7‑55 Deemed Distribution Tax Recapture A7‑55 Deemed Distribution Tax Recapture Account

7‑55 Deemed Distribution Tax Recapture Account

(1) This section applies if, at the end of a Fiscal Year (the current year), there are one or more Deemed Distribution Tax Recapture Accounts for a jurisdiction for an MNE Group for earlier Fiscal Years. (2) At the end of the current year, reduce the balance of the Deemed Distribution Tax Recapture Accounts in accordance with the following subsections. (3) Make reductions under subsection (4) to the balance of a Deemed Distribution Tax Recapture Account for an earlier Fiscal Year before making a reduction under subsection (4) to the balance of a Deemed Distribution Tax Recapture Account for a later Fiscal Year. (4) Reduce the balance of a Deemed Distribution Tax Recapture Account by applying amounts mentioned in paragraphs (a), (b) and (c) as follows: (a) first, reduce that balance by applying the amount of Taxes mentioned in paragraph 4‑40(1)(b) paid by the Constituent Entities of the MNE Group located in the jurisdiction during the current year in relation to actual or deemed distributions; (b) next, reduce that balance by applying the amount that is: (i) the Net GloBE Loss (if any) for the current year of the MNE Group for the jurisdiction; multiplied by: (ii) the Minimum Rate; (c) next, if there are one or more Recapture Account Loss Carry‑forwards for the jurisdiction for the MNE Group for earlier Fiscal Years, reduce that balance by applying the amount of those Recapture Account Loss Carry‑forwards. (5) However, do not apply an amount mentioned in paragraph (4)(a), (b) or (c) to the extent that doing so would reduce the balance of the Deemed Distribution Tax Recapture Account below zero. (6) For the purposes of paragraph (4)(c), apply an amount of a Recapture Account Loss Carry‑forward for an earlier Fiscal Year before applying an amount of a Recapture Account Loss Carry‑forward for a later Fiscal Year.