Taxation (Multinational - Global and Domestic Minimum Tax) Rules 2024
The qualified debt release amount for a Fiscal Year, of a Constituent Entity that is a debtor, means an amount in respect of a debt release if: (a) the debt release is under a statutory insolvency or bankruptcy proceeding:
(i) that is supervised by a court or other judicial body; or
(b) the following conditions are met:
(ii) under which an independent insolvency administrator is appointed; or
(i) the debt release arises under an arrangement with one or more creditors that are not connected with the debtor (each of which is a third-party creditor );
(ii) it is reasonable to consider that, in the absence of the release of debts owed to one or more third-party creditors under the arrangement, the debtor would be insolvent within 12 months of the date of the release;
(c) if neither paragraph (a) nor (b) applies:
(iii) the debtor obtains an independent expert opinion attesting that the condition in subparagraph (ii) is met; or
(i) the debt release arises under an arrangement with one or more creditors that are not connected with the debtor (each of which is a third-party creditor ); and
(ii) the amount is in respect of a debt owed to a third-party creditor; and
(iii) the debtor ' s liabilities exceed the fair market value of its assets, determined immediately before the debt release; and
(iv) the amount does not exceed the amount covered under subsection (2) .
3-85(2)
For the purposes of subparagraph (1)(c)(iv) , this subsection covers the amount that is the lesser of the following amounts: (a) if, as a result of the debt release, the debtor ' s assets are greater than or equal to its liabilities - the debtor ' s liabilities less the fair market value of its assets, determined immediately before the debt release; (b) if any amount included, as a result of the debt release, in computing net income or loss is offset by a corresponding reduction in deferred tax assets - the reduction in the debtor ' s deferred tax assets resulting from the debt release.
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