5‑65 Tangible Asset Carve‑out Amount5‑65 Tangible Asset Carve‑out Amount

5‑65 Tangible Asset Carve‑out Amount

(1) The Tangible Asset Carve‑out Amount for a Constituent Entity of an MNE Group located in a jurisdiction, for a Fiscal Year, is computed as follows: (a) first, compute the total amount of the carrying values for the Fiscal Year of each Eligible Tangible Asset of the Constituent Entity; (b) next, exclude from the result of paragraph (a) amounts to the extent they are the carrying value of property (including land or buildings) that is held for sale, lease or investment; (c) next, multiply the result of paragraph (b) by 5%.

Note: For paragraph (b), do not exclude certain amounts if the property held for lease is subject to an operating lease, or an intragroup lease that is a finance lease: see section 5‑70.

(2) For the purposes of paragraph (1)(a): (a) compute the carrying value of an Eligible Tangible Asset of the Constituent Entity for the Fiscal Year: (i) based on the average of the carrying value of the Eligible Tangible Asset at the beginning and ending of the Fiscal Year as recorded for the purposes of preparing the Consolidated Financial Statements of the Ultimate Parent Entity of the MNE Group for the Fiscal Year; and (ii) net of accumulated depreciation, amortisation, or depletion or impairment loss; and (b) apply the rules in subsection (3) in computing each carrying value mentioned in subparagraph (a)(i) of this subsection. (3) For the purposes of paragraph (2)(b), the rules are as follows: (a) include any amount attributable to capitalisation of payroll expense; (b) include any amount attributable to any purchase accounting adjustment relating to the asset; (c) include any impairment loss; (d) include so much of the reversal of a previous impairment loss as does not cause the carrying value to exceed the value it would have been had the impairment loss not been recognised; (e) disregard any increase in the value of the Eligible Tangible Asset, and any subsequent incremental increase in depreciation, resulting from revaluation when applying the revaluation model; (f) if, in the Fiscal Year, the Eligible Tangible Asset is located in the jurisdiction mentioned in paragraph (1)(a) for a proportion of the Fiscal Year that is 50% or less—reduce the carrying value by multiplying it by that proportion; (g) if the Eligible Tangible Asset is used in the generation of the Constituent Entity’s Qualified Ancillary International Shipping Income for the Fiscal Year—reduce the carrying value by multiplying it by the proportion computed in accordance with the following formula: Start formula 1 minus start fraction Cap over Aggregate AISI end fraction end formula where Aggregate AISI and Cap have the same meanings as in subsection 3‑230(1). (4) For the purposes of paragraph (1)(a), if a Filing Constituent Entity for an MNE Group chooses, under subsection (5), to exclude to a certain extent the carrying values of certain Eligible Tangible Assets from the computation of the total amount mentioned in that paragraph, exclude those carrying values to that extent in computing that total amount. (5) For the purposes of subsection (4), a Filing Constituent Entity for an MNE Group may choose to exclude to a specified extent the carrying values of specified Eligible Tangible Assets from the computation of the total amount mentioned paragraph (1)(a) by excluding relevant amounts from the MNE Group’s GloBE Information Return for the Fiscal Year.