Document ID: chunk:federal_register_of_legislation:F2024L01740:front:0:p135
Version: federal_register_of_legislation:F2024L01740
Segment Type: other
Provision Reference: 
Character Range: 339117–341787

Year of the MNE Group that is located in the UPE jurisdiction;
 (b) if there are one or more Joint Ventures of the MNE Group—the Ultimate Parent Entity's Allocable Share of the Top‑up Tax of each Joint Venture, and of each of its JV Subsidiaries (if any), that is located in the UPE jurisdiction.

Election
 (3) A Filing Constituent Entity for an MNE Group may make an election for the MNE Group under this subsection that applies to the Fiscal Year and the UPE jurisdiction if:
 (a) the Fiscal Year:
 (i) does not exceed 12 months; and
 (ii) starts on or before 31 December 2025; and
 (iii) ends before 31 December 2026; and
 (b) the UPE jurisdiction has a corporate income tax that applies at a rate of at least 20%.
 (4) An election under subsection (3) is an Annual Election.

Chapter 9—Transition rules

Part 9‑1—Tax attributes upon transition

9‑5  Pre‑Transition Year deferred tax assets and liabilities
 (1) This section applies for the purposes of computing the Total Deferred Tax Adjustment Amount, for a Constituent Entity of an MNE Group located in a jurisdiction, for a Fiscal Year (the current year) that is:
 (a) the MNE Group's Transition Year for the jurisdiction; or
 (b) a subsequent Fiscal Year, if the Constituent Entity has not ceased to be a Constituent Entity of the MNE Group in the intervening period.
 (2) In computing the Constituent Entity's Total Deferred Tax Adjustment Amount for the current year, despite subsections 4‑85(2), (3), (4) and (5):
 (a) take account of each deferred tax asset and deferred tax liability that is reflected or disclosed in the Constituent Entity's financial accounts at the beginning of the Transition Year; and
 (b) take account of the deferred tax asset or deferred tax liability in the amount set out in section 9‑10.
 (3) Subsection (2) does not apply in relation to a deferred tax asset that arises:
 (a) as a result of a transaction that occurs in the period that:
 (i) starts on 1 December 2021; and
 (ii) ends immediately before the start of the Transition Year; and
 (b) in respect of an amount that:
 (i) is not included in the Constituent Entity's taxable income for a Fiscal Year; and
 (ii) assuming the amount arose in the Transition Year, would not have been taken into account in computing the Constituent Entity's GloBE Income or Loss for the Transition Year.
 (4) If the Constituent Entity has a Recaptured Deferred Tax Liability for the current year under section 4‑105 in respect of a deferred tax liability mentioned in paragraph (2)(a) of this section, section 4‑100 does not apply in relation to that Recaptured Deferred Tax Liability.

9‑10  Pre‑Transition Year deferred tax assets and