Section 185

where the target Entity joins or leaves a Group or the target Entity becomes the Ultimate Parent Entity of a new Group, the target Entity will be treated as a member of the Group for the purposes of this

Part if any portion of its assets, liabilities, income, expenses or cash flows are included on a line-by-line basis in the Consolidated Financial Statements of the Ultimate Parent Entity in the acquisition year;

in the acquisition year, a Multinational Enterprise

Group shall take into account only the Financial

Accounting Net Income or Loss and Adjusted

Covered Taxes of the target Entity that are taken into account in the Consolidated Financial Statements of the Ultimate Parent Entity for the purposes of applying this Part;

in the acquisition year and each succeeding year, the target Entity shall determine its GloBE Income or

Loss and Adjusted Covered Taxes using its historical carrying value of the assets and liabilities;

the computation of the Eligible Payroll Costs of the target Entity under subsection 180(4) shall take into account only those costs reflected in the Consolidated

Financial Statements of the Ultimate Parent Entity;

the computation of carrying value of the Eligible

Tangible Assets of the target entity for the purposes of subsections 180(5) to (8) shall be adjusted proportionally to correspond with the length of the relevant Financial Year that the target Entity was a member of the Multinational Enterprise Group;

Act 851

with the exception of the GloBE Loss Deferred

Tax Asset, the deferred tax assets and deferred tax liabilities of a Constituent Entity that are transferred between Multinational Enterprise Groups shall be taken into account under this Part by the acquiring

Multinational Enterprise Group in the same manner and to the same extent as if the acquiring Multinational

Enterprise Group controlled the Constituent Entity when such assets and liabilities arose;

deferred tax liabilities of a target Entity that have previously been included in its Total Deferred Tax

Adjustment Amount shall be treated as reversed for the purpose of applying subsections 171(4) to (6)

by the disposing Multinational Enterprise Group and treated as arising in the acquisition year for the purpose of applying subsections 171(4) to (6)

by the acquiring Multinational Enterprise Group, except that in such cases any subsequent reduction to Covered Taxes under subsections 171(4) to (6)

shall have effect in the year in which the amount is recaptured; and

if the target Entity is a Parent Entity and it is a Group

Entity of two or more Multinational Enterprise Groups during the acquisition year, it shall apply separately the provisions of the Income Inclusion Rule to its

Allocable Shares of the Multinational Top-up Tax of Low-Taxed Constituent Entities determined for each Multinational Enterprise Group.

For the purposes of this Part, the acquisition or disposal of a Controlling Interest in a Constituent Entity will be treated as an acquisition or disposal of the assets and liabilities if the jurisdiction in which the target Constituent

Entity is located, or in the case of a Tax Transparent Entity, the jurisdiction in which the assets are located, treats the acquisition or disposal of that Controlling Interest in the same or similar manner as an acquisition or disposition of the assets and liabilities and imposes a Covered Tax on the seller based on the difference between their tax basis and the consideration paid in exchange for the Controlling Interest or the fair value of the assets and liabilities.

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Transfer of assets and liabilities