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 3-165   ADJUSTMENT - AGGREGATE ASSET GAIN - ALLOCATION OF AMOUNTS  

3-165(1)    
This section applies if an election for an MNE Group under subsection 3-155(2) applies to a jurisdiction and to a Fiscal Year (the application year ).

3-165(2)    
For the purposes of section 3-160 , the amount allocated to a Constituent Entity of the MNE Group located in the jurisdiction for a Fiscal Year in the election ' s Look-back Period (a Look-back Year ) is the sum of the following:

(a)    the Constituent Entity ' s set-off amount for that year (see subsection (3) of this section);

(b)    the Constituent Entity ' s remainder amount for that year (see subsection (5) of this section).

Set-off amounts

3-165(3)    
Compute set-off amounts as follows:

(a)    first, compute the amount of the MNE Group ' s Aggregate Asset Gain for the application year;

(b)    next, for each Loss Year, compute the amount of the Net Asset Loss for each Constituent Entity of the MNE Group located in the jurisdiction;

(c)    next, apply the amounts of Net Asset Loss (to the extent they have not already been applied under this paragraph in respect of an election for a previous year), in accordance with subsection (4) , to reduce the amount computed under paragraph (a) of this subsection (but not below zero).

A Constituent Entity ' s set-off amount for a Look-back Year is the amount of the Constituent Entity ' s Net Asset Loss for that year that is applied under paragraph (c) .

3-165(4)    
For the purposes of paragraph (3)(c) :

(a)    apply the amounts in sequence, where an amount for an earlier Loss Year is applied before an amount for a later Loss Year; and

(b)    amounts may be applied in part.

Note:

As a result of paragraph (4)(b) , part of an amount of Net Asset Loss of a Constituent Entity of the MNE Group for a Loss Year may be applied to reduce the amount of the MNE Group ' s Aggregate Asset Gain for the application year to zero.

Remainder amounts

3-165(5)    
If the result of paragraph (3)(c) is not zero, compute the remainder amount of a Constituent Entity of the MNE Group located in the jurisdiction for each Look-back Year in accordance with subsection (6) or (7) .

3-165(6)    
If one or more Constituent Entities of the MNE Group located for the Look-back Year in the jurisdiction have a Net Asset Gain for the application year, compute the remainder amount in accordance with the following formula:

Remainder	×	CE ' s gain
5		Total gain

where:

CE ' s gain
means the Constituent Entity ' s Net Asset Gain for the application year.

remainder
is the result of paragraph (3)(c) .

total gain
means the total of the amounts of Net Asset Gain of all Constituent Entities of the MNE Group located in the jurisdiction for the application year.

3-165(7)    
If subsection (6) does not apply, compute the remainder amount in accordance with the following formula:

Remainder	×	1
5		Number of CEs

where:

number of CEs
means the total number of Constituent Entities of the MNE Group located in the jurisdiction for the Look-back Year.

remainder
is the result of paragraph (3)(c) .