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

CHAPTER 4 - COMPUTATION OF ADJUSTED COVERED TAXES  

PART 4-5 - THE GloBE LOSS ELECTION  

Note:

The GloBE Loss Deferred Tax Asset of an MNE Group, or the GloBE Loss Deferred Tax Asset of an Ultimate Parent Entity of an MNE Group, to the extent that it is used, forms part of Additions to Covered Taxes under paragraph 4-15(b) or (c) .

SECTION 4-125   GloBE LOSS DEFERRED TAX ASSET OF AN MNE GROUP  
Establishment and increase

4-125(1)    
If a GloBE Loss Election for an MNE Group made under subsection 4-120(2) applies to a jurisdiction and a Fiscal Year under subsection 4-120(3) :

(a)    Part 4-4 does not apply to a Constituent Entity of the MNE Group that is located in the jurisdiction in the Fiscal Year; and

(b)    if there is a Net GloBE Loss of the MNE Group for the jurisdiction for the Fiscal Year and a GloBE Loss Deferred Tax Asset of the MNE Group for the jurisdiction has not been established:

(i) a GloBE Loss Deferred Tax Asset of the MNE Group for the jurisdiction is established; and

(ii) the amount of that GloBE Loss Deferred Tax Asset is the Net GloBE Loss multiplied by the Minimum Rate; and

(c)    if there is a Net GloBE Loss of the MNE Group for the jurisdiction for the Fiscal Year and a GloBE Loss Deferred Tax Asset of the MNE Group for the jurisdiction has been established:

(i) the GloBE Loss Deferred Tax Asset is increased; and

(ii) the amount of that increase is the Net GloBE Loss multiplied by the Minimum Rate.

Note:

Modifications may apply to the computation of Net GloBE Loss for the purposes of this subsection if a GloBE Loss Election for the Ultimate Parent Entity of the MNE Group also applies to the Fiscal Year: see subsections 4-135(3) and (4) .

Use

4-125(2)    
If there is Net GloBE Income of the MNE Group for the jurisdiction for a Fiscal Year after the Fiscal Year in which the GloBE Loss Deferred Tax Asset is established, use an amount of the GloBE Loss Deferred Tax Asset for the Fiscal Year, for the purposes of paragraph 4-15(b) , equal to the lower of the following:

(a)    the Net GloBE Income multiplied by the Minimum Rate;

(b)    the amount of the GloBE Loss Deferred Tax Asset that has not been previously used under this subsection.

Note:

Modifications may apply to the computation of Net GloBE Income for the purposes of this subsection if a GloBE Loss Election for the Ultimate Parent Entity of the MNE Group also applies to the Fiscal Year: see subsections 4-135(3) and (4) .

Reduction to zero

4-125(3)    
If a GloBE Loss Election for an MNE Group made under subsection 4-120(2) that applies to a jurisdiction is revoked:

(a)    the GloBE Loss Deferred Tax Asset of the MNE Group for the jurisdiction is reduced to zero on the first day of the first Fiscal Year to which the GloBE Loss Election is no longer applicable; and

(b)    Parts 4-4 and 9-1 apply in respect of that and subsequent Fiscal Years to a Constituent Entity of the MNE Group that is located in the jurisdiction in the Fiscal Year.