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

CHAPTER 5 - COMPUTATION OF EFFECTIVE TAX RATE  

PART 5-1 - DETERMINATION OF EFFECTIVE TAX RATE  

Note:

In computing amounts under Parts 5-1 , 5-2 , 5-3 and 5-4 , special rules apply for MNE Groups which have any of the following:

(a) a Minority-Owned Constituent Entity: see sections 5-120 and 5-125 ;

(b) a Joint Venture (and any JV Subsidiaries): see section 6-75 ;

(c) an Investment Entity or Insurance Investment Entity: see sections 7-100 and 7-115 , and Parts 7-5 and 7-6 .

SECTION 5-10   EFFECTIVE TAX RATE - EXCESS NEGATIVE TAX EXPENSE ADMINISTRATIVE PROCEDURE  

5-10(1)    
Subsection (2) applies if, disregarding that subsection, the sum of the Adjusted Covered Taxes mentioned in paragraph 5-5(2)(a) is less than zero.

5-10(2)    
For the purposes of subsection 5-5(2) , treat that sum as being zero.

5-10(3)    
If subsection (2) applies:

(a)    where an Excess Negative Tax Expense Carry-forward has not been established for the MNE Group for the jurisdiction:

(i) an Excess Negative Tax Expense Carry-forward is established for the MNE Group for the jurisdiction; and

(ii) the balance of the Excess Negative Tax Expense Carry-forward is increased by the absolute value of the sum mentioned in subsection (1) ; or

(b)    otherwise - the balance of Excess Negative Tax Expense Carry-forward for the MNE Group for the jurisdiction is increased by the absolute value of the sum mentioned in subsection (1) .

Note 1:

In some circumstances, the balance of the Excess Negative Tax Expense Carry-forward is applied to reduce the sum of Adjusted Covered Taxes in relation to the jurisdiction mentioned in paragraph 5-5(2)(a) : see subsection 5-5(4) .

Note 2:

The balance of the Excess Negative Tax Expense Carry-forward may also be increased under section 4-35(3) .