Taxation (Multinational—Global and Domestic Minimum Tax) Rules 2024
5‑5 Meaning of Effective Tax Rate5‑5 Meaning of Effective Tax Rate
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5‑5 Meaning of Effective Tax Rate
(1) Subsection (2) applies in relation to an MNE Group for a jurisdiction for a Fiscal Year if it has Net GloBE Income for the jurisdiction for the Fiscal Year. (2) The Effective Tax Rate of the MNE Group for the jurisdiction for the Fiscal Year is equal to: (a) the sum of the Adjusted Covered Taxes for the Fiscal Year of each Constituent Entity of the MNE Group located in the jurisdiction; divided by: (b) the Net GloBE Income of the MNE Group for the jurisdiction for the Fiscal Year; expressed as a percentage.
Note: The sum of the Adjusted Covered Taxes for the Fiscal Year of each Constituent Entity of the MNE Group located in the jurisdiction may be modified by subsection 5‑10(2) or 7‑50(2) or paragraph 7‑65(a).
(3) Subsection (4) applies if: (a) the sum of the Adjusted Covered Taxes mentioned in paragraph (2)(a) exceeds zero; and (b) there is an Excess Negative Tax Expense Carry‑forward for the MNE Group for the jurisdiction with a balance that exceeds zero. (4) For the purposes of subsection (2), apply that balance to reduce the sum of the Adjusted Covered Taxes mentioned in paragraph (2)(a) (but not below zero). (5) Reduce the balance of the Excess Negative Tax Expense Carry‑forward to the extent that it is applied under subsection (4).