Article 54 - MNE Groups with Multiple UPEs

An MNE Group is considered to have multiple UPEs if the following two conditions are met:

1. The UPEs of those groups are part of a Stapled Structure or a Dual-list Arrangement.

2. At least one Entity or PE of the Groups is located in a jurisdiction different from that of the other Entities in the Groups.

The following provisions apply to MNE groups with multiple UPEs:

1. The Entities and CE in each Group shall be treated as members of a single MNE Group for the purposes of the DMTT Law and these ERs.

2. An Entity, except for an excluded Entity, shall be considered a CE if transactions are consolidated on a line-by-line basis by the MNE Group with multiple UPEs, or if Controlling Interests are owned by Entities within that MNE group.

3. The CFS of the MNE Group with multiple UPEs shall be the CFS referred to in the definition of a Stapled Structure or Dual-List Arrangement in this Article, as applicable, prepared according to an Acceptable Financial Accounting Standard, which shall be considered the accounting standard of the UPE.

4. The UPEs of the separate groups forming the MNE Group with multiple UPEs shall be the UPEs of that MNE group.

5. For the purposes of applying the DMTT Law and these ERs to MNE groups with multiple UPEs, references to an UPE shall apply, as required, as if they were references to multiple UPE.

6. The UPEs are required to submit the Tax Return in accordance with the provisions of Chapter Twelve by designating a DCE to file a consolidated return on behalf of the Group. In this case, the return must include information related to each of the Groups forming the MNE Group with multiple UPEs.

A Stapled Structure is an arrangement entered into between two or more UPEs of separate groups, which is realized by all of the following:

1. 50% or more of the Ownership Interests in the UPEs 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 quoted at a single price.

2. One of those UPEs prepares CFS in which the assets, liabilities, income, expenses and cash flows of all the Entities of the Groups are presented together as those of a single economic unit and that are required by a regulatory regime to be externally audited.

A Dual-List Arrangement is an arrangement entered into between two or more UPEs in separate groups, whereby all of the following occur:

1. The UPEs agrees to combine their business by contract alone;

2. Pursuant to contractual arrangements, the UPEs will make distributions (with respect to dividends and in liquidation) to their shareholders based on a fixed ratio;

3. Their activities are managed as a single economic entity under contractual arrangements while retaining their separate legal identities;

4. The Ownership Interests in the UPEs comprising the agreement are quoted, traded or transferred independently in different capital markets; and

5. The UPEs prepare CFS in which the assets, liabilities, income, expenses and cash flows of all the Entities of the Groups are presented together as those of a single economic unit and that are required by a regulatory regime to be externally audited.