Global Minimum Tax Act — G-3.3 37
a A − B where A is the total of all amounts each of which is determined by the formula C − D where C is the amount determined under clause (1)(c)(ii)(B) for the jurisdiction for any fiscal year preceding the particular fiscal year, and D is the total of all amounts each of which is the portion of the amount determined for C that was applied at the end of the preceding fiscal year referred to in the description of C as a reduction under clause (1)(c)(ii)(B) in determining the balance of a deemed distribution tax recapture account of the MNE group for the jurisdiction; and B is the total of all amounts each of which is the portion of a recapture account loss carry-forward of the MNE group for the jurisdiction for a fiscal year preceding the particular fiscal year that was applied as a reduction under clause (1)(c)(ii)(C) in determining the balance of a deemed distribution tax recapture account of the MNE group for the jurisdiction. ETR adjustment provision — four-year rule (4) If the outstanding balance of a deemed distribution tax recapture account of an MNE group in respect of a jurisdiction for a particular fiscal year is greater than nil at the end of the fourth fiscal year (referred to in this subsection as the “recapture year”) immediately following the particular fiscal year (a) this subsection applies in the recapture year; (b) for the purposes of applying subsection 31 (1), the jurisdictional adjusted covered taxes of the MNE group for the jurisdiction for the particular fiscal year (being the adjustment year) is deemed to be equal to the jurisdictional adjusted covered taxes, determined without reference to this subsection and subsection 31 (1), minus an amount equal to the outstanding balance of the deemed distribution tax recapture account at the end of the recapture year; and (c) for the purposes of applying subparagraph (1)(c)(ii), at the end of any fiscal year following the recapture year, the outstanding balance of the deemed distribution tax recapture account is deemed to be nil. ETR adjustment provision — departing constituent entity (5) In the fiscal year (referred to in this subsection as the “departure year”) in which a departing constituent entity of an MNE group that is located in a jurisdiction leaves the MNE group or transfers substantially all of its assets to a recipient that is not, at the time of the transfer, a standard constituent entity of the MNE group that is located in the jurisdiction (a) this subsection applies; (b) for the purposes of applying subsection 31 (1), the jurisdictional adjusted covered taxes of the MNE group for the jurisdiction for a fiscal year preceding the departure year (referred to in this subsection as a “pre-departure year”) for which the outstanding balance of the deemed distribution tax recapture account at the end of the departure year is greater than nil (each of those pre-departure years being an adjustment year), is deemed to be equal to the jurisdictional adjusted covered taxes for that pre-departure year, determined without reference to this subsection and subsection 31 (1), minus an amount (referred to in this subsection as a “recapture amount”) equal to the outstanding balance of the deemed distribution tax recapture account for that pre-departure year at the end of the departure year; and (c) for the purposes of applying this Act at any time after the departure year, each of the outstanding balance of the deemed distribution tax recapture account at the end of the departure year, net GloBE income, jurisdictional adjusted covered taxes and substance-based income exclusion amount of the MNE group for the jurisdiction for a pre-departure year that is an adjustment year is deemed to be the amount determined without reference to this paragraph (referred to in this paragraph as “the amount otherwise determined”), minus the product obtained by multiplying the amount otherwise determined by the disposition recapture ratio of the departing constituent entity for the pre