.2 to 6.2 of the Pillar Two Model Rules which are determined by the OECD/G20 Inclusive Framework on BEPS to be qualified rules for the Fiscal Year, as published on the OECD website, in accordance with the definition of Qualified UTPR in Article 1.10 of the Pillar Two Model Rules.

Qualifying Flow-through Tax Benefit: means a tax benefit that flowed through a Qualified Ownership Interest that is attributable to the following:

• (a) a tax credit that is not a qualified refundable tax credit.
• (b) a deductible tax loss.

Qualifying Competent Authority Agreement: means a bilateral or multilateral agreement or arrangement between competent authorities that provides for the automatic exchange of the annual Pillar Two Information Return.

Real Estate Investment Vehicle: means an Entity whose taxes achieve a single level of taxation either in its own hands or in the hands of its interest holders (with at most a one-year deferral), provided that such Entity predominantly holds immovable property and is itself held by a significant number of shareholders. A tax neutral vehicle that holds an ownership interest in a Real Estate Investment Vehicle is treated as being subject to a single level of taxation.

Recaptured Deferred Tax Liability: is defined in Article 4.4.4.

Recapture of Excluded Accrual: is defined in Article 5.4.4.

Reductions to Covered Taxes: is defined in Article 3.1.4.

Reporting Fiscal Year: means the Fiscal Year subject to the "Pillar Two Information Return" or the "Top-up Tax Return".

Restricted Tier One Capital: means an instrument issued by a Constituent Entity in accordance with prudential regulatory requirements in force in the insurance sector which is convertible into equity or written down if a pre-specified event occurs and which contains other features designed to help absorb losses in the event of a financial crisis.

Short-term Portfolio Shareholding: means a Portfolio Shareholding that is economically held by the Constituent Entity that receives or accrues the dividend or other distribution for less than one year at the date of the distribution.

Stapled Structure: means an arrangement entered into by two or more Ultimate Parent Entities of separate Groups, under which both of the following are met:

• (a) 50% or more of the Ownership Interests in the Ultimate Parent Entities of the separate Groups are, by reason of form of ownership, restrictions on transfer or other terms or conditions, combined with each other and cannot be transferred or traded independently. If the combined Ownership Interests are listed, they are priced as a single unit.
• (b) one of these Ultimate Parent Entities prepares Consolidated Financial Statements in which the assets, liabilities, income, expenses and cash flows of all the entities of the Groups are presented together as a single economic unit and which are required by regulatory rules to be externally audited.

Stateless Constituent Entity: means the Constituent Entity identified in Articles 2.3.18(b) and 3.3.18(d).

Substance-based Income Exclusion: is defined in Article 3.5.

Substitute Loss Carry-forward Deferred Tax Asset: means a Deferred Tax Asset that arises from any of the following:

• (a) a foreign tax credit provided that all the following conditions are met:
  1. the Jurisdiction requires that income arising in a foreign jurisdiction be offset by losses arising in the Jurisdiction before foreign tax credits are offset against the tax imposed on the income arising in a foreign jurisdiction.
  2. the Constituent Entity has a domestic tax loss that is offset in whole or in part by income arising in a foreign jurisdiction.
  3. the domestic tax system allows the use of foreign tax credits to offset a tax liability in a subsequent year in respect of income included in the computation of the Pillar Two Income or Loss of the Constituent Entity.
• (b) a loss recovery mechanism in force in a controlled foreign company tax system which meets both of the following:
  1. it provides a result that is equivalent to or less than the result provided in paragraph (a) of this definition.
  2. it also allows excess foreign tax credits arising in a subsequent year to offset the domestic tax liability from income arising in the Jurisdiction which has been re-sourced as income arising in a foreign jurisdiction.

Tax: means a compulsory unrequited payment to general government.

Taxable Distribution Method: is defined in Article 2.4.7.

Tax Treaty: means an agreement for the avoidance of double taxation with respect to taxes on income and on capital.

Test Year: is defined in Article 5.4.7.

Test Period: is defined in Article 5.4.7.

Top-up Tax: means the Top-up Tax calculated for the State, a Jurisdiction or a Constituent Entity in accordance with Article 2.5 as the context requires.

Top-up Tax Return: means the return referred to in Article 1.8.

Top-up Tax Percentage: is defined in Article 1.2.5.

Total Deferred Tax Adjustment Amount: is defined in Article 1.4.4.

Transition Year for a Jurisdiction: means the first Fiscal Year in which an MNE Group falls within the scope of a Qualified IIR or a Qualified UTPR in respect of that Jurisdiction or the Top-up Tax under this Decision.

Ultimate Parent Entity: is defined in Article 4.1.

Undistributed Net Pillar Two Income: is defined in Article 3.4.7.

Ultimate Parent Entity Jurisdiction: means the Jurisdiction where the Ultimate Parent Entity is located.

UTPR: means a country's rules that are equivalent to Articles 4.2 to 6.2 of the Pillar Two Model Rules.

UTPR Jurisdiction: means a Jurisdiction that has a qualified and effective UTPR in effect.

UTPR Top-up Tax Amount: means the amount of Top-up Tax allocated to a UTPR Jurisdiction under the UTPR.

18-2 Definitions of Fiscally Transparent Entity, Tax Transparent Entity, Reverse Hybrid Entity and Hybrid Entity

18-2-1 An Entity is a Fiscally Transparent Entity to the extent that it is fiscally transparent in respect of its income, expense, profit or loss in the Jurisdiction where it was created, unless it is a tax resident and subject to a Covered Tax on its income or profit in another Jurisdiction.

• (a) A Fiscally Transparent Entity is a Tax Transparent Entity in respect of its income, expense, profit or loss to the extent it is fiscally transparent in the Jurisdiction where its owner is located.
• (b) A Fiscally Transparent Entity is a Reverse Hybrid Entity in respect of its income, expense, profit or loss to the extent it is not fiscally transparent in the Jurisdiction where the owner is located.

18-2-2 An Entity is treated as fiscally transparent under the laws of a state if that state treats the income, expense, profit or loss of that Entity as if they were realised or incurred by the direct owner of that Entity in proportion to its interest in that Entity.

18-2-3 An Ownership Interest in an Entity or Permanent Establishment that is a Constituent Entity is treated as held through a tax transparent structure if that Ownership Interest is owned indirectly through a chain of Tax Transparent Entities.

18-2-4 A Constituent Entity that is not a tax resident and is not subject to a Covered Tax or a Qualified Domestic Minimum Top-up Tax based on its place of management, place of creation or similar criteria, is treated as a Fiscally Transparent Entity and a Tax Transparent Entity in respect of its income, expense, profit or loss to the extent that all of the following are met:

• (a) its owners are located in a Jurisdiction that treats the Entity as fiscally transparent.
• (b) it has no place of business in the Jurisdiction in which it was created.
• (c) the income, expense, profit or loss are not attributable to a Permanent Establishment.

18-2-5 An Entity that is treated as a separate taxable person for income tax purposes in the Jurisdiction where it is located is a Hybrid Entity in respect of its income, expense, profit or loss to the extent that it is fiscally transparent in the Jurisdiction where its owner is located.

18-3 Location of an Entity and a Permanent Establishment

18-3-1 The location of an Entity that is not a Fiscally Transparent Entity is determined as follows:

• (a) If it is a tax resident in a Jurisdiction based on its place of management, place of creation or similar criteria, its location is in that Jurisdiction.
• (b) In other cases, its location is in the Jurisdiction where it was created.

18-3-2 The location of an Entity that is a Fiscally Transparent Entity is determined as follows:

• (a) If it is the Ultimate Parent Entity of the MNE Group or is required to apply an IIR in accordance with a provision equivalent to Article 1.2 of the Pillar Two Model Rules, it is located in the Jurisdiction where it was created.
• (b) In other cases, it is treated as a Stateless Constituent Entity.

18-3-3 The location of a Permanent Establishment is determined as follows:

• (a) If it is identified in paragraph (a) of the definition in Article 1.18, its location is in the Jurisdiction where it is treated as a permanent establishment and is subject to tax under the applicable Tax Treaty.
• (b) If it is identified in paragraph (b) of the definition in Article 1.18, its location is in the Jurisdiction where it is subject to a net basis of tax based on its business presence.
• (c) If it is identified in paragraph (c) of the definition in Article 1.18, its location is in the Jurisdiction where it is located.
• (d) If it is identified in paragraph (d) of the definition in Article 1.18, it is considered a stateless Permanent Establishment.

18-3-4 Where a Constituent Entity is located in more than one Jurisdiction (a dual-located entity), due to Article 1.3.18, its status is then determined for the Fiscal Year for the purposes of this Decision as follows:

• (a) If it is located in two Jurisdictions that have an effective Tax Treaty, the following applies:
  1. It is located in the Jurisdiction where it is considered a resident for the purposes of the Tax Treaty.
  2. If the Tax Treaty requires the competent authorities to reach a mutual agreement on the deemed residence of the Constituent Entity for the purposes of the Tax Treaty and there is no agreement, then paragraph (b) applies.
  3. If the Tax Treaty does not provide for relief from tax because the Constituent Entity is a tax resident of both contracting parties, then paragraph (b) applies.
• (b) If no Tax Treaty applies, its location is then determined as follows:
  1. Its location is in the Jurisdiction where it paid the greater amount of Covered Taxes for the Fiscal Year, without regard to taxes paid under a controlled foreign company tax system.
  2. If the amount of Covered Taxes paid in each Jurisdiction is equal or zero, it is located in the Jurisdiction where it has the greater amount of Substance-based Income Exclusion calculated on an entity basis in accordance with Article 3.5.
  3. If the amount of Substance-based Income Exclusion in each Jurisdiction is equal or zero, it is then considered a Stateless Constituent Entity, unless it was the Ultimate Parent Entity of the MNE Group, in which case it is considered to be located in the Jurisdiction where it was created.

18-3-5 If a dual-located entity, according to Article 4.3.18, is a Parent Entity located in a Jurisdiction where it is not subject to a Qualified IIR, then the other Jurisdiction may require this Entity to apply its Qualified IIR unless restricted by an applicable Tax Treaty.

18-3-6 If an Entity changes its location during the Fiscal Year, its location is the Jurisdiction where it was located at the beginning of that year.

Cases, Provisions, Conditions, Rules, Controls, and Procedures
on the Imposition of Top-up Tax on Multinational Enterprises

Attached to Cabinet Decision No (142) of 2024

Article 1

Scope of Application

Article 1.1. Scope of this Decision

1.1.1 This Decision shall apply to Constituent Entities that are members of an MNE Group that has annual revenue of EUR 750 million or more in the Consolidated Financial Statements of the Ultimate Parent Entity in at least two of the four Fiscal Years immediately preceding the tested Fiscal Year. Further rules are set out in Article 6.1 which modify the application of the consolidated revenue threshold in certain cases.

1.1.2 If one or more of the Fiscal Years of the MNE Group taken into account for purposes of Article 1.1.1 is of a period other than 12 months, for each of those Fiscal Years the EUR 750 million threshold is adjusted proportionally to correspond with the length of the relevant Fiscal Year.

Article 1.2. MNE Group and Group

1.2.1 An MNE Group means any Group that includes at least one Entity or Permanent Establishment that is not located in the Jurisdiction in which the Ultimate Parent Entity of the MNE Group is located.

1.2.2 A Group means a collection of Entities that are related through ownership or control such that the assets, liabilities, income, expenses and cash flows of those Entities:

• (a) are included in the Consolidated Financial Statements of the Ultimate Parent Entity; or
• (b) are excluded from the Consolidated Financial Statements of the Ultimate Parent Entity solely on size or materiality grounds, or on the grounds that the Entity is held for sale.

1.2.3 A Group also means an Entity that is located in one Jurisdiction and has one or more Permanent Establishments located in other Jurisdictions provided that the Entity is not a part of another Group described in Article 1.2.2.

Article 1.3. Constituent Entity

1.3.1 A Constituent Entity is any of the following:

• (a) any Entity that is included in a Group; or
• (b) any Permanent Establishment of a Main Entity that is within paragraph (a).

1.3.2 A Permanent Establishment that is a Constituent Entity under paragraph (b) above shall be treated as separate from the Main Entity and any other Permanent Establishment of that Main Entity.

1.3.3 A Constituent Entity does not include an Entity that is an Excluded Entity.

Article 1.4. Ultimate Parent Entity

1.4.1 Ultimate Parent Entity means either:

• (a) an Entity that:
  1. owns directly or indirectly a Controlling Interest in any other Entity; and
  2. is not owned, with a Controlling Interest, directly or indirectly by another Entity; or
• (b) the Main Entity of a Group that is within Article 1.2.3.

Article 1.5. Excluded Entity

1.5.1 An Excluded Entity is an Entity that is:

• (a) a Governmental Entity;
• (b) an International Organisation;
• (c) a Non-profit Organisation;
• (d) a Pension Fund;
• (e) an Investment Fund that is an Ultimate Parent Entity; or
• (f) a Real Estate Investment Vehicle that is an Ultimate Parent Entity.

1.5.2 An Excluded Entity is also an Entity:

• (a) where at least 95% of the value of the Entity is owned (directly or through a chain of Excluded Entities) by one or more Excluded Entities referred to in Article 1.5.1 (other than a Pension Services Entity) and where that Entity:
  1. operates exclusively or almost exclusively to hold assets or invest funds for the benefit of the Excluded Entity or Entities; and/or
  2. only carries out activities that are ancillary to those carried out by the Excluded Entity or Entities.
• (b) where at least 85% of the value of the Entity is owned (directly or through a chain of Excluded Entities), by one or more Excluded Entities referred to in Article 1.5.1 (other than a Pension Services Entity) provided that substantially all of the Entity's income is Excluded Dividends or Excluded Equity Gain or Loss that is excluded from the computation of Pillar Two Income or Loss in accordance with Articles 3.2.1(b) or (c).

1.5.3 A Filing Constituent Entity may elect not to treat an Entity as an Excluded Entity under Articles 1.5.2 and 1.9. An election under this Article is a Five-Year Election.

Article 1.6 Sovereign Wealth Funds

1.6.1 Notwithstanding Article 1.4, a sovereign wealth fund that meets the definition of a Governmental Entity is not an Ultimate Parent Entity.

1.6.2 Where the sovereign wealth fund described in Article 1.6.1 holds a direct Controlling Interest in an Entity, such Entity will be considered as the Ultimate Parent Entity of a Group provided that it:

• (a) owns directly or indirectly a Controlling Interest in another Entity, or

(b) is a Main Entity located in one Jurisdiction with one or more Permanent Establishments located in other Jurisdictions provided that the Main Entity is not a part of another Group described in Articles 1.2.2 or 1.6.2(a).

1.6.3 For the purposes of Article 1.6.2 and notwithstanding Article 1.2.2., a Group means the Ultimate Parent Entity referred to in Article 1.6.2 and:

(a) the Entities and Permanent Establishments referred to in Article 1.6.2(a) or (b); and

(b) the Entities that would have been excluded solely on size, materiality grounds or on the grounds that the Entity is held for sale if the Ultimate Parent Entity referred to in Article 1.6.2 would have been required to prepare Consolidated Financial Statements.

Article 1.7. Permanent Establishments of Excluded Entities

1.7.1 Where a Main Entity is an Excluded Entity in accordance with Article 1.5.1, its Permanent Establishments will also be treated as Excluded Entities.

