Article 12 - De Minimis Exclusion

The Tax for a Filing Constituent Entity for a Fiscal Year shall be equal to zero, if the Filing Constituent Entity notifies the Bureau of an Annual Election to apply the De Minimis Exclusion, provided that the following two conditions are met:

1. The Average Constituent Entity Revenue of all Constituent Entities located in the Kingdom, which are members of the same Multinational Enterprise Group, is less than ten million Euro (EUR 10 million).

2. The Average Constituent Entity Income or Loss of all Constituent Entities located in the Kingdom, which are members of the same Multinational Enterprise Group, is a loss or income less than one million Euro (EUR 1 million).

For the purposes of Paragraph A of this Article, the Average Constituent Entity Revenue or the Average Constituent Entity Income or Loss is the average of the Constituent Entity Revenue or Constituent Entity Income or Loss for the current and the two preceding Fiscal Years.

For the purposes of applying the provisions of Paragraphs A and B of this Article, the following should be considered:

1. The Constituent Entity Revenue for a Fiscal Year is the sum of the revenue of all Constituent Entities referred to in Clause 1 of Paragraph A of this Article for that Fiscal Year, subject to the adjustments calculated according to the provisions of Article 6 of this Law.

2. The Constituent Entity Income or Loss for a Fiscal Year is the Net Constituent Entity Income for all Constituent Entities referred to in Paragraph A of this Article, if any, or the Net Constituent Entity Loss.

For the purposes of applying the provisions of Paragraph C of this Article, the Net Constituent Entity Loss means an amount equal to zero or a negative amount, if any, of the aggregate Constituent Entity Income of the Constituent Entities referred to in Paragraph A of this Article and the aggregate Constituent Entity Loss of the Constituent Entities referred to in Paragraph A of this Article.

The provisions of Paragraph A of this Article shall not apply to Stateless Constituent Entities and investment entities. Additionally, the revenue and income of these Entities are excluded from the computation of the Average Constituent Entity Revenue and the Average Constituent Entity Income or Loss.

For the purposes of applying the provisions of this Article, references to Constituent Entities are considered to include Joint Ventures and Joint Venture Subsidiaries.

The Regulations shall prescribe the rules, conditions, and controls and other matters necessary for the application of the provisions of this Article in a manner consistent with the Model Rules, administrative guidance, and commentary issued by the Organisation for Economic Co-operation and Development (OECD).