The total Deferred Tax Adjustment Amount for the CE in the Tax Period shall be equal to the Deferred Tax Expenses recognized in the financial accounts related to the Covered Taxes for that Tax Period, if the applied tax rate is less than the minimum tax.
If the applied tax rate is higher than the minimum tax, the Deferred Tax Expenses shall be adjusted to be calculated based on the minimum tax.
The total Deferred Tax Adjustment amount for a CE in the Tax Period excludes the following items:
Deferred Tax Expenses related to items excluded from the calculation of GloBE Income or Loss according to Chapter 3 of these ERs.
Deferred Tax Expenses related to Disallowed Accruals and Unclaimed Accruals.
The effect of revaluation or adjustment in accounting recognition of a DTA.
Deferred Tax Expenses arising from a re-measurement with respect to a change in the applicable domestic tax rate in the State.
Deferred tax expenses related to the creation and use of tax credits.
Clause (5) does not apply to foreign tax credits that create DTAs arising from loss carryforwards.
The total Deferred Tax Adjustment amount shall be adjusted as per the following items:
Increased by the amount of any Disallowed Accrual or Unclaimed Accrual paid during the Tax Period;
Increased by the amount resulting from any Recaptured DTL determined in a previous Tax Period and paid during the Tax Period; and
Reduced by the amount that would have been considered a reduction in the total Deferred Tax Adjustment amount due to recognition of a DTA loss as a tax loss for the current Tax Period, if the DTA loss was not recognized due to failure to meet accounting recognition criteria.
If the Taxpayer proves that the DTA recorded at a rate lower than the minimum tax relates to a GloBE Loss, the DTA may be adjusted to the minimum tax rate in the Tax Period in which it was recorded. The total deferred tax adjustment amount shall be decreased by the amount of the DTA increase due to the provisions of this Article.
If a DTL is calculated and it does not qualify as a “recaptured excluded accrual” and remains unpaid for five subsequent Tax Periods, that amount must be recovered in accordance with the provisions of this Article.