Any expense related to a financing arrangement whereby one or more members of an MNE group provide credit to one or more other members of the same group (the “intra-group financing arrangement”) shall not be taken into consideration in the computation of the qualifying income or loss of a constituent entity if the following conditions occur:

(a)   the constituent entity is located in a low-tax jurisdiction or in a jurisdiction that would have been low-taxed if the expense had not accrued to the constituent entity;

(b)   it can reasonably be expected that, over the duration of the intra-group financing arrangement, the amount of expenses that would have to be taken into account for the computation of the qualifying income or loss would increase, without resulting in a significant increase in the taxable income of the constituent entity;

(c)   the constituent entity is counterpart to an intra-group financing arrangement that is located in a high-tax jurisdiction or in a jurisdiction that would not have been low-taxed if the expense had not accrued to the constituent entity.

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