Taxation (Multinational - Global and Domestic Minimum Tax) Rules 2024

CHAPTER 3 - COMPUTATION OF GloBE INCOME OR LOSS  

PART 3-2 - ADJUSTMENTS TO DETERMINE GloBE INCOME OR LOSS  

Division 2 - Other Article 3.2 adjustments  

SECTION 3-120   MARKETABLE TRANSFERABLE TAX CREDITS - AMOUNTS  

3-120(1)    
For the purposes of paragraph 3-110(a) , include a Marketable Transferable Tax Credit in accordance with this section.

3-120(2)    
If the holder of the tax credit is the person to whom the tax credit was originally granted (the Originator ), the following rules apply:

(a)    unless paragraph (b) or (c) of this subsection applies - include the face value of the tax credit as income in the Fiscal Year in which the Originator first satisfies the eligibility criteria for the credit (the Origination Year );

(b)    if the Originator transfers the tax credit to another person within 15 months of the end of the Origination Year - include the transfer price (and not the face value) of the tax credit as income in the Origination Year;

(c)    if all of the following conditions are met:

(i) paragraph (b) does not apply;

(ii) the tax credit is related to the acquisition or construction of assets;

(iii) the Originator has an accounting policy of reducing the carrying value of its assets in respect of such tax credits, or recognising the tax credit as deferred income, such that the income from the tax credit is recognised over the productive life of the asset;

include the tax credit in accordance with the accounting policy mentioned in subparagraph (iii) ;

(d)    if the tax credit is transferred to another person more than 15 months after the end of the Origination Year and all or a portion of the tax credit was included under paragraph (c) - include as loss over the remaining productive life of the assets (on a pro rata basis):

(i) the face value of the tax credit;

reduced (but not below zero) by:

(ii) the transfer price of the tax credit;

(e)    if the tax credit is transferred to another person more than 15 months after the end of the Origination Year and paragraph (d) does not apply - include as loss in the Fiscal Year of the transfer:

(i) the face value of the tax credit;

reduced (but not below zero) by:

(ii) the transfer price of the tax credit;

(f)    if all or a portion of the tax credit expires without use - include the face value attributable to the expired portion of the tax credit as loss, or as an increase to the carrying value of the asset (as the case may be), in the Fiscal Year of the expiration.

3-120(3)    
If the tax credit has been transferred to an Entity (the purchaser ) that is an unrelated party of the Originator for a price (the purchase price ), the following rules apply:

(a)    if all or a portion (the used proportion ) of the tax credit is used in a Fiscal Year (the use year ) by the purchaser to satisfy its liability for a Covered Tax for a Fiscal Year - treat the used proportion of the following amount as income in the use year:

(i) the face value of the tax credit as transferred;

reduced (but not below zero) by:

(ii) the purchase price;

(b)    if the tax credit is sold by the purchaser to another person for a price (the sale price ) - treat as income or loss (as the case may be) in the Fiscal Year of the transfer:

(i) the sum of the sale price and so much of the credit as has been used by the purchaser;

reduced by:

(ii) the sum of the purchase price and any amounts treated as income under paragraph (a) ;

(c)    if all or a portion of the tax credit expires without use - treat as loss in the Fiscal Year of the expiration:

(i) the total of the purchase price and any amounts treated as income under paragraph (a) ;

reduced (but not below zero) by:

(ii) the amount of the tax credit used by the purchaser.