Section 201 | Inclusion ratio

(1)A responsible member’s inclusion ratio for a member with a top-up amount (“the relevant member”) is found as follows—^F1F2

Step 1Determine the adjusted profits of the relevant member with the top-up amount (in accordance with Chapter 4).

Step 2Determine how much of those profits are attributable to ownership interests held by individuals and entities other than the responsible member , but excluding ownership interests in respect of which an amount has been excluded from the relevant member’s adjusted profits.

Step 3Subtract the amount determined under Step 2 from the amount determined under Step 1.

Step 4The inclusion ratio is given by dividing the amount determined under Step 3 by the amount determined under Step 1 .

(2)The amount of profits of the relevant member attributable to ownership interests held by individuals and entities other than the responsible member is the amount that would, in hypothetical consolidated financial statements prepared by the responsible member (whether or not it actually prepared consolidated financial statements), have been treated in those statements as attributable to such individuals and entities under the principles of the authorised accounting standard used, or treated as used (see section 249(1)(d)), in the ultimate parent’s consolidated financial statements.^F3F4

(3)For the purposes of determining what that amount would be in those hypothetical consolidated financial statements of the responsible member, use the following assumptions—

(a)the relevant member’s profits were its adjusted profits as determined in accordance with Chapter 4;

(b)the responsible member had a controlling interest in the relevant member such that all of its income and expenses were consolidated on a line-by-line basis with those of the responsible member;

(c)all of the profits of the relevant member were attributable to transactions with persons who are not members of the multinational group;

(d)all ownership interests that are not directly or indirectly held by the responsible member were held by persons other than members of the multinational group.

(4)Repealed^F5