005

1. Income tax of 25% imposed on XCo's taxable income. 

a. The denial of deduction for some expenses, and the fact that some other expenses qualify for a 200% deduction, should not prevent the income tax from being a tax "with respect to [XCo’s] income or profits" (Art. 4.2.1(a)). See October 2020 blueprint report (Commentary to GloBE rules has not yet been released!) 

b. The income tax on the CFC inclusion will be a tax "with respect to … its share of the income or profits of a Constituent Entity in which it owns an Ownership Interest" (Art. 4.2.1(a)), if the foreign subsidiary is a direct subsidiary. However, if the foreign subsidiary is indirectly owned by XCo, it's doubtful whether the phrase, "owns an Ownership Interest", is satisfied. Thus, Covered Tax, subject to the issue concerning the foreign subsidiary. 

2. Special tax of 30% imposed by Y on XCo's share of Amount A allocated to Y under Pillar One: This should be a tax "with respect to [XCo's] income or profits" (Art. 4.2.1(a)). Also, see October 2020 blueprint report. Thus, Covered Tax. 

3. Resource levy of 20% imposed on value (determined according to government schedule) of iron ore extracted in XCo’s mining operations: Not a tax "with respect to [XCo's] income or profits" (Art. 4.2.1(a)); and not a tax "in lieu of a generally applicable corporate income tax" (Art. 4.2.1(c)), if it is imposed in addition to, and not in substitution for, income tax: see October 2020 blueprint report. Thus, not Covered Tax. 

4. Withholding tax of 10% imposed on gross amount of rent: If 25% income tax does not apply to the rent, the withholding tax should be a tax "in lieu of a generally applicable corporate income tax" (Art. 4.2.1(c)).Thus, Covered Tax. 

5. Qualified Domestic Minimum Top-Up Tax: Excluded by Art. 4.2.2(b). Thus, not Covered Tax. 

6. Wealth tax of 5% imposed on XCo's shareholders' equity: This would be a tax "levied by reference to retained earnings and corporate equity" (Art. 4.2.1(d)). Thus, Covered Tax. 

7. Capital duty of 1% imposed on issue of new shares: this does not fall into any category of Covered Tax. Thus, not Covered Tax. 

8. Top-up Tax imposed on XCo by X's "income inclusion rule", which is not a Qualified IIR: Not excluded by Art. 4.2.2(a), which is limited to a Qualified IIR. This will be a tax "with respect to … its share of the income or profits of a Constituent Entity in which it owns an Ownership Interest" (Art. 4.2.1(a)), if XCo directly owns shares in the Constituent Entity (i.e., direct subsidiary). However, if the Constituent Entity is indirectly owned by XCo, the same issue as mentioned above applies. Thus, Covered Tax, subject to the issue concerning the Constituent Entity.