(1) On the making of an election by a filing constituent entity, a constituent entity that is subject to an eligible distribution tax system shall include the amount, determined in accordance with subsection (2) as deemed distribution tax, in the adjusted covered taxes of that constituent entity for the fiscal year.
(2) The amount of the deemed distribution tax referred to in subsection (1) shall be the lesser of -
(a) the amount necessary to increase the effective tax rate as calculated in accordance with section 111AC for the jurisdiction of the constituent entity referred to in subsection (1) for the fiscal year to the minimum tax rate, and
(b) the amount of distribution tax that would have been due if the constituent entities located in the jurisdiction referred to in paragraph (a) had distributed all of their income that is subject to the eligible distribution tax system during the fiscal year.
(a) Where an election is made under subsection (1), a deemed distribution tax recap
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