1.7.2 For purposes of Article 1.5.2, the activities undertaken by the Permanent Establishments of a Main Entity shall be considered for purposes of determining whether the Main Entity meets the requirements in subparagraphs (i) or (ii) of Article 1.5.2(a), or Article 1.5.2(b). Where the requirements are met, the Permanent Establishments of the Main Entity will also be considered as Excluded Entities in accordance with Article 1.5.2.

Article 1.8 Excluded Entity held by an Investment Fund or a Real Estate Investment Vehicle that is not a Group Entity

1.8.1 For purposes of Article 1.5.2, the condition that requires a Group Entity to be owned (directly or through a chain of Excluded Entities) by one or more Excluded Entities referred to in Article 1.5.1 is deemed to be met where the first-mentioned Entity is held by an Investment Fund or a Real Estate Investment Vehicle that is not a Group Entity.

Article 1.9. Entities held by Non-profit Organisations

1.9.1 An Entity will be treated as an Excluded Entity provided that the following conditions are met:

(a) 100% of its value is owned directly or indirectly by one or more Non-profit Organisations;

(b) the aggregate revenue of the Group of which the Entity is a member is less than EUR 750 million if the revenue of the Non-profit Organisations and Excluded Entities under Article 1.5.2 were ignored; and

(c) the revenue of the Entity and all other Entities that are not Non-Profit Organizations and are not Excluded Entities under Article 1.5.2 is less than 25% of the revenue of the MNE Group.

1.9.2 Where the Fiscal Year of the MNE Group is a period other than 12 months, the computation under Article 1.9.1 (b) shall be adjusted in accordance with Article 1.1.2.

Article 2

Charging Provision

2.1 The following Entities shall pay the Top-up Tax for a Fiscal Year:

(a) Constituent Entities located in the UAE during that Fiscal Year, including those that are members of a Minority-owned Subgroup.

(b) Joint Ventures and JV Subsidiaries located in the UAE during that Fiscal Year;

(c) Stateless Constituent Entities created in accordance with the laws of the UAE and that are Reverse Hybrid Entities, with respect to any of their Pillar Two Income or Loss as allocated and computed in accordance with this Decision.

2.2 Notwithstanding Article 2.1:

(a) the Constituent Entities of the Domestic Main Group and a Domestic Minority-owned Subgroup, may appoint a Domestic Designated Filing Entity to pay the Top-up Tax on behalf of the members of their Domestic Groups;

(b) the Joint Venture and JV Subsidiaries of a Domestic JV Group may appoint a Domestic Designated Filing Entity to pay the Top-up Tax on behalf of the members of their Domestic JV Group; and

(c) the Reverse Hybrid Entities referred to in Article 2.1 (c), may appoint a Domestic Designated Filing Entity that is a member of the Domestic Main Group or Domestic Minority-owned Subgroup to pay its Top-up Tax.

2.3 An Investment Entity located in the UAE is not subject to the Top-up Tax.

Article 3

Computation of Pillar Two Income or Loss

Article 3.1. Financial Accounts for the Determination of the Pillar Two Income or Loss

3.1.1 The Pillar Two Income or Loss of each Constituent Entity is the Financial Accounting Net Income or Loss determined for the Constituent Entity for the Fiscal Year adjusted for the items described in Article 3.2 to Article 3.5.

3.1.2 The Financial Accounting Net Income or Loss of a Constituent Entity for the Fiscal Year shall be determined in accordance with its standalone financial statements prepared in accordance with IFRS where:

(a) all of the Constituent Entities located in the UAE are required to prepare standalone financial statements in accordance with Federal Decree-Law No. 47 of 2022 or the applicable laws of the UAE;

(b) all of the standalone financial statements of the Constituent Entities located in the UAE are prepared in accordance with IFRS; and

(c) the financial year of all of the separate financial statements of the Constituent Entities located in the UAE is the same as the Fiscal Year of the Consolidated Financial Statements of the Ultimate Parent Entity.

3.1.3 Where the conditions of Article 3.1.2 are not met, the Financial Accounting Net Income or Loss is the net income or loss determined for a Constituent Entity in preparing Consolidated Financial Statements of the Ultimate Parent Entity and shall not include consolidation adjustments attributable to:

(a) intragroup transactions unless Article 3.2.8 applies;

(b) purchase price allocation where a Group Entity acquires a Controlling Interest in an Entity as a result of a business combination, unless the following conditions are satisfied:

i. the acquisition date is prior to 1 December 2021; and

ii. the MNE Group does not have sufficient records to determine its Financial Accounting Net Income or Loss based on the unadjusted carrying values of the acquired assets and liabilities.

The Financial Accounting Net Income or Loss shall include other consolidation adjustments not referred to in paragraphs (a) and (b) that are reflected in the Financial Accounting Net Income or Loss to the extent they can reliably and consistently be traced to the relevant Entity.

3.1.4 If it is not reasonably practicable to determine the Financial Accounting Net Income or Loss for a Constituent Entity based on the accounting standard used in the preparation of Consolidated Financial Statements of the Ultimate Parent Entity in accordance with Article 3.1.3, the Financial Accounting Net Income or Loss for the Constituent Entity for the Fiscal Year may be determined using another Acceptable Financial Accounting Standard or an Authorised Financial Accounting Standard (adjusted to prevent Material Competitive Distortions) if:

(a) the financial accounts of the Constituent Entity are maintained based on that accounting standard;

(b) the information contained in the financial accounts is reliable; and

(c) permanent differences in excess of EUR 1 million that arise from the application of a particular principle or standard to items of income or expense or transactions that differs from the financial standard used in the preparation of the Consolidated Financial Statements of the Ultimate Parent Entity are conformed to the treatment required under the accounting standard used in the Consolidated Financial Statements of the Ultimate Parent Entity.

3.1.5 Articles 3.1.1 to 3.1.4 shall apply separately to a:

(a) Joint Venture and JV Subsidiaries of a Domestic JV Group; and

(b) Reverse Hybrid Entity created in accordance with the laws of the UAE.

Article 3.2. Adjustments to Determine the Pillar Two Income or Loss

3.2.1 A Constituent Entity's Financial Accounting Net Income or Loss is adjusted for the following items to arrive at that Entity's Pillar Two Income or Loss:

(a) Net Taxes Expense;

(b) Excluded Dividends;

(c) Excluded Equity Gain or Loss;

(d) Included Revaluation Method Gain or Loss;

(e) Gain or loss from disposition of assets and liabilities excluded under Article 6.3;

(f) Asymmetric Foreign Currency Gains or Losses;

(g) Policy Disallowed Expenses;

(h) Prior Period Errors and Changes in Accounting Principles;

(i) Accrued Pension Expense;

(j) Accrued Pension Income; and

(k) Excluded Insurance Reserves Expense.

3.2.2 At the election of the Filing Constituent Entity, a Constituent Entity may substitute in the computation of its Pillar Two Income or Loss the amount of stock-based compensation allowed as a deduction in the computation of its taxable income in the UAE for the amount expensed in its financial accounts for a cost or expense of such Constituent Entity that was paid with stock-based compensation, to the extent that such deduction is allowed under the Federal Decree-Law No. 47 of 2022. If the stock-based compensation expense arises in connection with an option that expires without exercise, the Constituent Entity must include the total amount previously deducted in the computation of its Pillar Two Income or Loss for the Fiscal Year in which the option expires. The election is a Five-Year Election and must be applied consistently to the stock-based compensation of all Constituent Entities located in the UAE for the year in which the election is made and all subsequent Fiscal Years. If the election is made in a Fiscal Year after some of the stock-based compensation of a transaction has been recorded in the financial accounts, the Constituent Entity must include in the computation of its Pillar Two Income or Loss for that Fiscal Year an amount equal to the excess of the cumulative amount allowed as an expense in the computation of its Pillar Two Income or Loss in previous Fiscal Years over the cumulative amount that would have been allowed as an expense if the election had been in place in those Fiscal Years. If the election is revoked, the Constituent Entity must include in the computation of its Pillar Two Income or Loss for the revocation year the amount deducted pursuant to the election that exceeds financial accounting expense accrued in respect of the stock-based compensation that has not been paid.

3.2.3 Transactions between Constituent Entities are subject to the following:

(a) when a transaction between Constituent Entities located in different Jurisdictions is not recorded in the same amount in the financial accounts of both Constituent Entities, or an asset is transferred at the disposing entity's carrying value or is not recorded consistently with the Arm's Length Principle, the Pillar Two Income or Loss of the Constituent Entities that are party to the transaction must be adjusted so that the transaction is recorded in the same amount and consistently with the Arm's Length Principle unless the adjustment is a unilateral adjustment and making such an adjustment would result in double taxation or double non-taxation under this Decision;

(b) a loss from a sale or other transfer of an asset between two Constituent Entities located in the UAE that is not recorded consistent with the Arm's Length Principle shall be recomputed based on the Arm's Length Principle if that loss is included in the computation of Pillar Two Income or Loss;

(c) rules for allocating income or loss between a Main Entity and its Permanent Establishments are found in Article 3.4.

3.2.4 Qualified Refundable Tax Credits and Marketable Transferable Tax Credit shall be treated as income in the computation of Pillar Two Income or Loss of a Constituent Entity. Non-Qualified Refundable Tax Credits and Non-Marketable Transferable Tax Credits shall not be treated as income in the computation of Pillar Two Income or Loss of a Constituent Entity.

3.2.5 With respect to assets and liabilities that are subject to fair value or impairment accounting in the Consolidated Financial Statements, a Filing Constituent Entity may elect to determine gains and losses using the realisation principle for purposes of computing Pillar Two Income. The election is a Five-Year Election and applies to all Constituent Entities located in the UAE to which the election applies. The election applies to all assets and liabilities of such Constituent Entities, unless the Filing Constituent Entity chooses to limit the election to tangible assets of such Constituent Entities or to Constituent Entities that are Investment Entities. Under this election:

(a) all gains or losses attributable to fair value or impairment accounting with respect to an asset or liability shall be excluded from the computation of Pillar Two Income or Loss;

(b) the carrying value of an asset or liability for purposes of determining gain or loss shall be its carrying value adjusted for accumulated depreciation at the later of:

(i) the first day of the election year, or

(ii) the date the asset was acquired or liability was incurred; and

(c) if the election is revoked, the Pillar Two Income or Loss of the Constituent Entities is adjusted by the difference at the beginning of the revocation year between the fair value of the asset or liability and the carrying value of the asset or liability determined pursuant to the election and adjusted for accumulated depreciation.

3.2.6 Where there is Aggregate Asset Gain in the UAE in a Fiscal Year, the Filing Constituent Entity may make, under this Article 3.2.6, an Annual Election for the UAE to adjust Pillar Two Income or Loss with respect to each previous Fiscal Year in the Look-back Period in the manner described in paragraphs (b) and (c) and to spread any remaining Adjusted Asset Gain over the Look-back Period in the manner described in paragraph (d). The Effective Tax Rate and Top-up Tax, if any, for any previous Fiscal Year must be re-calculated under Article 5.4.1. When an election is made under this Article:

(a) Covered Taxes with respect to any Net Asset Gain or Net Asset Loss in the Election Year shall be excluded from the computation of Adjusted Covered Taxes.

(b) The Aggregate Asset Gain in the Election Year shall be carried-back to the earliest Loss Year and set-off ratably against any Net Asset Loss of any Constituent Entity located in the UAE.

(c) If, for any Loss Year, the Adjusted Asset Gain exceeds the total amount of Net Asset Loss of all Constituent Entities located in the UAE, the Adjusted Asset Gain shall be carried forward to the following Loss Year (if any) and applied ratably against any Net Asset Loss of any Constituent Entity located in the UAE.

(d) Any Adjusted Asset Gain that remains after the application of paragraphs (b) and (c) shall be allocated evenly to each Fiscal Year in the Look-back Period. The Allocated Asset Gain for the relevant year shall be included in the computation of Pillar Two Income or Loss for a Constituent Entity located in the UAE in that year in accordance with the following formula:

For the purposes of the above formula, a specified Constituent Entity is a Constituent Entity that has Net Asset Gain in the Election Year and was located in the UAE in the relevant year. If there is no specified Constituent Entity for a relevant year the Adjusted Asset Gain allocated to that year will be allocated equally to each Constituent Entity in the UAE in that year.

3.2.7 The computation of a Low-Tax Entity's Pillar Two Income or Loss shall exclude any expense attributable to an Intragroup Financing Arrangement that can reasonably be anticipated, over the expected duration of the arrangement to:

(a) increase the amount of expenses taken into account in calculating the Pillar Two Income or Loss of the Low-Tax Entity;

(b) without resulting in a commensurate increase in the taxable income of the High-Tax Counterparty. An amount received or receivable should not be treated as increasing the taxable income of a High-Tax Counterparty if it is eligible for an exclusion, exemption, deduction, credit or other tax benefit under local law and the amount of that benefit is calculated by reference to the amount received or receivable.

3.2.8 An Ultimate Parent Entity may elect to apply its consolidated accounting treatment to eliminate income, expense, gains, and losses from transactions between Constituent Entities that are located, and included in a tax consolidation group, in the UAE for purposes of computing each such Constituent Entity's Net Pillar Two Income or Loss. The election under this Article is a Five-Year Election. Upon making or revoking such election, appropriate adjustments shall be made for the purposes of this Decision such that there shall not be duplications or omissions of items of Pillar Two Income or Loss as a result of having made or revoked the election.

3.2.9 An insurance company shall exclude from the computation of Pillar Two Income or Loss amounts charged to policyholders for Taxes paid by the insurance company in respect of returns to the policy holders. An insurance company shall include in the computation of Pillar Two Income or Loss any returns to policyholders that are not reflected in Financial Accounting Net Income or Loss to the extent the corresponding increase or decrease in liability to the policyholders is reflected in its Financial Accounting Net Income or Loss.

3.2.10 Amounts recognised as a decrease to the equity of a Constituent Entity attributable to distributions paid or payable in respect of Additional Tier One Capital and Restricted Tier One Capital issued by the Constituent Entity shall be treated as an expense in the computation of its Pillar Two Income or Loss. Amounts recognised as an increase to the equity of a Constituent Entity attributable to distributions received or receivable in respect of Additional Tier One Capital held by the Constituent Entity shall be included in the computation of its Pillar Two Income or Loss.

3.2.11 A Constituent Entity's Financial Accounting Net Income or Loss must be adjusted as necessary to reflect the requirements of the relevant provisions of Articles 6 and 7.

3.2.12 At the election of the Filing Constituent Entity, a Constituent Entity may exclude income attributable to a Qualified Debt Release from the computation of a Constituent Entity's Pillar Two Income or Loss.

3.2.13 Notwithstanding Article 3.2.1(b), a Filing Constituent Entity may make a Five-Year Election for each Constituent Entity to include in the computation of Pillar Two Income all dividends with respect to Portfolio Shareholdings, regardless of whether these are Short-term Portfolio Shareholdings.

3.2.14 Notwithstanding Article 3.2.1(c), a Filing Constituent Entity may make a Five-Year Election to treat foreign exchange gains or losses as an Excluded Equity Gain or Loss, to the extent that:

(a) such foreign exchange gains or losses are attributable to hedging instruments that hedge the currency exchange rate risk in Ownership Interests other than Portfolio Shareholdings;

(b) such gain or loss is recognised in Other Comprehensive Income at the level of the Consolidated Financial Statements; and

(c) the hedging instrument is considered an effective hedge under the Authorized Financial Accounting Standard used in the preparation of the Consolidated Financial Statements.

