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

CHAPTER 6 - CORPORATE RESTRUCTURINGS AND HOLDING STRUCTURES  

PART 6-2 - CONSTITUENT ENTITIES JOINING AND LEAVING AN MNE GROUP  

Division 1 - Transfers of Ownership Interests  

SECTION 6-40   DEFERRED TAX ASSETS AND DEFERRED TAX LIABILITIES  

6-40(1)    
Subsection (2) applies if:

(a)    the target becomes a Constituent Entity of the acquiring MNE Group; and

(b)    a deferred tax asset or deferred tax liability is transferred to the acquiring MNE Group as a result of the transfer of Ownership Interests mentioned in subsection 6-15(1) .

6-40(2)    
In applying this instrument in relation to the acquiring MNE Group, take the deferred tax asset or deferred tax liability into account in the same manner and to the same extent as if the acquiring MNE Group controlled the target when the deferred tax asset or deferred tax liability arose.

6-40(3)    
To avoid doubt, subsection (2) does not apply in relation to a GloBE Loss Deferred Tax Asset.

6-40(4)    
Subsections (5) and (6) apply if:

(a)    the target ceases to be a Constituent Entity of the disposing MNE Group; and

(b)    the target becomes a Constituent Entity of the acquiring MNE Group; and

(c)    a deferred tax liability of the target has previously been included in the target ' s Total Deferred Tax Adjustment Amount.

6-40(5)    
In applying sections 4-100 , 4-105 and 4-110 in relation to the disposing MNE Group, treat the deferred tax liability as reversed at the end of the last day of the transfer year.

6-40(6)    
In applying section 4-100 in relation to the acquiring MNE Group:

(a)    treat the deferred tax liability as arising in the transfer year; and

(b)    treat any subsequent increase to the Reductions to Covered Taxes of the target under section 4-100 that results from paragraph (a) as having effect for the Fiscal Year in which the amount is recaptured.