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

CHAPTER 4 - COMPUTATION OF ADJUSTED COVERED TAXES  

PART 4-6 - POST-FILING ADJUSTMENTS AND TAX RATE CHANGES  

SECTION 4-140   EFFECT OF ADJUSTMENT TO THE LIABILITY FOR COVERED TAXES  

4-140(1)    
This section applies if, in a Fiscal Year (the current year ), there is an adjustment to the liability for Covered Taxes, recorded in the financial accounts, of a Constituent Entity (the relevant Constituent Entity ) of an MNE Group for a prior Fiscal Year (the prior year ).

Note:

The treatment of adjustments under this section will not result in refunds of tax payable under section 6 , 8 or 10 of the Act for the prior Fiscal Year.

Increase or immaterial decrease covered by an election under subsection (5)

4-140(2)    
If there is an increase, or an immaterial decrease covered by an election for the MNE Group under subsection (5) , in the sum of the adjustments to liability for Covered Taxes for the prior year of each Constituent Entity of the MNE Group located in the same jurisdiction as the relevant Constituent Entity, treat the adjustment as an adjustment to the relevant Constituent Entity ' s Adjusted Covered Taxes for the current year.

Decrease, other than immaterial decrease covered by an election under subsection (5)

4-140(3)    
If there is a decrease (other than an immaterial decrease covered by an election for the MNE Group under subsection (5) ) in the sum of the adjustments to liability for Covered Taxes for the prior year of each Constituent Entity of the MNE Group located in the same jurisdiction as the relevant Constituent Entity:

(a)    recalculate in accordance with section 5-95 :

(i) the Effective Tax Rate of the MNE Group for the jurisdiction for the prior year; and

(ii) the Jurisdictional Top-up Tax of the MNE Group for the jurisdiction for the prior year; and

(b)    for the purposes of that recalculation:

(i) treat the relevant Constituent Entity ' s Adjusted Covered Taxes for the prior year as reduced by the amount of the decrease; and

(ii) treat the relevant Constituent Entity ' s GloBE Income and Loss for the prior year, and for all Fiscal Years ending after the end of the prior year but before the start of the current year, as being adjusted as necessary and appropriate.

4-140(4)    
For the purposes of the subsections (2) and (3) , an immaterial decrease referred to in those sections is an aggregate decrease in that liability of less than 1 million Euros in the sum of adjustments to liability for Covered Taxes for the prior year of each Constituent Entity of the MNE Group located in the same jurisdiction as the relevant Constituent Entity.

Election

4-140(5)    
A Filing Constituent Entity for an MNE Group may make an election for the MNE Group under this subsection that covers an immaterial decrease in the sum of adjustments to liability for Covered Taxes.

4-140(6)    
An election under subsection (5) is an Annual Election.