Document ID: chunk:federal_register_of_legislation:F2024L01740:front:0:p27
Version: federal_register_of_legislation:F2024L01740
Segment Type: other
Provision Reference: 
Character Range: 68539–71449

included in the Constituent Entity's taxable income or loss).
 (3) In computing the Constituent Entity's GloBE Income or Loss for the Fiscal Year, adjust the Constituent Entity's Financial Accounting Net Income or Loss for the Fiscal Year so as to exclude a particular amount of income or loss to the extent that:
 (a) the particular amount is:
 (i) attributable to fluctuations in the exchange rate between the accounting functional currency and tax functional currency; and
 (ii) included in the Constituent Entity's Financial Accounting Net Income or Loss for the Fiscal Year; and
 (iii) not included in computing the Constituent Entity's taxable income or loss; or
 (b) the particular amount is:
 (i) attributable to fluctuations in the exchange rate between the accounting functional currency and another currency that is not the tax functional currency; and
 (ii) included in the Constituent Entity's Financial Accounting Net Income or Loss for the Fiscal Year; and
 (iii) not included in computing the Constituent Entity's taxable income or loss.
 (4) To avoid doubt, disregard the operation of subsections (2) and (3) in determining whether the condition in subparagraph (2)(a)(iii) or (b)(ii) or (3)(a)(ii) or (b)(ii) is met.

3‑60  Meaning of tax functional currency and accounting functional currency
 (1) A Constituent Entity's tax functional currency for a Fiscal Year is the functional currency used to compute the Constituent Entity's taxable income or loss for the Fiscal Year for a Covered Tax:
 (a) unless paragraph (b) applies—in the jurisdiction in which it is located; or
 (b) if the Constituent Entity is a Stateless Constituent Entity—in the jurisdiction in which it is created.
 (2) A Constituent Entity's accounting functional currency for a Fiscal Year is the functional currency used to compute the Constituent Entity's Financial Accounting Net Income or Loss for the Fiscal Year.

3‑65  Adjustment—policy disallowed expenses
  In computing a Constituent Entity's GloBE Income or Loss for a Fiscal Year, adjust the Constituent Entity's Financial Accounting Net Income or Loss for the Fiscal Year so as to exclude the following:
 (a) expenses accrued by the Constituent Entity for illegal payments, including bribes and kickbacks;
 (b) expenses accrued by the Constituent Entity for a fine or penalty that equals or exceeds 50,000 Euros (or an equivalent in the Constituent Entity's accounting functional currency for the Fiscal Year);
 (c) expenses accrued by the Constituent Entity for fines and penalties that are levied in respect of the same activity on a periodic basis (such as daily fines), the total of which equals or exceeds 50,000 Euros (or an equivalent in the Constituent Entity's accounting functional currency for the Fiscal Year).

3‑70  Adjustment—prior period errors and changes in accounting principles
 (1) Subsection (2) applies if there has been a change in the