Document ID: chunk:federal_register_of_legislation:F2024L01740:front:0:p60
Version: federal_register_of_legislation:F2024L01740
Segment Type: other
Provision Reference: 
Character Range: 151265–154070

allocated to the Constituent Entity falls short of what it would be disregarding subsection (1), do not allocate the shortfall to the Constituent Entity under sections 4‑55 or 4‑65.

4‑80  Allocation of amounts from Permanent Establishment to Main Entity
 (1) This section applies if subsection 3‑250(2) (Allocation of GloBE Loss from Permanent Establishment to Main Entity) applies in relation to a Permanent Establishment and the Main Entity in respect of the Permanent Establishment.
 (2) In computing the Adjusted Covered Taxes of the Permanent Establishment and the Main Entity, disregard a deferred tax asset if:
 (a) it is attributable to a tax loss arising in the jurisdiction in which the Permanent Establishment is located; and
 (b) the loss is treated as an expense of the Main Entity under paragraph 3‑250(2)(a).
 (3) If:
 (a) an amount is treated as GloBE Income of the Main Entity in respect of a Permanent Establishment under paragraph 3‑250(2)(b); and
 (b) Covered Taxes arise in the jurisdiction in which the Permanent Establishment is located, and are associated with the income amount mentioned in that paragraph;
treat those Covered Taxes as Covered Taxes of the Main Entity (but not beyond the amount computed by multiplying that income by the highest corporate tax rate on ordinary income in the jurisdiction where the Main Entity is located).

Part 4‑4—Mechanism to address temporary differences
Note: The Total Deferred Tax Adjustment Amount is added to Adjusted Covered Taxes under paragraph 4‑5(b).

4‑85  Meaning of Total Deferred Tax Adjustment Amount
 (1) Subject to the following subsections, the Total Deferred Tax Adjustment Amount for a Constituent Entity for a Fiscal Year is equal to:
 (a) if the applicable domestic tax rate is below the Minimum Rate—the deferred tax expense accrued in its financial accounts, to the extent that:
 (i) it is in respect of Covered Taxes for the Fiscal Year (the relevant deferred tax expense); and
 (ii) it relates to amounts included in the computation of the Constituent Entity's GloBE Income for the Fiscal Year; or
 (b) otherwise—that deferred tax expense, to that extent, recast at the Minimum Rate.
 (2) That Total Deferred Tax Adjustment Amount does not include any of the following:
 (a) the amount of the relevant deferred tax expense that is in respect of items excluded from the computation of GloBE Income or Loss under Chapter 3;
 (b) the amount of the relevant deferred tax expense that is in respect of Disallowed Accruals and Unclaimed Accruals;
 (c) the impact of a valuation adjustment or accounting recognition adjustment with respect to a deferred tax asset;
 (d) the amount of the relevant deferred tax expense that arises from a re‑measurement with respect to a change in the applicable domestic tax rate;
 (e) the