Article 3.3. International Shipping Income exclusion

3.3.1 For an MNE Group that has International Shipping Income, each Constituent Entity's International Shipping Income and Qualified Ancillary International Shipping Income shall be excluded from the computation of its Pillar Two Income or Loss under Article 3.2 for the Jurisdiction in which it is located. Where the computation of a Constituent Entity's International Shipping Income or Qualified Ancillary International Shipping Income results in a loss, the loss shall be excluded from the computation of its Pillar Two Income or Loss.

3.3.2 International Shipping Income means the net income obtained by a Constituent Entity from:

(a) the transportation of passengers or cargo by ships that it operates in international traffic, whether the ship is owned, leased or otherwise at the disposal of the Constituent Entity;

(b) the transportation of passengers or cargo by ships operated in international traffic under slot-chartering arrangements;

(c) leasing a ship, to be used for the transportation of passengers or cargo in international traffic, on charter fully equipped, crewed and supplied;

(d) leasing a ship on a bare boat charter basis, for the use of transportation of passengers or cargo in international traffic, to another Constituent Entity;

(e) the participation in a pool, a joint business or an international operating agency for the transportation of passengers or cargo by ships in international traffic; and

(f) the sale of a ship used for the transportation of passengers or cargo in international traffic provided that the ship has been held for use by the Constituent Entity for a minimum of one year.

International Shipping Income shall not include net income obtained from the transportation of passengers or cargo by ships via inland waterways within the same Jurisdiction.

3.3.3 Qualified Ancillary International Shipping Income means net income obtained by a Constituent Entity from the following activities that are performed primarily in connection with the transportation of passengers or cargo by ships in international traffic:

(a) leasing a ship on a bare boat charter basis to another shipping enterprise that is not a Constituent Entity, provided that the charter does not exceed three years;

(b) sale of tickets issued by other shipping enterprises for the domestic leg of an international voyage;

(c) leasing and short-term storage of containers or detention charges for the late return of containers;

(d) provision of services to other shipping enterprises by engineers, maintenance staff, cargo handlers, catering staff, and customer services personnel; and

(e) investment income where the investment that generates the income is made as an integral part of the carrying on the business of operating the ships in international traffic.

3.3.4 The aggregated Qualified Ancillary International Shipping Income of all Constituent Entities located in a Jurisdiction shall not exceed 50% of those Constituent Entities' International Shipping Income.

3.3.5 The costs incurred by a Constituent Entity that are directly attributable to its international shipping activities listed in Article 3.3.2 and the costs directly attributable to its qualified ancillary activities listed in Article 3.3.3 shall be deducted from the Constituent Entity's revenues from such activities to compute its International Shipping Income and Qualified Ancillary International Shipping Income. Other costs incurred by a Constituent Entity that are indirectly attributable to a Constituent Entity's international shipping activities and qualified ancillary activities shall be allocated on the basis of the Constituent Entity's revenues from such activities in proportion to its total revenues. All direct and indirect costs attributed to a Constituent Entity's International Shipping Income and Qualified Ancillary International Shipping Income shall be excluded from the computation of its Pillar Two Income or Loss.

3.3.6 In order for a Constituent Entity's International Shipping Income and Qualified Ancillary International Shipping Income to qualify for the exclusion from its Pillar Two Income or Loss under this Article, the Constituent Entity must demonstrate that the strategic or commercial management of all ships concerned is effectively carried on from within the Jurisdiction where the Constituent Entity is located.

Article 3.4. Allocation of Income or Loss between a Main Entity and a Permanent Establishment

3.4.1 The Financial Accounting Net Income or Loss of a Constituent Entity that is a Permanent Establishment in accordance with paragraphs (a), (b) and (c) of the definition in Article 18.1 is the net income or loss reflected in the separate financial accounts of the Permanent Establishment. If the Permanent Establishment does not have separate financial accounts, then the Financial Accounting Net Income or Loss is the amount that would have been reflected in its separate financial accounts if prepared on a standalone basis and in accordance with the accounting standard used in the preparation of the Consolidated Financial Accounts of the Ultimate Parent Entity.

3.4.2 The Financial Accounting Net Income or Loss of a Permanent Establishment referred to in Article 3.4.1 shall be adjusted, if necessary:

(a) in the case of a Permanent Establishment as defined by paragraphs (a) and (b) of the definition in Article 18.1, to reflect only the amounts and items of income and expense that are attributable to the Permanent Establishment in accordance with the applicable Tax Treaty or domestic law of the Jurisdiction where it is located regardless of the amount of income subject to tax and the amount of deductible expenses in that Jurisdiction;

(b) in the case of a Permanent Establishment as defined by paragraph (c) of the definition in Article 18.1, to reflect only the amounts and items of income and expense that would have been attributed to it in accordance with Article 7 of the OECD Model Tax Convention.

3.4.3 In case of a Constituent Entity that is a Permanent Establishment in accordance with paragraph (d) of the definition in Article 18.1, its income used for computing Financial Accounting Net Income or Loss is the income being exempted in the Jurisdiction where the Main Entity is located and attributable to the operations conducted outside that Jurisdiction. The expenses used for computing Financial Accounting Net Income or Loss are those that are not deducted for taxable purposes in the Jurisdiction where the Main Entity is located and that are attributable to such operations.

3.4.4 The Financial Accounting Net Income or Loss of a Permanent Establishment is not taken into account in determining the Pillar Two Income or Loss of the Main Entity, except as provided in Article 3.4.5.

3.4.5 A Pillar Two Loss of a Permanent Establishment shall be treated as an expense of the Main Entity (and not of the Permanent Establishment) for purposes of computing its Pillar Two Income or Loss to the extent that the loss of the Permanent Establishment is treated as an expense in the computation of the domestic taxable income of such Main Entity and is not set off against an item of income that is subject to tax under the laws of both the Jurisdiction of the Main Entity and the Jurisdiction of the Permanent Establishment. Pillar Two Income subsequently arising in the Permanent Establishment shall be treated as Pillar Two Income of the Main Entity (and not the Permanent Establishment) up to the amount of the Pillar Two Loss that previously was treated as an expense for purposes of computing the Pillar Two Income or Loss of the Main Entity.

Article 3.5. Allocation of Income or Loss from a Flow-through Entity

3.5.1 The Financial Accounting Net Income or Loss of a Constituent Entity that is a Flow-through Entity is allocated as follows:

(a) in the case of a Permanent Establishment through which the business of the Entity is wholly or partly carried out, the Financial Accounting Net Income or Loss of the Entity is allocated to that Permanent Establishment in accordance with Article 3.4;

(b) in the case of a Tax Transparent Entity that is not the Ultimate Parent Entity, any Financial Accounting Net Income or Loss remaining after application of paragraph (a) is allocated to its Constituent Entity-owners in accordance with their Ownership Interests; and

(c) in the case of a Tax Transparent Entity that is the Ultimate Parent Entity or a Reverse Hybrid Entity, any Financial Accounting Net Income or Loss remaining after application of paragraph (a) is allocated to it.

3.5.2 The rules of Article 3.5.1 shall be applied separately with respect to each Ownership Interest in the Flow-through Entity.

3.5.3 Prior to the application of Article 3.5.1, the Financial Accounting Net Income or Loss of a Flow-through Entity shall be reduced by the amount allocable to its owners that are not Group Entities and that hold their Ownership Interest in the Flow-through Entity directly or through a Tax Transparent Structure.

3.5.4 Article 3.5.3 does not apply to:

(a) an Ultimate Parent Entity that is a Flow-through Entity; or

(b) any Flow-through Entity owned by such an Ultimate Parent Entity (directly or through a Tax Transparent Structure).

The treatment of these Entities is addressed in Article 7.1.

3.5.5 The Financial Accounting Net Income or Loss of a Flow-through Entity is reduced by the amount that is allocated to another Constituent Entity.

3.5.6 The direct or indirect owner of an Ownership Interest in a Tax Transparent Entity shall treat any tax credits that flows-through a Tax Transparent Entity as tax credits of the owner. The allocation of the tax credits shall be allocated in the same proportion as the Financial Accounting Income or Loss allocated to the owners in accordance with Articles 3.5.1 to 3.5.5. Where the tax credits are allocated differently to the owners in accordance with the domestic tax law of the Jurisdictions where the owners are located and the Tax Transparent Entity is created, then the allocation of the tax credit under this provision shall follow such allocation made under the domestic laws.

3.5.7 The provisions of Article 3.5.6 shall not apply where a Filing Constituent Entity makes an Equity Investment Inclusion Election or in the case of a Qualified Flow-through Tax Benefit. In those cases, Article 7.5 shall apply.

Article 4

Computation of Adjusted Covered Taxes

Article 4.1. Adjusted Covered Taxes

4.1.1 The Adjusted Covered Taxes of a Constituent Entity for the Fiscal Year shall be equal to the current tax expense accrued in its Financial Accounting Net Income or Loss with respect to Covered Taxes for the Fiscal Year adjusted by:

(a) the net amount of its Additions to Covered Taxes for the Fiscal Year (as determined under Article 4.1.2) and Reductions to Covered Taxes for the Fiscal Year (as determined under Article 4.1.3);

(b) the Total Deferred Tax Adjustment Amount (as determined under Article 4.4); and

(c) any increase or decrease in Covered Taxes recorded in equity or Other Comprehensive Income relating to amounts included in the computation of Pillar Two Income or Loss that will be subject to tax under local tax rules.

4.1.2 The Additions to Covered Taxes of a Constituent Entity for the Fiscal Year is the sum of:

(a) any amount of Covered Taxes accrued as an expense in the profit before taxation in the financial accounts;

(b) any amount of Pillar Two Loss Deferred Tax Asset used under Article 4.5.3;

(c) any amount of Covered Taxes that is paid in the Fiscal Year and that relates to an uncertain tax position where that amount has been treated for a previous Fiscal Year as a Reduction to Covered Taxes under Article 4.1.3(d); and

(d) any amount of credit, refund or the transferable amount in respect of a Qualified Refundable Tax Credit or of a Marketable Transferable Tax Credit that is recorded as a reduction to the current tax expense.

4.1.3 The Reductions to Covered Taxes of a Constituent Entity for the Fiscal Year is the sum of:

(a) the amount of current tax expense with respect to income excluded from the computation of Pillar Two Income or Loss under Article 3;

(b) any amount of credit, refund or the transferable amount in respect of a tax credit that is not recorded as a reduction to the current tax expense and that is not derived from a Qualified Refundable Tax Credit or Marketable Transferable Tax Credit;

(c) any amount of Covered Taxes refunded or credited to a Constituent Entity, or the amount received by the Constituent Entity for the transfer of a tax credit, that was not treated as an adjustment to current tax expense in the financial accounts, except where they are derived from a Qualified Refundable Tax Credit or a Marketable Transferable Tax Credit;

(d) the amount of current tax expense which relates to an uncertain tax position; and

(e) any amount of current tax expense that is not expected to be paid within three years of the last day of the Fiscal Year.

4.1.4 No amount of Covered Taxes may be taken into account more than once.

4.1.5 In a Fiscal Year in which there is no Net Pillar Two Income in the UAE, if the Adjusted Covered Taxes for the UAE are less than zero and less than the Expected Adjusted Covered Taxes Amount, the Constituent Entities located in the UAE shall be treated as having Additional Current Top-up Tax in the UAE under Article 5.4 arising in the current Fiscal Year equal to the difference between these amounts. The Expected Adjusted Covered Taxes Amount is equal to the Pillar Two Income or Loss for the UAE multiplied by the Minimum Rate.

4.1.6 A Filing Constituent Entity may make an Annual Election to substitute the Additional Current Top-up Tax referred to in Article 4.1.5 with an excess negative tax expense carry-forward in accordance with the following:

(a) the excess negative tax expense for a Fiscal Year shall be equal to the amount computed under Article 4.1.5 for that Fiscal Year;

(b) the excess negative tax expense carry-forward must be utilised in all relevant subsequent computations of the Jurisdictional Effective Tax Rate;

(c) in each subsequent Fiscal Year in which there are positive Pillar Two Income and Adjusted Covered Taxes in the UAE, the aggregate Adjusted Covered Taxes shall be reduced (but not below zero) by the remaining balance of the excess negative tax expense carry-forward and the balance of such carry-forward shall be reduced by the same amount;

(d) the excess negative tax expense attributable to an amount of a loss that is carried back and applied against income for prior taxable years for domestic tax purposes must be taken into account in the current Fiscal Year under Article 4.1.5 and cannot be included in the excess negative tax expense carry-forward;

(e) the negative amount of Adjusted Covered Taxes will not be less than the Expected Covered Taxes Amount under Article 4.1.5;

(f) the excess negative tax expense carry-forward shall remain an attribute of a transferor group where the MNE Group disposes of one or more Constituent Entities in the UAE;

(g) where the MNE Group disposes of all Constituent Entities located in the UAE and re-acquires or establishes Constituent Entities located in the UAE in a subsequent Fiscal Year, the balance of the excess negative tax expense carry-forward shall be taken into account in determining the Adjusted Covered Taxes for the UAE beginning with such Fiscal Year; and

(h) the MNE Group shall maintain a record of the outstanding balance of the excess negative tax expense carry-forward.

Article 4.2. Definition of Covered Taxes

4.2.1 Covered Taxes means:

(a) Taxes recorded in the financial accounts of a Constituent Entity with respect to its income or profits or its share of the income or profits of a Constituent Entity in which it owns an Ownership Interest;

(b) Taxes imposed in lieu of a generally applicable corporate income tax; and

(c) Taxes levied by reference to retained earnings and corporate equity, including a Tax on multiple components based on income and equity.

4.2.2 Covered Taxes does not include any amount of:

(a) Top-up Tax accrued by a Parent Entity under a Qualified IIR in another Jurisdiction;

(b) Top-up Tax accrued by a Constituent Entity under a Qualified Domestic Minimum Top-up Tax in another Jurisdiction;

(c) Taxes attributable to an adjustment made by a Constituent Entity as a result of the application of a Qualified UTPR in another Jurisdiction;

(d) A Disqualified Refundable Imputation Tax;

(e) Taxes paid by an insurance company in respect of returns to policyholders.

Article 4.3. Allocation of Covered Taxes from one Constituent Entity to another Constituent Entity

4.3.1 Article 4.3.2 applies to the allocation of Covered Taxes in respect of Permanent Establishments, Tax Transparent Entities and Hybrid Entities as well as the allocation of CFC taxes and taxes on distributions from one Constituent Entity to another.

4.3.2 The following provisions apply with respect to Covered Taxes allocated from one Constituent Entity to another Constituent Entity:

(a) in relation to Covered Taxes on income attributable to a Permanent Establishment:

i. no amount of Covered Taxes included in the financial accounts of a Main Entity located outside the UAE and charged by another Jurisdiction shall be allocated to a Permanent Establishment located in the UAE; and

ii. no amount of Covered Taxes included in the financial accounts of a Main Entity located in the UAE allocable to a Permanent Establishment located outside the UAE in accordance with Article 4.3.2(a) of the Pillar Two Model Rules shall be allocated to the Main Entity;

(b) the amount of any Covered Taxes included in the financial accounts of a Tax Transparent Entity with respect to Pillar Two Income or Loss allocated to a Constituent Entity-owner pursuant to Article 3.5.1(b) is allocated to that Constituent Entity-owner;

(c) in the case of Covered Taxes that arise from a Controlled Foreign Company Tax Regime, no amount of Covered Taxes included in the financial accounts of a Constituent Entity-owner located outside the UAE shall be allocated to a Constituent Entity located in the UAE;

(d) in the case of a Constituent Entity that is a Hybrid Entity located in the UAE, no amount of Covered Taxes included in the financial accounts of a Constituent Entity-owner located outside the UAE on income of such Hybrid Entity shall be allocated to the Hybrid Entity located in the UAE; and

(e) no amount of Covered Taxes payable outside the UAE on distributions and deemed distributions made by a Constituent Entity located in the UAE to a Constituent Entity-owner located outside the UAE shall be allocated to the distributing Constituent Entity located in the UAE. For purposes of this paragraph, a deemed distributions refers to situations where the underlying interest is treated as an equity interest for tax purposes in the Jurisdiction imposing the tax and for financial accounting purposes.

