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 1 - Article 3.2.1 adjustments  

SECTION 3-35   MEANING OF EXCLUDED EQUITY GAIN OR LOSS  

3-35(1)    
Excluded Equity Gain or Loss of a Constituent Entity of an MNE Group for a Fiscal Year means the gain, profit or loss included in the Financial Accounting Net Income or Loss of the Constituent Entity for the Fiscal Year arising from any of the following:

(a)    gains and losses from changes in fair value, or from the impairment, of an Ownership Interest, except for a Portfolio Shareholding;

(b)    profit or loss in respect of an Ownership Interest included under the equity method of accounting;

(c)    gains and losses from disposition of an Ownership Interest, except for a disposition of an Ownership Interest that is a Portfolio Shareholding at the date of the disposition;

(d)    if an election under subsection (3) applies to the Constituent Entity and the Fiscal Year - foreign exchange gains and losses, to the extent that they are covered by subsection (2) .

Note:

See Part 6-3 for the treatment of gains or losses from the disposition of assets and liabilities.

3-35(2)    
For the purposes of paragraph (1)(d) , this subsection covers a foreign exchange gain or loss to the extent that:

(a)    the foreign exchange gain or loss is attributable to hedging instruments that hedge the currency risk in Ownership Interests (other than Portfolio Shareholdings); and

(b)    the gain or loss is recognised in Other Comprehensive Income at the level of the Consolidated Financial Statements of the Ultimate Parent Entity of the MNE Group; and

(c)    the hedging instrument is considered an effective hedge under the Authorised Financial Accounting Standard used in the preparation of those Consolidated Financial Statements; and

(d)    the economic and accounting effect of the hedging instrument:

(i) if the Constituent Entity holds the hedging instrument - has not been transferred to another Entity; or

(ii) otherwise - has been transferred to the Constituent Entity.

3-35(3)    
A Filing Constituent Entity for an MNE Group may make an election for the MNE Group under this subsection that applies to a specified Constituent Entity of the MNE Group.

3-35(4)    
An election under subsection (3) is a Five-Year Election.