CHAPTER 8 - SAFE HARBOR AND INITIAL PHASE OF INTERNATIONAL ACTIVITY
Article 64 - Initial Phase of International Activity
The Tax (Top-Up Tax) Due on the Taxpayer shall be equal to zero in the Initial Phase of International Activity (IPIA), if it is a member of an MNE Group that meets the following conditions:
The MNE Group has CE in no more than six jurisdictions, including the State.
The total net book value of the tangible assets does not exceed EUR 50 million (or its equivalent in Kuwaiti Dinars) for all Entities located in all states or jurisdictions, other than the state or jurisdiction in which the MNE Group has the highest value of tangible assets when the GloBE rules are applied for the first time to that Group.
None of the Ownership Shares in Entities located in The State shall be held by a Parent Entity that applies IIR.
The Net Book Value of Tangible Assets means the average value of Tangible Assets at the beginning and end of the Tax Period, after taking into account accumulated depreciation, depletion, and impairment, as recorded in the FS prepared in accordance with the Authorized Financial Accounting Standards.
The net book value of the tangible assets per jurisdiction is based on the combined net book values of all CEs located in that jurisdiction.
As an exception to the provisions of the preceding paragraphs of this Article, tangible assets owned by Investment or Insurance Investment Entities, JVs or their subsidiaries are excluded.
Tangible assets assigned to a PE are allocated to the jurisdiction of that PE if they are reported in the PE’s separate financial statements and should not be allocated to the Tangible Assets of the Main Entity.
Tangible assets held by Stateless CEs are considered outside of the reference jurisdiction unless proven by the MNE Group that the tangible assets is actually located in the State.
Tangible assets held by MOCEs are fully included.
The provisions of this Article shall not apply to any Tax Period commencing after the lapse of five-Tax Periods starting from the first day of the first Tax Period in which the MNE Group was subject to GloBE Rules in any Jurisdiction.