4.3.3 In relation to Articles 4.3.2(c) and (d) of the Pillar Two Model Rules, an amount of Covered Taxes on Passive Income may be allocated to the Constituent Entity-owner located in the UAE in accordance with the following provisions:

(a) an amount of Covered Taxes, reflected in the financial statements of the direct or indirect Constituent Entity-owner, on their share of the income of the Constituent Entity located outside the UAE that is a controlled foreign company or a Hybrid Entity shall be determined as if it was allocated to the last-mentioned Entity;

(b) in respect of Passive Income, the amount referred in paragraph (a) shall be equal to the lesser of:

i. the amount of Covered Taxes referred in paragraph (a); or

ii. the Top-up Tax Percentage for the Constituent Entity's Jurisdiction, determined without regard to the amount referred in paragraph (a), multiplied by the amount of the Constituent Entity's Passive Income includible under a Controlled Foreign Company Tax Regime or fiscal transparency rule in the UAE;

(c) the amount of Covered Taxes that may be allocated to the direct or indirect Constituent Entity-owner located in the UAE is equal to the amount determined in accordance with paragraph (a) after subtracting that same amount after considering the limitation in paragraph (b).

4.3.4 Where the Pillar Two Income of a Permanent Establishment is treated as Pillar Two Income of the Main Entity pursuant to Article 3.4.5, any Covered Taxes arising in the location of the Permanent Establishment and associated with such income are treated as Covered Taxes of the Main Entity up to an amount not exceeding such income multiplied by the highest corporate tax rate on ordinary income in the Jurisdiction where the Main Entity is located.

Article 4.4. Mechanism to address temporary differences

4.4.1 The Total Deferred Tax Adjustment Amount for a Constituent Entity for the Fiscal Year is equal to the deferred tax expense accrued in its Financial Accounting Net Income or Loss if the applicable tax rate is below the Minimum Rate or, in any other case, such deferred tax expense recast at the Minimum Rate, with respect to Covered Taxes for the Fiscal Year subject to the adjustments set forth in Articles 4.4.2 and 4.4.3 and the following exclusions:

(a) The amount of deferred tax expense with respect to items excluded from the computation of Pillar Two Income or Loss under Article 3;

(b) The amount of deferred tax expense with respect to Disallowed Accruals and Unclaimed Accruals;

(c) The impact of a valuation adjustment or accounting recognition adjustment with respect to a deferred tax asset;

(d) The amount of deferred tax expense arising from a re-measurement with respect to a change in the applicable domestic tax rate; and

(e) The amount of deferred tax expense with respect to the generation and use of tax credits.

4.4.2 The Total Deferred Tax Adjustment Amount is adjusted as follows:

(a) Increased by the amount of any Unclaimed Accrual paid during the Fiscal Year;

(b) Increased by the amount of any Recaptured Deferred Tax Liability determined in a preceding Fiscal Year which has been paid during the Fiscal Year; and

(c) Reduced by the amount that would be a reduction to the Total Deferred Tax Adjustment Amount due to recognition of a loss deferred tax asset for a current year tax loss, where a loss deferred tax asset has not been recognised because the recognition criteria are not met.

4.4.3 If the taxpayer can demonstrate that a deferred tax asset recorded at a rate lower than the Minimum Rate is attributable to a Pillar Two Loss, such deferred tax asset may be recast at the Minimum Rate in the Fiscal Year in which the Pillar Two Loss was incurred. The Total Deferred Tax Adjustment Amount is reduced by the amount that a deferred tax asset is increased due to being recast under this Article.

4.4.4 To the extent a deferred tax liability, that is not a Recapture Exception Accrual, is taken into account under this Article and such amount is not paid within the five subsequent Fiscal Years, the amount must be recaptured pursuant to this Article. The amount of the Recaptured Deferred Tax Liability determined for the current Fiscal Year shall be treated as a reduction to Covered Taxes in the fifth preceding Fiscal Year and the Effective Tax Rate and Top-up Tax of such Fiscal Year shall be recalculated under the rules of Article 5.4.1. The Recaptured Deferred Tax Liability for the current Fiscal Year is the amount of the increase in a category of deferred tax liability that was included in the Total Deferred Tax Adjustment Amount in the fifth preceding Fiscal Year that has not reversed by the end of the last day of the current Fiscal Year, unless such amount relates to a Recapture Exception Accrual as set forth in Article 4.4.5.

4.4.5 Recapture Exception Accrual means the tax expense accrued attributable to changes in associated deferred tax liabilities, in respect of:

(a) Cost recovery allowances on tangible assets

(b) The cost of a licence or similar arrangement from the government for the use of immovable property or exploitation of natural resources that entails significant investment in tangible assets;

(c) Research and development expenses;

(d) De-commissioning and remediation expenses;

(e) Fair value accounting on unrealised net gains;

(f) Foreign currency exchange net gains;

(g) Insurance reserves and insurance policy deferred acquisition costs;

(h) Gains from the sale of tangible property located in the UAE that are reinvested in tangible property in the UAE; and

(i) Additional amounts accrued as a result of accounting principle changes with respect to categories (a) through (h).

4.4.6 Disallowed Accrual means:

(a) Any movement in deferred tax expense accrued in the financial accounts of a Constituent Entity which relates to an uncertain tax position; and

(b) Any movement in deferred tax expense accrued in the financial accounts of a Constituent Entity which relates to distributions from a Constituent Entity.

4.4.7 Unclaimed Accrual means any increase in a deferred tax liability recorded in the financial accounts of a Constituent Entity for a Fiscal Year that is not expected to be paid within the time period set forth in Article 4.4.4 and for which the Filing Constituent Entity makes an Annual Election not to include in Total Deferred Tax Adjustment Amount for such Fiscal Year.

4.4.8 Article 4.4.1(e) shall not apply to foreign tax credits that give rise to Substitute Loss Carry-forward Deferred Tax Assets to the extent that such foreign tax credits are used to offset tax liability on income included in the Constituent Entity's Pillar Two Income or Loss. The amount of a Substitute Loss Carry-forward Deferred Tax Asset is equal to the lesser of:

(a) the amount of the foreign tax credit in respect of the foreign source income inclusion that the domestic tax regime allows to be carried forward from the year in which the Constituent Entity had a tax loss (before taking into account any foreign source income) to a subsequent year; and

(b) the amount of the Constituent Entity's tax loss for the tax year (before taking into account any foreign source income) multiplied by the applicable domestic tax rate.

Article 4.5. The Pillar Two Loss Election

4.5.1 In lieu of applying the rules set forth in Article 4.4, a Filing Constituent Entity may make a Pillar Two Loss Election for the UAE. When a Pillar Two Loss Election is made for the UAE, a Pillar Two Loss Deferred Tax Asset is established in each Fiscal Year in which there is a Net Pillar Two Loss for the UAE. The Pillar Two Loss Deferred Tax Asset is equal to the Net Pillar Two Loss in a Fiscal Year for the UAE multiplied by the Minimum Rate.

4.5.2 The balance of the Pillar Two Loss Deferred Tax Asset is carried forward to subsequent Fiscal Years, reduced by the amount of Pillar Two Loss Deferred Tax Asset used in a Fiscal Year.

4.5.3 The Pillar Two Loss Deferred Tax Asset must be used in any subsequent Fiscal Year in which there is Net Pillar Two Income in the UAE in an amount equal to the lower of the Net Pillar Two Income multiplied by the Minimum Rate or the amount of available Pillar Two Loss Deferred Tax Asset.

4.5.4 If the Pillar Two Loss Election is subsequently revoked, any remaining Pillar Two Loss Deferred Tax Asset is reduced to zero, effective as of the first day of the first Fiscal Year in which the Pillar Two Loss Election is no longer applicable. Subsequently, the deferred tax assets and liabilities for each Constituent Entity in the UAE, if any, will be taken into account as if they had been calculated under Articles 4.4 and 9.1 for the prior Fiscal Year.

4.5.5 The Pillar Two Loss Election must be filed with the first Pillar Two Information Return of the MNE Group or with the first Top-up Tax Return of the MNE Group, whichever is filed earlier, or with both if they are required to be submitted for the first Fiscal Year in which the MNE Group has a Constituent Entity located in the Jurisdiction.

4.5.6 A Flow-through Entity that is a UPE of an MNE Group may make a Pillar Two Loss Election under this Article. When such an election is made, the Pillar Two Loss Deferred Tax Asset shall be calculated in accordance with Articles 4.5.1 to 4.5.5, however, the Pillar Two Loss Deferred Tax Asset shall be calculated with reference to the Pillar Two Loss of the Flow-through Entity after reduction in accordance with Article 7.1.2.

Article 4.6. Post-filing Adjustments and Tax Rate Changes

4.6.1 An adjustment to a Constituent Entity's liability for Covered Taxes for a previous Fiscal Year, including one that derives from a loss carried-back, recorded in the financial accounts shall be treated as an adjustment to Covered Taxes in the Fiscal Year in which the adjustment is made, unless the adjustment relates to a Fiscal Year in which there is a decrease in Covered Taxes for the UAE. In the case of a decrease in Covered Taxes included in the Constituent Entity's Adjusted Covered Taxes for a previous Fiscal Year, the Effective Tax Rate and Top-up Tax for such Fiscal Year must be recalculated under Article 5.4.1. In the Article 5.4.1 recalculations, the Adjusted Covered Taxes determined for the Fiscal Year shall be reduced by the amount of the decrease in Covered Taxes and Pillar Two Income determined for the Fiscal Year and any intervening Fiscal Years shall be adjusted as necessary and appropriate. A Filing Constituent Entity may make an Annual Election to treat an immaterial decrease in Covered Taxes as an adjustment to Covered Taxes in the Fiscal Year in which the adjustment is made. An immaterial decrease in Covered Taxes is an aggregate decrease of less than EUR 1 million in the Adjusted Covered Taxes determined for the UAE for a Fiscal Year.

4.6.2 The amount of deferred tax expense resulting from a reduction to the applicable domestic tax rate shall be treated as an adjustment under Article 4.6.1 to a Constituent Entity's liability for Covered Taxes claimed under Article 4.1 for a previous Fiscal Year when such reduction results in the application of a rate that is less than the Minimum Rate.

4.6.3 The amount of deferred tax expense, when paid, that has resulted from an increase to the applicable domestic tax rate shall be treated as an adjustment under Article 4.6.1 to a Constituent Entity's liability for Covered Taxes claimed under Article 4.1 for a previous Fiscal Year when such amount was originally recorded at a rate less than the Minimum Rate. This adjustment is limited to an amount that is equal to an increase of deferred tax expense up to such deferred tax expense recast at the Minimum Rate.

4.6.4 If more than EUR 1 million of the amount accrued by a Constituent Entity as current tax expense and included in Adjusted Covered Taxes for a Fiscal Year is not paid within three years of the last day of such year, the Effective Tax Rate and Top-up Tax for the Fiscal Year in which the unpaid amount was claimed as a Covered Tax must be recalculated in accordance with Article 5.4.1 by excluding such unpaid amount from Adjusted Covered Taxes.

Article 5

Computation of Effective Tax Rate and Top-up Tax

Article 5.1. Determination of Effective Tax Rate

5.1.1 The Effective Tax Rate of the MNE Group with Net Pillar Two Income shall be calculated for each Fiscal Year. The Effective Tax Rate of the MNE Group is equal to the sum of the Adjusted Covered Taxes of each Constituent Entity located in the UAE divided by the Net Pillar Two Income of the UAE for the Fiscal Year. For purposes of Article 5, each Stateless Constituent Entity subject to the provisions of this Decision shall be treated as if it was a single Constituent Entity located in the UAE.

5.1.2 The Net Pillar Two Income of the UAE for a Fiscal Year is the positive amount, if any, computed in accordance with the following formula:

Net Pillar Two Income = Pillar Two Income of all Constituent Entities – Pillar Two Losses of all Constituent Entities

Where:

(a) the Pillar Two Income of all Constituent Entities is the sum of the Pillar Two Income of all Constituent Entities located in the UAE determined in accordance with Article 3 for the Fiscal Year; and

(b) the Pillar Two Losses of all Constituent Entities is the sum of the Pillar Two Losses of all Constituent Entities located in the UAE determined in accordance with Article 3 for the Fiscal Year.

5.1.3 Adjusted Covered Taxes and Pillar Two Income or Loss of Constituent Entities that are Investment Entities are excluded from the determination of the Effective Tax Rate in Article 5.1.1 and the determination of Net Pillar Two Income in Article 5.1.2.

Article 5.2. Top-up Tax

5.2.1 The Top-up Tax Percentage for a Fiscal Year shall be the positive percentage point difference, if any, computed in accordance with the following formula:

Top up Tax Percentage = Minimum Rate - Effective Tax Rate

Where the Effective Tax Rate is the Effective Tax Rate determined in accordance with Article 5.1 for the Fiscal Year.

5.2.2 The Excess Profit for the Fiscal Year is the positive amount, if any, computed in accordance with the following formula:

Excess Profit = Net Pillar Two Income – Substance based Income Exclusion

Where:

(a) The Net Pillar Two Income is the Net Pillar Two Income of the UAE determined under Article 5.1.2 for the Fiscal Year; and

(b) The Substance-based Income Exclusion is the Substance-based Income Exclusion determined under Article 5.3 for the UAE for the Fiscal Year (if any).

5.2.3 The Top-up Tax for a Fiscal Year is equal to the positive amount, if any, computed in accordance with the following formula:

Top-up Tax = (Top-up Tax Percentage x Excess Profit) + Additional Current Top-up Tax

Where:

(a) The Top-up Tax Percentage is the percentage point difference determined in accordance with Article 5.2.1 for the Fiscal Year;

(b) The Excess Profit is the Excess Profit determined in accordance with Article 5.2.2 for the Fiscal Year; and

(c) The Additional Current Top-up Tax is the amount determined, or treated as Additional Current Top-up Tax, under Article 4.1.5 or Article 5.4.1 for the Fiscal Year.

5.2.4 Unless a Domestic Designated Filing Entity has been appointed to pay the Top-up Tax or except where Article 5.4.2 applies, the Top-up Tax of a Constituent Entity shall be determined for each Constituent Entity located in the UAE that has Pillar Two Income determined in accordance with Article 3 for the Fiscal Year included in the computation of Net Pillar Two Income of the UAE in accordance with the following formula:

Where:

(a) The Top-up Tax is the Top-up Tax determined in accordance with Article 5.2.3 for the Fiscal Year;

(b) The Pillar Two Income of the Constituent Entity is the Pillar Two Income of the Constituent Entity located in the UAE determined in accordance with Article 3.2 for the Fiscal Year;

(c) The aggregate Pillar Two Income of all Constituent Entities is the aggregate Pillar Two Income of all Constituent Entities located in the UAE that have Pillar Two Income for the Fiscal Year included in the computation of Net Pillar Two Income in accordance with Article 5.1.2.

