Article 58 - Taxable Distribution Method Election

Based on the election of the DCE, a CE-owner located in the State that is not an Investment Entity may apply the Taxable Distribution Method Election concerning the Ownership Interest it holds in a CE that is an Investment Entity, provided that it is reasonably expected that the CE owner will be subject to tax on the distributions from the Investment Entity at a tax rate equal to or exceeding the Minimum Tax Rate.

The following clauses must be considered when applying the Taxable Distribution Method:

1. Distributions and deemed distributions of the Investment Entity’s GloBE Income are included in the GloBE Income of the Constituent Entity-owner (other than an Investment Entity) that received the distribution

2. The Local Creditable Tax Gross-up is included in the GloBE Income and Adjusted Covered Taxes of the CE-owner, other than an Investment Entity, that received the distribution;

3. The CE-owner’s proportionate share of the Investment Entity’s Undistributed Net GloBE Income for the Tested Period is treated as GloBE Income of the Investment Entity for the Reporting Tax Period

4. The Investment Entity’s GloBE Income or Loss for the Tax Period and any Adjusted Covered Taxes attributable to such income are excluded from all Effective Tax Rate computations under Chapter 5 and Article 56 of these ERs, except as provided in clause (2) of this paragraph.

The Undistributed Net GloBE Income for a Tax Period is the amount of the Investment Entity’s GloBE Income, if any, for the Tested Period reduced (but not below zero) by:

1. Any Covered Taxes of the Investment Entity;

2. distributions and deemed distributions to shareholders other than CE that are Investment Entities in the Testing Period;

3. GloBE Losses arising in the Testing Period; and

4. Investment Loss Carry-forwards.

Undistributed GloBE income for the Tested Tax Period cannot be reduced by distributions or deemed distributions to the extent that such distributions were treated as a reduction of undistributed GloBE income in a previous tested period.

For purposes of computing Undistributed Net GloBE Income, a GloBE Loss is reduced to the extent it reduced Undistributed Net GloBE Income at the end of a previous Tax Period. If a GloBE Loss for a Tax Period is not reduced to zero before the end of the last Tested Period that includes such Tax Period, the remainder becomes an Investment Loss Carry-forward and is reduced in the same manner as a GloBE Loss in subsequent Tax Periods.

And all that is subject to the following:

1. The Tested Period is the third Tax Period preceding the Reporting Tax Period;

2. The Tested Period is the period beginning with the first day of the Tested Period and ending with the last day of the Reporting Tax Period 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 GloBE Income attributable to such Ownership Interest on the date of such transfer (determined without regard to the deemed distribution);

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 CE-owner’s tax liability arising in connection with a distribution from the Investment Entity.

5. The election under this Article is considered to have a duration of five Tax Periods. In case of revoking of the election, the proportional share of the CE-owner in the undistributed net GloBE income of the Investment Entity for the tested period at the end of the Tax Period preceding the revocation period shall be treated as the GloBE income of the Investment Entity for the revocation period.