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

CHAPTER 4 - COMPUTATION OF ADJUSTED COVERED TAXES  

PART 4-1 - ADJUSTED COVERED TAXES  

Division 1 - General  

SECTION 4-20   MEANING OF REDUCTIONS TO COVERED TAXES  

4-20(1)    
The Reductions to Covered Taxes of a Constituent Entity for a Fiscal Year is the sum of the following:

(a)    if income is excluded from the computation of the Constituent Entity ' s GloBE Income or Loss under Chapter 3 - the sum of:

(i) the Constituent Entity ' s Accrued Current Covered Tax Expense for the Fiscal Year that relates to the income; and

(ii) the amount (if any) of Additions to Covered Taxes for the Fiscal Year of the Constituent Entity that relates to the income;

Note:

An amount of Covered Taxes in respect of a Net Asset Gain or Net Asset Loss is excluded from the computation of Adjusted Covered Taxes by subsection 3-160(2) .

(b)    the amount (if any) of credit or refund, in respect of a tax credit (other than a Qualified Refundable Tax Credit or a Marketable Transferable Tax Credit), that:

(i) is credited or refunded to the Constituent Entity in respect of Covered Taxes in the Fiscal Year; and

(ii) is not recorded as a reduction to the Constituent Entity ' s Accrued Current Covered Tax Expense for the Fiscal Year;

(c)    if the Constituent Entity transferred a Non-Marketable Transferable Tax Credit during the Fiscal Year:

(i) where the Constituent Entity is the person to whom the tax credit was originally granted - the amount (if any) received by the Constituent Entity in exchange for the transfer; or

(ii) where subparagraph (i) does not apply, and the transfer amount mentioned in subsection 3-145(3) is a positive number - that amount;

Note:

If the transfer amount is a negative number, it is included in the Constituent Entity ' s GloBE Income or Loss: see subsection 3-145(2) .

(d)    the amount (if any) of Covered Taxes refunded or credited to the Constituent Entity (other than a Qualified Refundable Tax Credit or a Marketable Transferable Tax Credit) that is not treated as an adjustment to the Constituent Entity ' s Accrued Current Covered Tax Expense for the Fiscal Year;

(e)    the amount (if any) of the Constituent Entity ' s Accrued Current Covered Tax Expense for the Fiscal Year that relates to an uncertain tax position;

(f)    the amount (if any) of the Constituent Entity ' s Accrued Current Covered Tax Expense for the Fiscal Year that is not expected to be paid within 3 years after the last day of the Fiscal Year.

Use of purchased Non-Marketable Transferable Tax Credits

4-20(2)    
Subsection (3) applies if an amount mentioned in paragraph (1)(b) is in respect of a tax credit that is a Non-Marketable Transferable Tax Credit purchased by the Constituent Entity.

4-20(3)    
Reduce the amount by the multiplying it by the following fraction:

(a)    the excess of the face value of the tax credit over its purchase price;

divided by:

(b)    face value of the tax credit.