5.2.5 Where a Domestic Designated Filing Entity has not been appointed to pay the Top-up Tax, the Top-up Tax is attributable to a recalculation under Article 5.4.1 and there is no Net Pillar Two Income in the UAE for the current Fiscal Year, the Top-up Tax shall be allocated using the formula in Article 5.2.4 based on the Pillar Two Income of the Constituent Entities in the Fiscal Years for which the recalculations under Article 5.4.1 were performed.

5.2.6 Where the Effective Tax Rate computed in accordance with Article 5.1.1 is less than zero and the Top-up Tax Percentage computed in accordance with Article 5.2.1 is above the Minimum Rate, the following provisions shall apply:

(a) the Excess Negative Tax Expense shall be excluded from its aggregate Adjusted Covered Taxes and an excess negative tax expense carry-forward shall be established;

(b) the Excess Negative Tax Expense for a Fiscal Year is equal to the negative Adjusted Covered Taxes for that Fiscal Year;

(c) the excess negative tax expense carry-forward must be utilised in all relevant subsequent computations of the Jurisdictional Effective Tax Rate;

(d) in each subsequent Fiscal Year in which there is positive Pillar Two Income and Adjusted Covered Taxes in the UAE, the aggregate Adjusted Covered Taxes shall be reduced (but not below to zero) by the remaining balance of the excess negative tax expense carry-forward and such carry-forward shall be reduced by the same amount;

(e) the excess negative tax expense attributable to an amount of a loss that is carried back and applied against income for prior taxable years for domestic tax purposes must be taken into account in the current Fiscal Year under Article 5.2.1 and cannot be included in the excess negative tax expense carry-forward;

(f) the excess negative tax expense carry-forward shall remain an attribute of a transferor group where the MNE Group disposes of one or more Constituent Entities in the UAE;

(g) where the MNE Group disposes of all Constituent Entities in the UAE and re-acquires or establishes Constituent Entities in the UAE in a subsequent Fiscal Year, the balance of the excess negative tax expense carry-forward shall be taken into account in determining the Adjusted Covered Taxes for the UAE beginning with such Fiscal Year;

(h) the MNE Group shall maintain a record of the outstanding balance of the excess negative tax expense carry-forward.

Article 5.3. Substance-based Income Exclusion

5.3.1 The Net Pillar Two Income for the UAE shall be reduced by the Substance-based Income Exclusion of the UAE to determine the Excess Profit for purposes of computing the Top-up Tax under Article 5.2. A Filing Constituent Entity of an MNE Group may make an Annual Election not to apply the Substance-based Income Exclusion by not computing the exclusion or claiming it in the computation of Top-up Tax in the Top-up Tax Return filed for the Fiscal Year.

5.3.2 The Substance-based Income Exclusion amount is the sum of the payroll carve-out and the tangible asset carve-out for each Constituent Entity, except for Constituent Entities that are Investment Entities, located in the UAE.

5.3.3 The payroll carve-out for a Constituent Entity located in the UAE is equal to 5% of its Eligible Payroll Costs of Eligible Employees that perform activities for the MNE Group in the UAE, except Eligible Payroll costs that are:

(a) capitalised and included in the carrying value of Eligible Tangible Assets;

(b) attributable to a Constituent Entity's International Shipping Income and Qualified Ancillary International Shipping Income under Article 3.3.5 that is excluded from the computation of Pillar Two Income or Loss for the Fiscal Year.

5.3.4 The tangible asset carve-out for a Constituent Entity located in the UAE is equal to 5% of the carrying value of Eligible Tangible Assets located in the UAE. Eligible Tangible Assets means:

(a) property, plant, and equipment located in the UAE;

(b) natural resources located in the UAE;

(c) a lessee's right of use of tangible assets located in the UAE; and

(d) a licence or similar arrangement from the government for the use of immovable property or exploitation of natural resources that entails significant investment in tangible assets.

For this purpose, the tangible asset carve-out computation shall not include the carrying value of property (including land or buildings) that is held for sale, lease or investment. The tangible asset carve-out computation shall not include the carrying value of tangible assets used in the generation of a Constituent Entity's International Shipping Income and Qualified Ancillary International Shipping Income (i.e. ships and other maritime equipment and infrastructure). The carrying value of tangible assets attributable to a Constituent Entity's excess income over the cap for Qualified Ancillary International Shipping Income under Article 3.3.4 shall be included in the tangible asset carve-out computation.

5.3.5 The computation of carrying value of Eligible Tangible Assets for purposes of Article 5.3.4 shall be based on the average of the carrying value (net of accumulated depreciation, amortisation, depletion, or impairment losses and including any amount attributable to capitalisation of payroll expense) at the beginning and ending of the Reporting Fiscal Year as recorded for the purposes of preparing the Consolidated Financial Statements of the Ultimate Parent Entity.

5.3.6 For purposes of Articles 5.3.3 and 5.3.4, the Eligible Payroll Costs and Eligible Tangible Assets of a Constituent Entity that is a Permanent Establishment are those included in its separate financial accounts as determined by Article 3.4.1 and adjusted in accordance with Article 3.4.2, provided that the Eligible Employees and Eligible Tangible Assets are located in the Jurisdiction where the Permanent Establishment is located. The Eligible Payroll Costs and Eligible Tangible Assets of a Permanent Establishment are not taken into account for the Eligible Payroll Costs and Eligible Tangible Assets of the Main Entity. The Eligible Payroll Costs and Eligible Tangible Assets of a Permanent Establishment whose income has been wholly or partly excluded in accordance with Articles 3.5.3 and 7.1.4 are excluded from the Substance-based Income Exclusion computations of the MNE Group in the same proportion.

5.3.7 For purposes of Articles 5.3.3 and 5.3.4, Eligible Payroll Costs and Eligible Tangible Assets of a Flow-through Entity that are not allocated under Article 5.3.6 are allocated as follows:

(a) if the Financial Accounting Net Income or Loss of the Flow-through Entity has been allocated to the Constituent Entity-owner under Article 3.5.1(b), then the Entity's Eligible Payroll Costs and Eligible Tangible Assets are allocated in the same proportion to the Constituent Entity-owner provided it is located in the Jurisdiction where the Eligible Employees and Eligible Tangible Assets are located;

(b) if the Flow-through Entity is the Ultimate Parent Entity, then Eligible Payroll Costs and Eligible Tangible Assets located in the Jurisdiction where the Ultimate Parent Entity is located are allocated to it and reduced in proportion to the income that is excluded under Article 7.1.1; and

(c) all other Eligible Payroll Costs and Eligible Tangible Assets of the Flow-through Entity are excluded from the Substance-based Income Exclusion computations of the MNE Group.

5.3.8 A Filing Constituent Entity may claim only a subset of the total Eligible Payroll Costs and Eligible Tangible Assets when calculating the Substance-based Income Exclusion amount under the provisions of this Decision.

5.3.9 Eligible Payroll Costs and Eligible Tangible Assets attributable to income excluded under Article 7.2.1 shall be excluded from the computation of the Substance-based Income Exclusion. The amount excluded under this provision is equal to the total Eligible Payroll Costs and total carrying value of the Eligible Tangible Assets multiplied by the ratio of the Pillar Two Income excluded under Article 7.2.1 to the total Pillar Two Income determined for the Ultimate Parent Entity before the exclusion under Article 7.2.1.

5.3.10 For purposes of Article 5.3.3, a Constituent Entity employer located in the UAE will be entitled to 100% of the Eligible Payroll Costs of an Eligible Employee where such employee undertakes more than 50% of its activities for the Constituent Entity employer during the relevant Fiscal Year within the UAE. Where an Eligible Employee undertakes 50% or less of its activities for its Constituent Entity employer during the relevant Fiscal Year within the UAE, the Constituent Entity employer will be entitled to the proportional Eligible Payroll Costs in accordance with the following formula:

Where:

(a) Eligible Payroll Costs means the total Eligible Payroll Costs of the Eligible Employee that performs activities for the MNE Group for the relevant Fiscal Year.

(b) Work Time in the UAE means the total of time that the Eligible Employee worked for the Constituent Entity employer located in the UAE during the relevant Fiscal Year.

Cabinet Decision of 2024 on the Imposition of the Supplementary Tax on Multinational Enterprises

3. Total Work Time means the total of time that the Eligible Employee worked for the Constituent Entity employer during the relevant Fiscal Year.

5.3.11 Where Article 5.3.4 applies with respect to an Eligible Tangible Asset of a Constituent Entity owner or lessee located in the UAE, such Constituent Entity will be entitled to 100% of the carrying value of an Eligible Tangible Asset where more than 50% of the time, during the relevant Fiscal Year, the asset is located within the UAE. Where an Eligible Tangible Asset is located within the UAE 50% or less of the time during the relevant Fiscal Year, the Constituent Entity owner or lessee will be entitled to the proportional carrying value of the Eligible Tangible Asset in accordance with the following formula:

Where:

1. Eligible Tangible Asset means the total carrying value of Eligible Tangible Asset of the Constituent Entity owner or lessee for the relevant Fiscal Year.
2. Time in the UAE means the total of time that the Eligible Tangible Asset was located in the UAE during the relevant Fiscal Year.
3. Total Time means the total time that the Eligible Tangible Asset was owned by the Constituent Entity owner or leased by the Constituent Entity lessee during the relevant Fiscal Year.

5.3.12 For purposes of Articles 5.3.4 and 5.3.5, the following provisions apply in the case of an operating lease:

1. if a lessee does not recognise a right-of-use asset with respect to a leased asset in its financial accounts, a fictional or hypothetical right-of-use asset cannot be created for purposes of the Pillar Two Rules;
2. the lessor will be allowed to take a portion of the carrying value of an asset into account for computing the amount of its Eligible Tangible Asset if the lessor and the asset are located in the UAE in accordance with Articles 5.3.4 and 5.3.11;
3. the amount referred to in paragraph (b) is equal to the excess, if any, of the lessor's average carrying value of the asset determined at the beginning and end of the Fiscal Year over the average amount of the lessee's right of use asset determined at the beginning and end of the Fiscal Year;
4. for purposes of paragraph (c), if the lessee is not a Constituent Entity, the lessee's right-of-use asset shall be equal to the un-discounted amount of payments remaining due under the lease, including any extensions that would be taken into account in determining a right-of-use asset under the financial accounting standard used to determine the Financial Accounting Net Income or Loss of the lessor;
5. in the case of a short-term rental asset, the lessee's right-of-use asset shall be deemed to be nil;
6. for purposes of paragraph (e), a short-term rental asset is an asset that is regularly leased several times to different lessees during the Fiscal Year and the average lease period, including any renewals and extensions, with respect to each lessee is 30 days or less.

5.3.13 For purposes of Article 5.3.5, the carrying value of an asset shall:

1. not include any increases and any subsequent incremental increase in depreciation resulting from the revaluation model;
2. take into account adjustments that derive from purchase price allocation as a result of the acquisition of an Ownership Interest in an Entity by a member of the Group; and
3. not take into account adjustments that derive from inter-company sales.

Article 5.4. Additional Current Top-up Tax

5.4.1 If the Effective Tax Rate and Top-up Tax for a prior Fiscal Year is required or permitted to be recalculated pursuant to an Effective Tax Rate Adjustment Article,

1. the Effective Tax Rate and Top-up Tax for the prior Fiscal Year shall be recalculated in accordance with the rules of Article 5.1 through Article 5.3 after taking into account the adjustments to Adjusted Covered Taxes and Pillar Two Income or Loss required by the relevant Effective Tax Rate Adjustment Article; and
2. any amount of incremental Top-up Tax resulting from such recalculation shall be treated as Additional Current Top-up Tax under Article 5.2.3 arising in the current Fiscal Year.

5.4.2 Unless Article 2.2 applies, if there is an Additional Current Top-up Tax attributable to the operation of Article 4.1.5, the Pillar Two Income of each Constituent Entity located in the UAE shall be equal to the result of the Top-up Tax allocated to such Entity under this Article divided by the Minimum Rate. The amount of Additional Current Top-up Tax allocated to each Constituent Entity for purposes of this Article shall be allocated only to Constituent Entities that record an Adjusted Covered Taxes amount that is less than zero and less than the Pillar Two Income or Loss of such Constituent Entity multiplied by the Minimum Rate. The allocation shall be made pro-rata based upon the following amount for each of those Constituent Entities:

(Pillar Two Income or Loss x Minimum Rate) – Adjusted Covered Taxes

Article 5.5. De minimis exclusion

5.5.1 At the election of the Filing Constituent Entity, and notwithstanding the requirements otherwise provided in Article 5, the Top-up Tax for the Constituent Entities located in the UAE shall be deemed to be zero for a Fiscal Year if, for such Fiscal Year:

1. the Average Pillar Two Revenue is less than EUR 10 million; and
2. the Average Pillar Two Income or Loss is a loss or is less than EUR 1 million.

The election under this Article is an Annual Election.

5.5.2 For purposes of Article 5.5.1, the Average Pillar Two Revenue (or Pillar Two Income or Loss) is the average of the Pillar Two Revenue (or Pillar Two Income or Loss) for the current and the two preceding Fiscal Years. If there were no Constituent Entities with Pillar Two Revenue or Pillar Two Losses in the first or second preceding Fiscal Year, such year or years shall be excluded from the calculation of the Average Pillar Two Revenue and the Average Pillar Two Income or Loss.

5.5.3 For purposes of Article 5.5.2:

1. the Pillar Two Revenue for a Fiscal Year is the sum of the revenue of all Constituent Entities (including Minority-Owned Constituent Entities) located in the UAE for such Fiscal Year, taking into account the adjustments calculated in accordance with Article 3;
2. the Pillar Two Income or Loss for a Fiscal Year is the Net Pillar Two Income of the UAE, if any, or the Net Pillar Two Loss of the UAE (including the Pillar Two Income or Loss of Minority-Owned Constituent Entities located in the UAE);
3. Post-filing Adjustments pursuant to an Effective Tax Rate Adjustment Article that result in a decrease of the Pillar Two Income or the Pillar Two Revenue for a previous Fiscal Year shall not be considered for purposes of Article 5.5 for the relevant Fiscal Year or Years; and
4. Post-filing Adjustments pursuant to an Effective Tax Rate Adjustment Article that result in an increase of the Pillar Two Income or the Pillar Two Revenue for a previous Fiscal Year shall be taken into account for that Fiscal Year such that a recalculation shall be made to determine the application of Article 5.5 for the relevant Fiscal Year or Years.

5.5.4 An election under Article 5.5 shall not apply to a Constituent Entity that is a Stateless Constituent Entity subject to the provisions of this Decision and the revenue and Pillar Two Income or Loss of a Stateless Constituent Entity and of an Investment Entity shall be excluded from the computations in Article 5.5.3.

Article 5.6. Minority-Owned Constituent Entities

5.6.1 The computation of the Effective Tax Rate and Top-up Tax for the UAE in accordance with Articles 3 to 7, and Article 8.2 with respect to members of a Minority-Owned Subgroup shall apply as if they were a separate MNE Group. The Adjusted Covered Taxes and Pillar Two Income or Loss of members of a Minority-Owned Subgroup are excluded from the determination of the remainder of the MNE Group's Effective Tax Rate in Article 5.1.1 and Net Pillar Two Income in Article 5.1.2.

