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 3-135   MEANING OF MARKETABLE PRICE FLOOR  

3-135(1)    
The Marketable Price Floor of a tax credit is 80% of the net present value (the NPV ) of the amount of the tax credit, computed in accordance with subsections (2) , (3) and (4) .

3-135(2)    
Compute the NPV based on the yield to maturity on a debt instrument that:

(a)    if the tax credit meets the requirement in subsection 3-130(3) - is issued in the Origination Year, by the government that issued the tax credit; and

(b)    if the tax credit meets the requirement in subsection 3-130(4) - is issued in the Fiscal Year in which the tax credit is transferred to the purchaser, by the government that issued the tax credit; and

(c)    has a maturity that is equal or similar to the period during which the tax credit can be used by the holder of the credit to reduce its liability for a Covered Tax (but not exceeding 5 years).

3-135(3)    
Base the cash flow projection used in computing the NPV on the maximum amount that can be used each year under the legal design of the credit, having regard to any amount used in a previous year.

3-135(4)    
In computing the NPV, treat the amount of the tax credit as being the lower of:

(a)    the face value of the tax credit; and

(b)    the remaining creditable amount in relation to the tax credit.