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 4-135   GloBE LOSS DEFERRED TAX ASSET OF AN ULTIMATE PARENT ENTITY  
Establishment and increase

4-135(1)    
If a GloBE Loss Election for an Ultimate Parent Entity of an MNE Group made under subsection 4-130(1) applies to a Fiscal Year under subsection 4-130(2) :

(a)    Part 4-4 does not apply to the Ultimate Parent Entity; and

(b)    if the Ultimate Parent Entity has a GloBE Loss for the Fiscal Year and a GloBE Loss Deferred Tax Asset of the Ultimate Parent Entity has not been established:

(i) a GloBE Loss Deferred Tax Asset of the Ultimate Parent Entity is established; and

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

(c)    if the Ultimate Parent Entity has a GloBE Loss for the Fiscal Year and a GloBE Loss Deferred Tax Asset of the Ultimate Parent Entity has been established:

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

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

Note:

The Ultimate Parent Entity ' s GloBE Loss for the Fiscal Year may have been reduced under section 7-10 .

Use

4-135(2)    
If the Ultimate Parent Entity has GloBE Income 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 of the Ultimate Parent Entity for the Fiscal Year, for the purposes of paragraph 4-15(c) , equal to the lower of the following:

(a)    the 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.

If GloBE Loss Elections for MNE Group and for Ultimate Parent Entity apply to the same Fiscal Year

4-135(3)    
Subsection (4) applies if both of the following apply to a Fiscal Year:

(a)    a GloBE Loss Election for the Ultimate Parent Entity of an MNE Group made under subsection (1) ;

(b)    a GloBE Loss Election for the MNE Group made under subsection 4-120(2) .

4-135(4)    
For the purposes of applying section 4-125 in relation to the GloBE Loss Election for the MNE Group made under subsection 4-120(2) , in computing the Net GloBE Loss or Net GloBE Income of the MNE Group, disregard the GloBE Income or GloBE Loss of the Ultimate Parent Entity.

Reduction to zero

4-135(5)    
If a GloBE Loss Election for an Ultimate Parent Entity made under subsection 4-130(1) is revoked:

(a)    the GloBE Loss Deferred Tax Asset of the Ultimate Parent Entity 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 a subsequent Fiscal Year to the Ultimate Parent Entity.