Global Minimum Tax Act — G-3.3 39
Acquisitions and dispositions of assets and liabilities — no GloBE reorganization 39 (1) If a constituent entity of an MNE group disposes of or acquires assets and liabilities (other than in the course of a GloBE reorganization) in a fiscal year, (a) in the case of a disposition, any gain or loss on the disposition is to be included in determining the disposing constituent entity’s GloBE income or loss for the year; and (b) in the case of an acquisition, the GloBE income or loss of the acquiring constituent entity is to be determined using (i) if subsection 38 (2) applies to treat the acquiring constituent entity as having acquired the assets and liabilities, the fair value of the assets and liabilities, and (ii) in any other case, the acquiring constituent entity’s carrying value of the acquired assets and liabilities immediately after the acquisition, determined under the accounting standard used in preparing the consolidated financial statements of the ultimate parent entity of the MNE group. Transfers of assets and liabilities — GloBE reorganization (2) If a constituent entity of an MNE group disposes of or acquires assets and liabilities in a fiscal year in the course of a GloBE reorganization (a) in the case of a disposition, in computing the disposing constituent entity’s GloBE income or loss for the fiscal year, (i) if the disposition gives rise to a non-qualifying gain or loss, the non-qualifying gain or loss is to be included, and (ii) in any other case, any gain or loss on the disposition is to be excluded; and (b) in the case of an acquisition, the acquiring constituent entity’s GloBE income or loss for the fiscal year and each subsequent fiscal year is to be determined using the disposing constituent entity’s carrying values of the assets and liabilities immediately before the disposition, adjusted, in a manner consistent with the income tax laws of the jurisdiction in which the acquiring constituent entity is located, to take into account any non-qualifying gain or loss arising from the disposition. Election to adjust assets and liabilities to fair value (3) If the filing constituent entity elects for a particular fiscal year in respect of a particular constituent entity of the MNE group that is required or permitted, under the income tax laws of the jurisdiction where it is located, to adjust the basis of its assets or the amount of its liabilities (referred to in this subsection as “adjusted assets” and “adjusted liabilities”) for tax purposes to fair value in the particular fiscal year as a result of a transaction or event (referred to in this subsection as the “triggering event”), other than a triggering event that is a sale of assets in the ordinary course of a business or the application of a transfer pricing provision under the income tax laws, the following rules apply: (a) the fair value for financial accounting purposes of an adjusted asset or adjusted liability immediately after the triggering event is to be used in determining the particular constituent entity’s GloBE income or loss for the particular fiscal year and each subsequent fiscal year; (b) for the purposes of determining the particular constituent entity’s GloBE income or loss, the particular constituent entity’s (i) gain, if any, in respect of an adjusted asset or adjusted liability is the amount determined by the formula A − B − C where A is the fair value of the asset or liability immediately after the triggering event, B is the carrying value of the asset or liability for financial accounting purposes immediately before the triggering event, and C is the non-qualifying gain, if any, in respect of the asset or liability arising in connection with the triggering event, and (ii) loss, if any, in respect of an adjusted asset or adjusted liability is the amount determined by the formula B − A − D where D is the non-qualifying loss, if any, in respect of the asset or liability arising in connection with the triggering event; (c) the net total