5.6.2 The Effective Tax Rate and Top-up Tax of a Minority-Owned Constituent Entity that is not a member of a Minority-Owned Subgroup is computed on an entity basis in accordance with Articles 3 to 7, and Article 8.2. The Adjusted Covered Taxes and Pillar Two Income or Loss of the Minority-Owned Constituent Entity are excluded from the determination of the remainder of the MNE Group's Effective Tax Rate in Article 5.1.1 and Net Pillar Two Income in Article 5.1.2.

Article 6
Corporate Restructurings and Holding Structures

Article 6.1. Application of Consolidated Revenue Threshold to Group Mergers and Demergers

6.1.1 For the purposes of Article 1.1:

1. If two or more Groups merge to form a single Group in any of the four Fiscal Years prior to the tested Fiscal Year, then the consolidated revenue threshold of the MNE Group for any Fiscal Year prior to the merger is deemed to be met for that year if the sum of the revenue included in each of their Consolidated Financial Statements for that year is equal to or greater than EUR 750 million.
2. Where an Entity that is not a member of any Group (acquirer) acquires or merges with an Entity or Group (target) in the tested Fiscal Year and the target or acquirer does not have Consolidated Financial Statements in any of the four Fiscal Years prior to the tested Fiscal Year because it was not a member of any Group in that year, the consolidated revenue threshold of the MNE Group is deemed to be met for that year if the sum of the revenue included in each of their Financial Statements or Consolidated Financial Statements for that year is equal to or greater than EUR 750 million.
3. Where a single MNE Group within the scope of this Decision demerges into two or more Groups (each a demerged Group), the consolidated revenue threshold is deemed to be met by a demerged Group:
   1. with respect to the first tested Fiscal Year ending after the demerger, if the demerged Group has annual revenues of EUR 750 million or more in that year;
   2. with respect to the second to fourth tested Fiscal Years ending after the demerger, if the demerged Group has annual revenues of EUR 750 million or more in at least two of the Fiscal Years following the year of the demerger.

6.1.2 For the purposes of Article 6.1.1 a merger is any arrangement where:

1. all or substantially all of the Group Entities of two or more separate Groups are brought under common control such that they constitute Group Entities of a combined Group; or
2. an Entity that is not a member of any Group is brought under common control with another Entity or Group such that they constitute Group Entities of a combined Group.

6.1.3 For the purposes of Article 6.1.1 a demerger is any arrangement where the Group Entities of a single Group are separated into two or more Groups that are no longer consolidated by the same Ultimate Parent Entity.

Article 6.2. Constituent Entities joining and leaving an MNE Group

6.2.1 Except to the extent provided in Article 6.2.2, the following provisions apply where an Entity (the target) becomes or ceases to be a Constituent Entity of an MNE Group as a result of a transfer of direct or indirect Ownership Interests in such Entity during the Fiscal Year (the acquisition year):

1. where the target joins or leaves a Group or the target becomes the Ultimate Parent Entity of a new Group, the target will be treated as a member of the Group for the purposes of the provisions of this Decision if any portion of its assets, liabilities, income, expenses or cash flows are included on a line-by-line basis in the Consolidated Financial Statements of the Ultimate Parent Entity in the acquisition year;
2. in the acquisition year, an MNE Group shall take into account only the Financial Accounting Net Income or Loss and Adjusted Covered Taxes of the target that are taken into account in the Consolidated Financial Statements of the Ultimate Parent Entity for purposes of applying this Decision;
3. in the acquisition year and each succeeding year, the target shall determine its Pillar Two Income or Loss and Adjusted Covered Taxes using its historical carrying value of the assets and liabilities;
4. the computation of the target's Eligible Payroll Costs under Article 5.3.3 shall take into account only those costs reflected in the financial statements used to determine the Pillar Two Income or Loss;
5. the computation of carrying value of the target's Eligible Tangible Assets for purposes of Article 5.3.4 shall be adjusted proportionally to correspond with the length of the relevant Fiscal Year that the target was a member of the MNE Group;
6. with the exception of the Pillar Two Loss Deferred Tax Asset, the deferred tax assets and deferred tax liabilities of a Constituent Entity that are transferred between MNE Groups shall be taken into account under this Decision by the acquiring MNE Group in the same manner and to the same extent as if the acquiring MNE Group controlled the Constituent Entity when such assets and liabilities arose; and
7. deferred tax liabilities of a target that have previously been included in its Total Deferred Tax Adjustment Amount shall be treated as reversed for purposes of applying Article 4.4.4 by the disposing MNE Group and treated as arising in the acquisition year for purposes of applying Article 4.4.4 by the acquiring MNE Group, except that in such cases any subsequent reduction to Covered Taxes under Article 4.4.4 shall have effect in the year in which the amount is recaptured.

6.2.2 For purposes of the implementation of this Decision, the acquisition or disposal of a Controlling Interest in a Constituent Entity will be treated as an acquisition or disposal of the assets and liabilities if the Jurisdiction in which the target Constituent Entity is located, or in the case of a Tax Transparent Entity, the Jurisdiction in which the assets are located, treats the acquisition or disposal of that Controlling Interest in the same or similar manner as an acquisition or disposition of the assets and liabilities and imposes a Covered Tax on the seller based on the difference between their tax basis and the consideration paid in exchange for the Controlling Interest or the fair value of the assets and liabilities.

Article 6.3. Transfer of Assets and Liabilities

6.3.1 Subject to Article 3.2.3, in the case of a disposition or acquisition of assets and liabilities, a disposing Constituent Entity will include the gain or loss on disposition in the computation of its Pillar Two Income or Loss and an acquiring Constituent Entity will determine its Pillar Two Income or Loss using the acquiring Constituent Entity's carrying value of the acquired assets and liabilities determined under the accounting standard used by the financial statements used for the purposes of determining the Pillar Two Income or Loss.

6.3.2 If the disposition or acquisition of assets and liabilities is part of a Pillar Two Reorganisation Article 6.3.1 shall not apply and:

1. a disposing Constituent Entity will exclude any gain or loss on the disposition from the computation of its Pillar Two Income or Loss; and
2. an acquiring Constituent Entity will determine its Pillar Two Income or Loss after the acquisition using the disposing Entity's carrying values of the acquired assets and liabilities upon disposition.

6.3.3 If a disposition or acquisition of assets and liabilities is part of a Pillar Two Reorganisation in which a disposing Constituent Entity recognises Non-qualifying Gain or Loss, Articles 6.3.1 and 6.3.2 shall not apply and:

1. the disposing Constituent Entity will include gain or loss on the disposition in its Pillar Two Income or Loss computation to the extent of the Non-qualifying Gain or Loss; and
2. an acquiring Constituent Entity will determine its Pillar Two Income or Loss after the acquisition using the disposing Entity's carrying value of the acquired assets and liabilities upon disposition adjusted consistent with local tax rules to account for the Non-qualifying Gain or Loss.

6.3.4 At the election of the Filing Constituent Entity, a Constituent Entity of an MNE Group that is required or permitted to adjust the basis of its assets and the amount of its liabilities to fair value for tax purposes in the UAE in which it is located, shall:

1. Include in the computation of its Pillar Two Income or Loss an amount of gain or loss in respect of each of its assets and liabilities that is equal to:
   1. the difference between the carrying value for financial accounting purposes of the asset or liability immediately before and the fair value of the asset or liability immediately after the date of the event that triggered the tax adjustment (the triggering event);
   2. decreased (or increased) by the Non-Qualifying Gain (or Loss), if any, arising in connection with the triggering event;
2. use the fair value for financial accounting purposes of the asset or liability immediately after the triggering event to determine Pillar Two Income or Loss in Fiscal Years ending after the triggering event; and
3. include the net total of the amounts determined in 6.3.4(a) in the Constituent Entity's Pillar Two Income or Loss in one of the following ways:
   1. the net total of the amounts is included in the Fiscal Year in which the triggering event occurs; or
   2. an amount equal to the net total of the amounts divided by five is included in the Fiscal Year in which the triggering event occurs and in each of the immediate four subsequent Fiscal Years, unless the Constituent Entity leaves the MNE Group in a Fiscal Year within this period, in which case the remaining amount will be wholly included in that Fiscal Year.

Article 6.4. Joint Ventures

6.4.1 Articles 3 to 7 and Article 8.2 shall apply for the purposes of computing any Top-up Tax of the Joint Venture and its JV Subsidiaries as if they were Constituent Entities of a separate MNE Group and as if the Joint Venture was the Ultimate Parent Entity of that Group.

Article 6.5. Multi-Parented MNE Groups

6.5.1 The following provisions apply to Multi-Parented MNE Groups:

1. the Entities and Constituent Entities of each Group are treated as members of a single MNE Group for purposes of this Decision (the Multi-Parented MNE Group);
2. an Entity (other than an Excluded Entity) shall be treated as a Constituent Entity if it is consolidated on a line-by-line basis by the Multi-Parented MNE Group or its Controlling Interests are held by Entities in the Multi-Parented MNE Group;
3. the Consolidated Financial Statements of the Multi-Parented MNE Group shall be the Consolidated Financial Statements referred to in the definition of Stapled Structure or Dual-listed arrangement (as relevant) prepared under an Acceptable Financial Accounting Standard, which is deemed to be the accounting standard of the Ultimate Parent Entity; and
4. the Ultimate Parent Entities of the separate Groups that comprise the Multi-Parented MNE Group shall be the Ultimate Parent Entities of the Multi-Parented MNE Group (when applying the provisions of this Decision in respect of a Multi-Parented MNE Group, references to an Ultimate Parent Entity shall apply, as required, as if they were references to multiple Ultimate Parent Entities).

Article 7
Tax Neutrality and Distribution Regimes

Article 7.1. Ultimate Parent Entity that is a Flow-through Entity

7.1.1 The Pillar Two Income for a Fiscal Year of a Flow-through Entity that is the Ultimate Parent Entity of an MNE Group shall be reduced by the amount of Pillar Two Income attributable to each Ownership Interest in that Ultimate Parent Entity if:

1. the holder of the Ownership Interest is subject to tax on such income for a taxable period that ends within 12 months of the end of the Ultimate Parent Entity's Fiscal Year and:
   1. the holder of the Ownership Interest is subject to tax on the full amount of such income at a nominal rate that equals or exceeds the Minimum Rate; or
   2. it can be reasonably expected that the aggregate amount of Covered Taxes paid by the Ultimate Parent Entity and other Entities that are part of the Tax Transparent Structure and Taxes of the holder of the Ownership Interest on such income equals or exceeds the amount that results from multiplying the full amount of such income by the Minimum Rate; or
2. the direct holder is a natural person that:
   1. is a tax resident in the UAE; and
   2. holds Ownership Interests that, in the aggregate, are a right to 5% or less of the profits and assets of the Ultimate Parent Entity; or
3. the holder is a Governmental Entity, an International Organisation, a Non-profit Organisation, or a Pension Fund that
   1. is resident in the UAE; and
   2. holds Ownership Interests that, in the aggregate, are a right to 5% or less of the profits and assets of the Ultimate Parent Entity.

7.1.2 In computing its Pillar Two Loss for a Fiscal Year, a Flow-through Entity that is the Ultimate Parent Entity of an MNE Group shall reduce its Pillar Two Loss for such Fiscal Year by the amount of Pillar Two Loss attributable to each Ownership Interest, except to the extent that the holders of Ownership Interests are not allowed to use the loss in computing their separate taxable income.

7.1.3 A Flow-through Entity that reduces its Pillar Two Income pursuant to Article 7.1.1 shall reduce its Covered Taxes proportionally.

7.1.4 Articles 7.1.1 through 7.1.3 shall apply to a Permanent Establishment:

1. through which a Flow-Through Entity that is the Ultimate Parent Entity of an MNE Group wholly or partly carries out its business; or
2. through which the business of a Tax Transparent Entity is wholly or partly carried out if the Ultimate Parent Entity's Ownership Interest in that Tax Transparent Entity is held directly or through a Tax Transparent Structure.

Article 7.2. Ultimate Parent Entity subject to Deductible Dividend Regime

7.2.1 To the extent that a Deductible Dividend Regime is allowed under the Federal Decree-Law No. 47 of 2022, for purposes of computing its Pillar Two Income or Loss for a Fiscal year, an Ultimate Parent Entity that is subject to a Deductible Dividend Regime shall reduce (but not below zero) its Pillar Two Income for such Fiscal Year by the amount that is distributed as a Deductible Dividend within 12 months of the end of the Fiscal Year if:

1. the dividend is subject to tax in the hands of the dividend recipient for a taxable period that ends within 12 months of the end of the Ultimate Parent Entity's Fiscal Year, and:
   1. the dividend recipient is subject to tax on such dividend at a nominal rate that equals or exceeds the Minimum Rate;
   2. it can be reasonably expected that the aggregate amount of Covered Taxes paid by the Ultimate Parent Entity and Taxes paid by the dividend recipient on the dividend income equals or exceeds the amount that results from multiplying the full amount of such income by the Minimum Rate; or
   3. the dividend recipient is a natural person and the dividend is a patronage dividend from a supply Cooperative; or
2. the dividend recipient is a natural person that:
   1. is a tax resident in the UAE; and
   2. holds Ownership Interests that, in the aggregate, are a right to 5% or less of the profits and assets of the Ultimate Parent Entity.
3. the dividend recipient is resident in the UPE Jurisdiction and is:
   1. a Governmental Entity,
   2. an International Organisation,
   3. a Non-profit Organisation or
   4. a Pension Fund that is not a Pension Services Entity.

7.2.2 An Ultimate Parent Entity that reduces its Pillar Two Income pursuant to Article 7.2.1 shall reduce its Covered Taxes (other than the Taxes for which the dividend deduction was allowed, including taxes that are based on corporate equity or retained earnings) proportionally and shall reduce its Pillar Two Income by the same amount.

7.2.3 If the Ultimate Parent Entity holds an Ownership Interest in another Constituent Entity subject to the Deductible Dividend Regime (directly or through a chain of such Constituent Entities), Articles 7.2.1 and 7.2.2 shall apply to each other Constituent Entity in the UPE Jurisdiction that is subject to the Deductible Dividend Regime to the extent that its Pillar Two Income is further distributed by the Ultimate Parent Entity to recipients that meet the requirements of Article 7.2.1.

7.2.4 Patronage dividends received by a person who is not a natural person from a supply Cooperative are subject to tax to the extent they reduce an expense or cost that is deductible in the computation of the recipient's taxable income.

Article 7.3. Investment Entity Tax Transparency Election

7.3.1 A Filing Constituent Entity may elect to treat a Constituent Entity that is an Investment Entity as a Tax Transparent Entity if the Constituent Entity-owner located in the UAE is subject to tax under a mark-to-market or similar regime based on the annual changes in the fair value of its Ownership Interest in the Entity and the tax rate applicable to the Constituent Entity-owner with respect to such income equals or exceeds the Minimum Rate. For this purpose, a Constituent Entity that indirectly owns an Ownership Interest in an Investment Entity through a direct Ownership Interest in another Investment Entity is considered to be subject to tax under a mark-to-market or similar regime with respect to the indirect Ownership Interest in the first-mentioned Entity if it is subject to a mark-to-market or similar regime with respect to the direct Ownership Interest in the second-mentioned Entity.

7.3.2 The election under this Article is a Five-Year Election. If the election is revoked, gain or loss from the disposition of an asset or liability held by the Investment Entity shall be determined based on the fair value of the assets or liabilities on the first day of the revocation year.

7.3.3 For purpose of this provision, a Constituent Entity-owner that is a policyholder-owned, regulated mutual insurance company and that owns an Ownership Interest in an Investment Entity is considered to be subject to tax under a mark-to-market or similar regime based on the annual changes in the fair value of its Ownership Interest in the Investment Entity at a rate that equals or exceeds the Minimum Rate.

