Document ID: chunk:federal_register_of_legislation:F2024L01740:front:0:p63
Version: federal_register_of_legislation:F2024L01740
Segment Type: other
Provision Reference: 
Character Range: 158797–161631

of a Constituent Entity of an MNE Group;
 (b) the Constituent Entity is taxed on the foreign source income under a Controlled Foreign Company Tax Regime.

4‑100  Effect of Recaptured Deferred Tax Liability
  If there is Recaptured Deferred Tax Liability for a Constituent Entity of an MNE Group located in a jurisdiction for a Fiscal Year:
 (a) for the purposes of section 4‑20, treat the amount of the Recaptured Deferred Tax Liability as increasing the Reduction to Covered Taxes of the Constituent Entity for the fifth preceding Fiscal Year; and
 (b) recalculate the Effective Tax Rate and Jurisdictional Top‑up Tax of the MNE Group for the jurisdiction for the fifth preceding Fiscal Year in accordance with section 5‑95.

4‑105  Meaning of Recaptured Deferred Tax Liability
  The Recaptured Deferred Tax Liability for a Constituent Entity for a Fiscal Year is the amount of a deferred tax liability, to the extent that the deferred tax liability:
 (a) was included in the Total Deferred Tax Adjustment Amount for the Constituent Entity for the fifth preceding Fiscal Year; and
 (b) has not reversed by the end of the last day of the Fiscal Year; and
 (c) does not relate to a Recapture Exception Accrual.

4‑110  Meaning of Recapture Exception Accrual
  A Recapture Exception Accrual means a tax expense accrued in the financial accounts of a Constituent Entity attributable to changes in associated deferred tax liabilities, in respect of any of the following:
 (a) cost recovery allowances on tangible assets;
 (b) the cost of a licence or similar arrangement from a government for the use of immovable property or exploitation of natural resources that entails significant investment in tangible assets;
 (c) research and development expenses;
 (d) de‑commissioning and remediation expenses;
 (e) fair value accounting on unrealised net gains;
 (f) foreign currency exchange net gains;
 (g) insurance reserves and insurance policy deferred acquisition costs;
 (h) a gain that is:
 (i) from the sale of tangible property located in the jurisdiction in which the Constituent Entity is located; and
 (ii) reinvested in tangible property in that jurisdiction;
 (i) an additional amount accrued as a result of accounting principle changes with respect to a matter mentioned in any of paragraphs (a) to (h).

4‑115  Meaning of Disallowed Accrual and Unclaimed Accrual
 (1) A Disallowed Accrual, of a Constituent Entity of an MNE Group for a Fiscal Year, means a movement in deferred tax expense accrued in the financial accounts of the Constituent Entity for the Fiscal Year that relates to:
 (a) an uncertain tax position; or
 (b) distributions from any Constituent Entity of the MNE Group (whether or not the Constituent Entity mentioned previously in this subsection).
 (2) An Unclaimed Accrual, of a Constituent Entity of an MNE