Article 55 - Minority-owned Constituent Entity

The computation of the Effective Tax Rate and Tax for Constituent Entities that are members of a Minority-owned Subgroup shall be performed as if those Constituent Entities were a separate Multinational Enterprise Group.

The Adjusted Covered Taxes and Constituent Entity Income or Loss of members of a Minority-Owned Subgroup are excluded from the determination of the remainder of the Multinational Enterprise Group's Effective Tax Rate and Net Constituent Entity Income in Paragraphs A and B of Article 8 of the Law.

The provision of this paragraph also does not apply if the Minority-owned Parent Entity is an Investment Entity or an Insurance Investment Entity and an Investment Entity and an Insurance Investment Entity shall not be treated as a member of the Minority-owned Subgroup for the purposes of this provision.

The Effective Tax Rate and Tax of a Minority-owned Constituent Entity that is not a member of a Minority-Owned Subgroup is computed on a standalone entity basis.

The Adjusted Covered Taxes and Constituent Entity Income or Loss of the Minority-owned Constituent Entity are excluded from the determination of the remainder of the Multinational Enterprise Group's Effective Tax Rate and Net Constituent Entity Income in Paragraphs A and B of Article 8 of the Law.

This provision does not apply if the Minority-owned Constituent Entity is an Investment Entity or an Insurance Investment Entity.

For the purposes of these Regulations, all of the following apply:

1. A Minority-owned Constituent Entity is a Constituent Entity in which the Ultimate Parent Entity has a direct or indirect ownership interest of 30% or less.

2. A Minority-owned Parent Entity is a Minority-owned Constituent Entity that holds, directly or indirectly, the Controlling Interests of another Minority-owned Constituent Entity, except where the Controlling Interests of the former Entity are held, directly or indirectly, by a Minority-owned Constituent Entity.

3. A Minority-owned Subgroup is a Minority-owned Parent Entity and its Minority-owned Subsidiaries.

4. A Minority-owned Subsidiary is a Minority-owned Constituent Entity whose Controlling Interests are held, directly or indirectly, by a Minority-owned Parent Entity.

Notwithstanding the provisions of this Article, the following shall apply:

1. The method of allocating the Financial Accounting Net Income or Loss shall be computed in accordance with Article 11 of these Regulations.

2. The method of computation of the Average Constituent Entity Revenue or the Average Constituent Entity Income or Loss shall be in accordance with Article 12 of the Law.