Article 7.4. Taxable Distribution Method Election

7.4.1 At the election of the Filing Constituent Entity, a Constituent Entity-owner located in the UAE that is not an Investment Entity may apply the Taxable Distribution Method with respect to its Ownership Interest in a Constituent Entity that is an Investment Entity if the Constituent Entity-owner can be reasonably expected to be subject to tax on distributions from the Investment Entity at a tax rate that equals or exceeds the Minimum Rate.

7.4.2 Under the Taxable Distribution Method:

1. distributions and deemed distributions of the Investment Entity's Pillar Two Income are included in the Pillar Two Income of the Constituent Entity-owner located in the UAE (other than an Investment Entity) that received the distribution;
2. the Local Creditable Tax Gross-up is included in the Pillar Two Income and Adjusted Covered Taxes of the Constituent Entity-owner located in the UAE (other than an Investment Entity) that received the distribution; and
3. the Constituent Entity-owner's proportionate share of the Investment Entity's Undistributed Net Pillar Two Income for the Tested Year is treated as Pillar Two Income of the Investment Entity for the Reporting Fiscal Year.

7.4.3 The Undistributed Net Pillar Two Income for a Fiscal Year is the amount of the Investment Entity's Pillar Two Income, if any, for the Tested Year reduced (but not below zero) by:

1. any Covered Taxes of the Investment Entity;
2. distributions and deemed distributions to shareholders other than Constituent Entities that are Investment Entities in the Testing Period;
3. Pillar Two Losses arising in the Testing Period; and
4. Investment Loss Carry-forwards.

7.4.4 Undistributed Net Pillar Two Income for the Tested Year cannot be reduced by distributions or deemed distributions to the extent that such distributions were treated as a reduction to Undistributed Net Pillar Two Income of a previous Tested Year. For purposes of computing Undistributed Net Pillar Two Income, a Pillar Two Loss is reduced to the extent it reduced Undistributed Net Pillar Two Income at the end of a previous Fiscal Year. If a Pillar Two Loss for a Fiscal Year is not reduced to zero before the end of the last Tested Period that includes such Fiscal Year, the remainder becomes an Investment Loss Carry-forward and is reduced in the same manner as a Pillar Two Loss in subsequent Fiscal Years.

7.4.5 For purposes of Article 7.4,

1. the Tested Year is the third year preceding the Reporting Fiscal Year;
2. the Testing Period is the period beginning with the first day of the Tested Year and ending with the last day of the Reporting Fiscal Year that the Ownership Interest was held by a Group Entity;
3. a deemed distribution arises when a direct or indirect Ownership Interest in the Investment Entity is transferred to a non-Group Entity and is equal to the proportionate share of the Undistributed Net Pillar Two Income attributable to such Ownership Interest on the date of such transfer (determined without regard to the deemed distribution); and
4. the Local Creditable Tax Gross-up is the amount of Covered Taxes incurred by the Investment Entity that is allowed as a credit against the Constituent Entity-owner's tax liability arising in connection with a distribution from the Investment Entity.

7.4.6 The election under this Article is a Five-Year Election. If the election is revoked, Constituent Entity-owner's proportionate share of the Investment Entity's Undistributed Net Pillar Two Income for the Tested Year at the end of the Fiscal Year preceding the revocation year is treated as Pillar Two Income of the Investment Entity for the revocation year.

7.4.7 The Investment Entity is not subject to this Decision on the Undistributed Net Pillar Two Income treated as Pillar Two Income.

Article 7.5. Equity Investment Inclusion Election and Qualified Flow-through Tax Benefits

7.5.1 A Filing Constituent Entity may make an Equity Investment Inclusion Election to include in the Pillar Two Income or Loss of a Constituent Entity, the accounting gain, profit, or loss with respect to any:

1. fair value gains and losses and impairments on that Ownership Interest where the owner:
   1. is taxable on a mark-to-market basis or on the impairment, provided that the tax consequences of the mark-to-market movements or impairments on the Ownership Interests are reflected in the income tax expense; or
   2. is taxable on a realization basis and the income tax expense includes deferred tax expense on the mark-to-market movements or impairments on the Ownership Interests;
2. the profit and loss attributable to that Ownership Interest where the interest is in the Tax Transparent Entity and the owner accounts for the interest using the equity method; and
3. the dispositions of that Ownership Interest which give rise to gains or losses that are included in the owner's domestic taxable income, excluding any gain fully offset, and the proportionate share of any gain partially offset, by any deduction or other similar relief particular to the type of gain.

7.5.2 The accounting gain, profit, or loss included in the Pillar Two Income or Loss pursuant to Article 7.5.1 shall be adjusted in accordance with Article 3.2 except for Article 3.2.1(c).

7.5.3 Notwithstanding Article 4.1.3 (a) and 4.4.1(a), where an Equity Investment Inclusion Election is made, all current and deferred tax expense or benefits that are derived from the accounting gain, profit, or loss included in the Pillar Two Income or Loss in accordance with Article 7.5.1 shall be included in the computation of Adjusted Covered Taxes subject to the relevant provisions of this Decision.

7.5.4 An owner subject to the Equity Investment Inclusion Election shall not apply Articles 7.5.1, 7.5.2 and 7.5.3 to a Qualified Flow-through Tax Benefit that flows through a Qualified Ownership Interest. Instead, the following provisions shall apply:

1. the amount of a Qualified Flow-through Tax Benefit will be allowed as a positive amount in the Adjusted Covered Taxes of the direct owner of a Qualified Ownership Interest or an indirect owner of such an interest through a chain of Tax Transparent Entities that are not Constituent Entities of the MNE Group to the extent the Qualified Flow-through Tax Benefit was treated for financial accounting purposes as reducing a tax expense;
2. the amount of a Qualified Flow-through Tax Benefit is equal to the amount of the tax credit or tax-deductible loss that have flowed through to the owner through a Qualified Ownership Interest to the extent that it reduces the owner's investment in the Qualified Ownership Interest by:
   1. the amount of such tax credit or tax loss:
   2. the amount of any distributions (including a return of capital) to the owner; or
   3. the amount of proceeds from a sale of all or part of the Qualified Ownership Interest.
3. for the purposes of paragraph (b), a tax deductible loss is equal to the amount of the tax loss multiplied by the statutory rate applicable to the owner;
4. the provisions of this Article 7.5.4 shall not cause the owner's investment to be less than zero and accordingly no amount shall be treated as reducing the investment to the extent it would reduce the investment below zero;
5. where the owner's investment has been reduced to zero due to the obtention of tax credits or tax deductible losses through a Qualified Ownership Interest, or after receiving distributions (including a return of capital) or proceeds from the sale of all or part of the Qualified Ownership Interest:
   1. any subsequent amount of any of tax credits or tax deductible losses obtained by the owner through a Qualified Ownership Interest shall be treated as a negative amount in the owner's Adjusted Covered Taxes; and
   2. any subsequent amount of any distributions (including a return of capital), proceeds from the sale of all or part of the Qualified Ownership Interest, or Qualified Refundable Tax Credits obtained through the Qualified Ownership Interest shall be treated as a negative amount in the owner's Adjusted Covered Taxes to the extent of the amount of any Qualified Flow-through Tax Benefit that flowed through the Qualified Ownership Interest and that were treated as a positive amount in the owner's Adjusted Covered Taxes.

7.5.5 An owner subject to Article 7.5.4 that uses the proportional amortization method to account for its Qualified Ownership Interest for financial accounting purposes shall apply such method for determining the amount of investment that is recovered each year. Owners that do not use the proportional amortization method may irrevocably elect to apply this methodology provided that the election is made in the first Fiscal Year in which they acquire the Qualified Ownership Interest or are subject to Pillar Two Rules.

7.5.6 Where the proportional amortization method is applied in accordance with Article 7.5.5, any tax credit or tax loss that flows through or any distributions (including a return of capital) or proceeds from sales shall be treated as a reduction to the investment in proportion to the expected tax benefits ratio.

7.5.7 The expected tax benefits ratio is the ratio of the tax credits and tax losses that flowed through or are received in the Fiscal Year to the total of such items that are expected to flow through or are received in respect of the Qualified Ownership Interest over the term of the investment.

7.5.8 The amount of tax credits or tax losses that flow through or distributions (including a return of capital) or proceeds from sales received, in respect of the Qualified Ownership Interest, in excess of the reduction to the investment shall not be included as a positive amount in the owner's Adjusted Covered Taxes.

Article 8
Filing of Top-Up Tax Return and Safe Harbours

Article 8.1 Top-up Tax Return Filing

8.1.1 Each Constituent Entity, Joint Venture and JV Subsidiary located in the UAE shall file a Top-up Tax Return with the Federal Tax Authority. The return may be filed by either the Constituent Entity, Joint Venture or JV Subsidiary itself or by a Domestic Designated Filing Entity on its behalf.

8.1.2 The Top-up Tax Return shall be filed in the manner specified by the Federal Tax Authority no later than 15 months after the last day of the Reporting Fiscal Year or 18 months after the last day of the Reporting Fiscal Year that is the first Transition Year of any Constituent Entity of the MNE Group.

8.1.3 The Top-up Tax Return developed by the Federal Tax Authority shall require the equivalent information and reporting requirements set out in the Pillar Two Information Return. The Constituent Entities, Joint Ventures, JV Subsidiaries or Domestic Designated Filing Entity may choose to apply the simplified Jurisdictional reporting framework provided in the Pillar Two Information Return.

Article 8.2. Safe Harbours

8.2.1 Transitional CBCR Safe Harbour

8.2.1.1 During the Transition Period, at the election of the Filing Constituent Entity, and notwithstanding Article 5, the Jurisdictional Top-up Tax of the UAE shall be deemed to be zero for a Fiscal Year if:

1. the MNE Group reports Total Revenue of less than EUR 10 million and Profit (Loss) before Income Tax of less than EUR 1 million in the UAE on its Qualified CbC Report for the Fiscal Year;
2. the MNE Group has a Simplified Effective Tax Rate that is equal to or greater than the Transition Rate in the UAE for the Fiscal Year; or
3. the MNE Group's Profit (Loss) before Income Tax in the UAE is equal to or less than the Substance-based Income Exclusion amount as calculated under Articles 5.3 and 9.2, for entities reported in the UAE in the Country-by-Country Report.

8.2.1.2 Article 8.2.1.1 shall apply to the Joint Venture and JV Subsidiaries as if they were Constituent Entities of a separate MNE Group, except that the Pillar Two Income or Loss and Total Revenue would be the ones reported in their Qualified Financial Statements.

8.2.1.3 The following adjustments shall be made for purposes of Article 8.2.1.1:

1. where the Ultimate Parent Entity is a Flow-through Entity or subject to a Deductible Dividend Regime, the Profit (Loss) before Income Tax (and any associated taxes) of that Entity shall be reduced to the extent where such amount is attributable to or distributed as a result of an Ownership Interest held by a Qualified Person;
2. a Net Unrealised Fair Value Loss shall be excluded from Profit (Loss) Before Income Tax if that loss exceeds EUR 50 million in the UAE;
3. the Profit (Loss) before Income Tax, Total Revenue and Taxes of an Investment Entity shall be reflected only in the Jurisdictions of its direct Constituent Entity-owners in proportion to their Ownership Interest;
4. in the case of a Hybrid Arbitrage Arrangement entered into after 15 December 2022:
   1. excluding any expense or loss from the Profit (Loss) before Income Tax of the UAE arising from a Deduction Non-inclusion Arrangement or Duplicate Loss Arrangement; and
   2. excluding any income tax expense from the income tax expense of the Entities reported in the UAE arising from a Duplicate Tax Recognition Arrangement.
5. the amount of uncertain tax positions shall be removed from the income tax expense; and
6. where a loss arising in a Permanent Establishment is reflected in the Profit (Loss) before Income Tax of the Jurisdiction where the Permanent Establishment is reported and such loss is also reflected in the Profit (Loss) before Income Tax of the Jurisdiction of the head office or Main Entity, the amount of the loss shall be removed from the Profit (Loss) before Income Tax of the Jurisdiction of the head office or Main Entity;
7. taxes that are not Covered Taxes shall be removed from the income tax expense;
8. the amount of the income tax expense from taxes imposed on a Permanent Establishment by the Jurisdiction of the Permanent Establishment shall be allocated exclusively to that Jurisdiction;

8.2.1.4 Article 8.2.1.1 shall not apply where:

1. the UAE is the UPE Jurisdiction and the Ultimate Parent Entity is a Flow-through Entity unless all the Ownership Interests in the Ultimate Parent Entity are held by Qualified Persons;
2. the Top-up Tax that may arise from Stateless Reverse Hybrid Entities subject to the provisions of this Decision;
3. Multi-parented MNE Groups where a single Qualified CbC Report does not include the information of the combined groups;
4. the Top-up Tax computation of Constituent Entities subject to the provisions of this Decision have not benefited from Article 8.2.1.1 or an equivalent foreign provision in a previous Fiscal Year in which the MNE Group is subject to the Pillar Two Rules, unless the MNE Group did not have any Constituent Entities in the UAE in the previous year; and
5. the MNE Group uses data from different sources of Qualified Financial Statements for that same Entity or Permanent Establishment in the calculations required in Article 8.2.1.

8.2.1.5 Notwithstanding Article 2.3, Article 8.2.1.1 applies to the Top-up Tax of the Constituent Entities located in the UAE irrespective of whether an Investment Entity is reported in the UAE in the Country-by-Country Report.

8.2.1.6 Article 8.2.1.1(a) does not apply where the Ultimate Parent Entity controls Entities located in the UAE that are not consolidated on a line-by-line basis because they are held for sale and the sum of the revenue of such Entities when combined with the Total Revenue in the UAE equals or exceeds EUR 10 million.

8.2.1.7 For purposes of Article 8.2.1.1(c), the Substance-based Income Exclusion shall not take into account the payroll and tangible assets of:

1. Entities not reported in the UAE in the Country-by-Country Report;
2. Excluded Entities; and
3. Constituent Entities that are located in different Jurisdictions in accordance with this Decision and the Country-by-Country Report.

8.2.1.8 Where the MNE Group is not required to file a Qualified CBC Report, Article 8.2.1.1 may apply provided that the MNE Group includes in its Top-up Tax Return for the Fiscal Year the data from Qualified Financial Statements that would have been reported as Total Revenues and Profit (Loss) Before Income Tax in a Qualified CBC Report and such data is used for purposes of the calculations of pursuant to Article 8.2.1.1.

8.2.1.9 Amounts from intra-group transactions treated as income in the Qualified Financial Statements of the recipient and as an expense in the Qualified Financial Statements of the payer shall be included in Total Revenues and Profit (Loss) Before Tax for the purpose of the computations in Article 8.2.1.1 without further adjustments, irrespective of the treatment of these transactions for tax purposes in the Jurisdiction of the recipient or the payer or in the Country-by-Country Report.

