9‑5 Pre‑Transition Year deferred tax ass9‑5 Pre‑Transition Year deferred tax assets and liabilities

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.