Document ID: chunk:federal_register_of_legislation:F2024L01740:front:0:p56
Version: federal_register_of_legislation:F2024L01740
Segment Type: other
Provision Reference: 
Character Range: 141219–144001

Excess Negative Tax Expense Carry‑forward may also be increased under section 5‑10.

Election
 (4) A Filing Constituent Entity for an MNE Group may make an election for the MNE Group under this subsection that applies to a specified jurisdiction.
 (5) An election under subsection (4) is an Annual Election.

Part 4‑2—Definition of Covered Taxes

4‑40  Meaning of Covered Taxes
 (1) The Covered Taxes of a Constituent Entity of a Group means:
 (a) Taxes recorded in the financial accounts of the Constituent Entity in respect of:
 (i) its income or profits; or
 (ii) its share of the income or profits of a Constituent Entity of the Group, in which it holds an Ownership Interest; and
 (b) Taxes on distributed profits, deemed profit distributions and non‑business expenses imposed under an Eligible Distribution Tax System; and
 (c) Taxes imposed in lieu of a generally applicable corporate income tax; and
 (d) Taxes levied by reference to retained earnings and corporate equity, including a Tax on multiple components based on income and equity.
 (2) Despite subsection (1), Covered Taxes does not include any amount of the following:
 (a) Top‑up Tax accrued by a Parent Entity under a Qualified IIR;
 (b) Top‑up Tax accrued by a Constituent Entity under a Qualified Domestic Minimum Top‑up Tax;
 (c) any Tax under or as a result of the application of a Qualified UTPR;
 (d) a Disqualified Refundable Imputation Tax;
 (e) Taxes paid or accrued by an insurance company in respect of returns to policyholders.

Part 4‑3—Allocation of Covered Taxes from one Constituent Entity to another Constituent Entity

4‑45  Allocation of amounts from Constituent Entity to Permanent Establishment—general rule
  An amount in respect of Covered Taxes for a Fiscal Year is allocated from a Constituent Entity of an MNE Group (the Main Entity) to a Permanent Establishment, if the amount is:
 (a) accrued in the financial accounts of the Main Entity, or of another Constituent Entity, for the Fiscal Year; and
 (b) so accrued in respect of the GloBE Income or Loss of the Permanent Establishment for the Fiscal Year.

4‑50  Allocation of amounts from Tax Transparent Entity to a Constituent Entity‑owner of the Tax Transparent Entity
  An amount in respect of Covered Taxes for a Fiscal Year is allocated from a Constituent Entity that is a Tax Transparent Entity to a Constituent Entity‑owner of the Tax Transparent Entity if the amount is:
 (a) accrued in the financial accounts of the Tax Transparent Entity for the Fiscal Year; and
 (b) so accrued in respect of the GloBE Income or Loss allocated to the Constituent Entity‑owner under paragraph 3‑255(1)(c).

4‑55  Allocation of amounts from Constituent Entity‑owner to CFC
 (1) An amount in respect of Covered Taxes for a Fiscal Year is