8.2.1.10 Where the financial statements used to prepare the Country-by-Country Report contains assets that were valued based on purchase price allocation due to the acquisition of a Controlling Interest as a result of a business combination, the Country-by-Country Report will be considered to be prepared and filed using Qualified Financial Statements provided that:

1. the MNE Group has not submitted a Country-by-Country Report for a Fiscal Year beginning after 31 December 2022 that was based on the Constituent Entity's reporting package or separate financial statements without the purchase price allocation adjustments, except where the Constituent Entity was required by law or regulation to change its reporting package or separate financial statements to include purchase price allocation adjustments; and
2. any reduction to the Constituent Entity's income attributable to an impairment of goodwill related to transactions entered into after 30 November 2021 must be added back to the Profit (Loss) before Income Tax:
   1. for purposes of applying the test in Article 8.2.1.1(c); and
   2. for purposes of applying the test in Article 8.2.1.1(b), but only if the financial accounts do not also have a reversal of deferred tax liability or recognition or increase of a deferred tax asset in respect of the impairment of goodwill.

8.2.1.11 For purposes of the provisions in Article 8.2.1:

1. Deduction Non-inclusion Arrangement means an arrangement under which one Constituent Entity directly or indirectly provides credit or otherwise makes an investment in another Constituent Entity that results in an expense or loss in the financial statements of a Constituent Entity to the extent that:
   1. there is no commensurate increase in the revenue or gain in the financial statements of the Constituent Entity counterparty; or
   2. the Constituent Entity counterparty is not reasonably expected over the life of the arrangement to have a commensurate increase in its taxable income.

   An arrangement will not be a Deduction Non-inclusion Arrangement to the extent that the relevant expense or loss is solely with respect to Additional Tier One Capital.

2. Duplicate Loss Arrangement means an arrangement that results in an expense or loss being included in the financial statement of a Constituent Entity to the extent that:
   1. the expense or loss is also being included as an expense or loss in the financial statement of another Constituent Entity; or
   2. the arrangement also gives rise to a duplicate amount that is deductible for purposes of determining the taxable income of another Constituent Entity in another Jurisdiction.
3. Duplicate Tax Recognition Arrangement means an arrangement that results in more than one Constituent Entity including part or all of the same income tax expense in its:
   1. Adjusted Covered Taxes; or
   2. Simplified Effective Tax Rate for the purposes of applying the Transitional CbCR Safe Harbour;

   unless such arrangement also results in the income subject to the tax being included in the relevant financial statements of each such Constituent Entity. An arrangement will not be a Duplicate Tax Recognition Arrangement if it arises solely because the Simplified Effective Tax Rate of a Constituent Entity does not require adjustments for income tax expenses which would be allocated to another Constituent Entity in determining the first Constituent Entity's Adjusted Covered Taxes.

4. Hybrid Arbitrage Arrangement means a:
   1. Deduction Non-inclusion Arrangement
   2. Duplicate Loss Arrangement; or
   3. Duplicate Tax Recognition Arrangement.
5. Net Unrealised Fair Value Loss means the sum of all losses, as reduced by any gains, which arise from changes in the fair value of Ownership Interests (except for Portfolio Shareholdings).
6. Profit (Loss) Before Income Tax means an MNE Group's Profit (Loss) Before Income Tax in a Jurisdiction as reported on its Qualified CbC Report.
7. Qualified Financial Statements means:
   1. the accounts used to prepare the Consolidated Financial Statements of the Ultimate Parent Entity;
   2. separate financial statements of each Constituent Entity provided they are prepared in accordance with either an Acceptable Financial Accounting Standard or an Authorised Financial Accounting Standard if the information contained in such statements is maintained based on that accounting standard and it is reliable; or
   3. in the case of a Constituent Entity that is not included in the Consolidated Financial Statements of the Ultimate Parent Entity on a line-by-line basis solely due to size or materiality grounds, the financial accounts of that Constituent Entity that are used for preparation of the MNE Group's Country-by-Country Report.
8. Qualified CbC Report means a Country-by-Country Report prepared and filed using Qualified Financial Statements irrespective whether different Qualified Financial Statements are used for different Jurisdictions tested under Article 8.2.1.1.
9. Qualified Person means
   1. in respect of an Ultimate Parent Entity that is a Flow-through Entity, a holder described in Article 7.1.1 (a) to (c); and
   2. in respect of an Ultimate Parent Entity that is subject to Deductible Dividend Regime, a holder described in Article 7.2.1 (a) to (c).
10. Total Revenue means an MNE Group's Total Revenues in a Jurisdiction as reported on its Qualified CbC Report.
11. Simplified Covered Taxes means a Jurisdiction's income tax expense as reported in the MNE Group's Qualified Financial Statements after any adjustment required by Article 8.2.1.
12. Simplified Effective Tax Rate means the effective tax rate calculated by dividing the Jurisdiction's Simplified Covered Taxes by its Profit (Loss) Before Income Tax as reported on the MNE Group's Qualified CbC Report.
13. Transition Period means the period that covers all of the Fiscal Years that begin before 1 January 2027 and end before 1 July 2028.
14. Transition Rate means:
    1. 16% for Fiscal Years beginning in 2025;
    2. 17% for Fiscal Years beginning in 2026.

8.2.2 Simplified Calculations Safe Harbour

8.2.2.1 At the election of the Filing Constituent Entity, and notwithstanding Article 5, the Top-up Tax (other than Additional Current Top-up Tax) for the UAE shall be deemed to be zero for a Fiscal Year provided that the MNE Group meets one of the following tests with respect to its operations in the UAE:

1. Routine Profits Test;
2. De Minimis Test; or
3. Effective Tax Rate Test.

8.2.2.2 A Constituent Entity may use a Simplified Income Calculation, Simplified Revenue Calculation, or a Simplified Tax Calculation for the purposes of determining whether any of the tests in Article 8.2.2.1 are met in the Fiscal Year.

The Simplified Income Calculation, Simplified Revenue Calculation and Simplified Tax Calculation of Constituent Entities shall be combined with the Pillar Two computations of Constituent Entities that do not meet the definition of Non-material Constituent Entities in Article 8.2.2.7 to determine whether the UAE meets any of the tests in Article 8.2.2.3.

8.2.2.3 An MNE Groups meets:

1. the Routine Profits Test if its Pillar Two Income in the UAE as determined under the Simplified Income Calculation is equal or less than the amount that results from computing the Substance-based Income Exclusion for the UAE in accordance with Article 5.3;
2. the De Minimis Test if the Average Pillar Two Revenue in the UAE as determined under the Simplified Revenue Calculation is less than EUR 10 million, and the Average Pillar Two Income in the UAE is less than EUR 1 million or has a loss as determined under the Simplified Income Calculation in accordance with Article 5.5; or
3. the Effective Tax Rate Test if the Effective Tax Rate of the UAE as determined under the Simplified Income Calculation and the Simplified Tax Calculation, is at least 15% as determined in accordance with Article 5.1.1.

8.2.2.4 The Simplified Revenue Calculation includes the following calculations:

1. a Filing Constituent Entity may make an Annual Election so the Pillar Two Revenue of a Non-Material Constituent Entity is equal to the Total Revenue of the Non-Material Constituent Entity as determined in accordance with the Relevant CBC Regulations.

8.2.2.5 The Simplified Income Calculation includes the following calculations:

1. a Filing Constituent Entity may make an Annual Election so the Pillar Two Income or Loss of a Non-Material Constituent Entity is equal to the Total Revenue of the Non-Material Constituent Entity as determined in accordance with the Relevant CBC Regulations.

8.2.2.6 The Simplified Tax Calculation includes the following calculations:

1. a Filing Constituent Entity may make an Annual Election so the Adjusted Covered Taxes of a Non-Material Constituent Entity is equal to Income Tax Accrued (current year) of the Non-Material Constituent Entity as determined in accordance with the Relevant CBC Regulations.

8.2.2.7 For purposes of the provisions in Article 8.2.2:

1. Non-material Constituent Entity means an Entity, including its Permanent Establishments, that is not consolidated on a line-by-line basis in the Consolidated Financial Statements of the Ultimate Parent Entity solely on size or materiality grounds and is considered a Constituent Entity in accordance with Article 1.2.2, provided that:
   1. the Consolidated Financial Statements are those that are described in paragraphs (a) or (c) of the definition provided under Article 18.1;
   2. the Consolidated Financial Statements are externally audited; and
   3. in the case of an Entity with a Total Revenue that exceeds EUR 50 million, its financial accounts that are used to complete the CbC Report are prepared in accordance with an Acceptable Financial Accounting Standard or an Authorised Financial Accounting Standard.
2. Relevant CbC Regulations means the Country-by-Country Reporting regulations of the UPE Jurisdiction or of the surrogate parent entity Jurisdiction if a Country-by-Country Report is not filed in the UPE Jurisdiction. If the UPE Jurisdiction does not have Country-by-Country Report legislation and an MNE Group is not required to file a Country-by-Country Report in any Jurisdiction, Relevant CbC Regulations shall mean the OECD BEPS Action 13 Final Report and the OECD Guidance on the Implementation of Country-by-Country Reporting.

8.2.3 Disapplication of a Safe Harbour

8.2.3.1 An election made under the provisions of Article 8.2 shall not apply in circumstances where:

1. Top-up Tax could be charged under the provisions of this Decision if the Effective Tax Rate for the UAE computed in accordance with Article 5 was below the Minimum Rate; and
2. the Federal Tax Authority notifies the Liable Constituent Entity (or Entities) within 36 months after the filing of the Top-up Tax Return of specific facts and circumstances that may have materially affected the eligibility of the Constituent Entities located in the UAE for the relevant safe harbour and invites the Liable Constituent Entity (or Entities) to clarify within six months the effect of those facts and circumstances on the eligibility of those Constituent Entities for that safe harbour; and
3. the Liable Constituent Entity (or Entities) fail(s) to demonstrate within the response period that those facts and circumstances did not materially affect the eligibility of the Constituent Entities for the relevant safe harbour.

8.2.3.2 For purposes of Article 8.2.3 (b), the Federal Tax Authority may notify some of the Liable Constituent Entities instead of all of the Liable Constituent Entities in cases where it is difficult, under particular circumstances, to notify all the Liable Constituent Entities.

Article 9
Transition rules

Article 9.1. Tax Attributes Upon Transition

9.1.1 When determining the Effective Tax Rate for the UAE in a Transition Year, and for each subsequent year, the MNE Group shall take into account all of the deferred tax assets and deferred tax liabilities reflected or disclosed in the financial accounts of all of the Constituent Entities in the UAE for the Transition Year. Such deferred tax assets and liabilities must be taken into account at the lower of the Minimum Rate or the applicable domestic tax rate. A deferred tax asset that has been recorded at a rate lower than the Minimum Rate may be taken into account at the Minimum Rate if the taxpayer can demonstrate that the deferred tax asset is attributable to a Pillar Two Loss. For purposes of applying this Article, the impact of any valuation adjustment, or accounting recognition adjustment with respect to a deferred tax asset is disregarded.

9.1.2 Deferred tax assets arising from items excluded from the computation of Pillar Two Income or Loss under Article 3, including those that derive from deductions that are not allowed for accounting purposes, must be excluded from the Article 9.1.1 computation when such deferred tax assets are generated in a transaction that takes place after 30 November 2021.

9.1.3 In the case of a domestic or cross-border transfer of assets between Constituent Entities after 30 November 2021 and before the commencement of a Transition Year, the Pillar Two tax basis in the acquired assets (other than inventory) shall be based upon the disposing Entity's carrying value of the transferred assets upon disposition with the deferred tax assets and liabilities brought into the application of the Pillar Two Rules determined on that basis.

9.1.4 For purposes of Article 9.1.1:

1. a deemed deferred tax asset from losses that have not been recognised due to an accounting recognition adjustment or valuation allowance, or because the recognition criteria was not met, may be generated;
2. the deferred tax assets and deferred tax liabilities shall not be subject to any adjustments under Article 4.4.1(a), (b), (c), or (d), or Article 4.4.4, except for the adjustments referred to in Article 9.1.2;
3. notwithstanding Article 4.4.1(e), deferred tax assets that derive from a tax credit carry-forward shall be taken into account and their amount shall be equal to the deferred tax assets accrued in the financial accounts if the tax rate used to determine the deferred tax assets is below the Minimum Rate or, in any other case, such deferred tax assets shall be determined in accordance with the following formula:

Where:

1. Deferred tax assets in the financial accounts means the deferred tax assets reflected or disclosed in the financial accounts attributable to a tax credit carry-forward arising in the UAE.
2. Applicable domestic tax rate means the tax rate applicable to the Constituent Entity in the Fiscal Year preceding the Transition Year.
3. Minimum rate means the rate as defined by Article 18.1.

9.1.5 For purposes of Article 9.1.4 (c), the following provisions apply where the tax rate applicable to the Constituent Entity changes in a subsequent Fiscal Year:

1. the formula must be re-applied to the outstanding balance of the tax credit in the financial accounts to determine the revised deferred tax asset for purposes of this Decision;
2. the change in the amount of the deferred tax asset resulting from re-application of the formula in Article 9.1.5 shall not be treated as deferred tax expense included in the computation of Adjusted Covered Taxes in the re-application year; and
3. the deferred tax expense for the re-application year and subsequent years shall be determined by reference to the amount of the reversal of the deferred tax asset after re-application of the formula in Article 9.1.5.

9.1.6 The Transition Year referred to in Article 9.1.3 is the Transition Year of the disposing Constituent Entity. The Transition Year of the disposing Constituent Entity is the first year in which its low-taxed income becomes subject to charge under the Pillar Two Rules irrespective of when other Constituent Entities in the UAE are subject to the Pillar Two Rules.

9.1.7 For purposes of Article 9.1.3, a transfer of assets includes but is not limited to:

1. any transfer of rights to an item of economic value in which the acquiring Entity creates or increases the carrying value of an asset in its financial accounts and the disposing Entity recognises the corresponding amount of income after 30 November 2021 and before the commencement of a Transition Year;
2. transfers or deemed transfers of assets within the same Entity;
3. sale of an asset;
4. capital leases, which are accounted for in the same or similar manner as a purchase of an asset;
5. licenses that are effectively treated as a sale for accounting purposes;
6. transfers of assets through a sale of a Controlling Interest;
7. prepayment of royalties or rents, where the licensor/lessor records the prepayment as income and the licensee/lessee capitalizes and amortizes the asset in its financial accounts;
8. total return swaps where the underlying asset is transferred to the financial accounts of the Entity that acquired the rights to income and capital gains generated by an underlying asset;
9. migration of an Entity/Entities where an MNE Group receives a step-up in the tax basis or carrying value (e.g. based on fair value of assets) of the relocated assets; and
10. changes to fair value accounting where the Entity records the relevant gains or losses from fair value changes of the underlying asset and corresponding adjustments to the carrying value of the asset.

9.1.8 Article 9.1.3 does not apply to a lease, license, or a total return swap where the transacting parties account for the income and corresponding expense items in the same Fiscal Years.

9.1.9 For purposes of Article 9.1.3, the following provisions shall apply for purposes of determining the Pillar Two tax basis in the acquired assets that are transferred between Constituent Entities after 30 November 2021:

1. the carrying value of the transferred assets may be increased by capitalised expenditures or decreased by amortization or depreciation that arise after the transaction and before the beginning of the Transition Year, in accordance with the accounting standard used in the financial statements used for purposes of determining the Pillar Two Income or Loss;
2. any increased depreciation or amortization attributable to recording assets at fair value in the financial accounting of the acquiring Entity must be excluded from the computation of the Pillar Two Income or Loss; and
3. where an acquiring Constituent Entity recorded the asset acquired at fair value in its financial accounts, it may instead use the carrying value of that asset reflected in its financial accounts in all subsequent years if it would otherwise be entitled to take into account a deferred tax asset equal to the Minimum Rate multiplied by the difference in the local tax basis in the asset and the Pillar Two carrying value of the asset determined under Article 9.1.3.