Global Minimum Tax Act — G-3.3 26
GloBE loss deferred tax asset 26 If a filing constituent entity of a particular MNE group elects, in respect of a jurisdiction that does not have an eligible distribution tax system, for the GloBE transition year of the particular MNE group in respect of the jurisdiction, the following rules apply: (a) paragraphs (b) and (c) apply in respect of each fiscal year (referred to in this section as an “election year”) of the particular MNE group that is the GloBE transition year or that occurs after the GloBE transition year but before the revocation year in respect of the election; (b) a GloBE loss deferred tax asset of the particular MNE group, in respect of the jurisdiction, is deemed to arise in any election year in which the particular MNE group has a net GloBE loss in respect of the jurisdiction, in an amount determined by the formula A × B where A is the absolute value of the net GloBE loss for the election year, and B is the minimum rate; (c) for the purposes of applying paragraph 22 (2)(b) in respect of an election year (referred to in this paragraph as the “application year”) in which the particular MNE group has net GloBE income in respect of the jurisdiction, a particular constituent entity that is located in the jurisdiction is considered to have reversed a particular GloBE loss deferred tax asset of the particular MNE group in respect of the jurisdiction that arose in a preceding election year (referred to in this paragraph as the “loss election year”), in an amount determined by the formula C x D ÷ E where C is the lesser of (i) the amount determined by the formula F × G − H where F is the particular MNE group’s net GloBE income in respect of the jurisdiction for the application year, G is the minimum rate, and H is the total of all amounts each is which is the amount determined by the formula K − L where K is the amount of another GloBE loss deferred tax asset of the particular MNE group, in respect of the jurisdiction, that arose in another election year preceding the loss election year, and L is the total of all amounts each of which is the portion of the other GloBE loss deferred tax asset that was considered to have been applied by a constituent entity in an election year preceding the application year, and (ii) the amount determined by the formula I − J where I is the particular GloBE loss deferred tax asset, and J is the total of all amounts each of which is all or the portion of the particular GloBE loss deferred tax asset that was considered to have been reversed by a constituent entity in an election year preceding the application year, D is the particular constituent entity’s GloBE income for the application year, and E is the total of all amounts each of which is the GloBE income of any constituent entity of the particular MNE group that is located in the jurisdiction for the application year; and (d) if the ultimate parent entity of the particular MNE group is a flow-through entity that is located in the jurisdiction, paragraphs (b) and (c) are to be applied in relation to the constituent entities of the particular MNE group that are located in the jurisdiction as if the ultimate parent entity were (i) the only constituent entity, of a separate MNE group, that is located in the jurisdiction, and (ii) not a constituent entity, of the particular MNE group, that is located in the jurisdiction.