Section 196

Such deferred tax assets and liabilities must be taken into account at the lower of the Minimum Rate or the applicable domestic tax rate.

A deferred tax asset that has been recorded at a rate lower than the Minimum Rate may be taken into account at the Minimum Rate if the taxpayer can demonstrate that the deferred tax asset is attributable to a GloBE Loss.

Finance (No. 2)

For the purposes of this section, the impact of any valuation adjustment, or accounting recognition adjustment with respect to a deferred tax asset shall be disregarded.

The Deferred tax assets arising from items excluded from the computation of GloBE Income or Loss under

Chapter 5 of this Part must be excluded from the computation under subsections (1) to (4) when such deferred tax assets are generated in a transaction that takes place after 30 November 2021.

In the case of a transfer of assets between

Constituent Entities after 30 November 2021 and before the commencement of a Transition Year, the basis in the acquired assets other than inventory shall be based upon the disposing Entity’s carrying value of the transferred assets upon disposition with the deferred tax assets and liabilities brought into GloBE Rules determined on that basis.

For the purposes of this section, “Transition Year”

means, for a jurisdiction, the first Financial Year that the

Multinational Enterprise Group comes within the scope of this Part in respect of that jurisdiction.

Transitional relief for the Substance-based Income Exclusion