Singapore legislation
Regulation 89
Regulation 89
Deferred tax assets and liabilities must be taken into account in constituent entity’s adjusted covered taxes
Subregulation 1
For the purposes of paragraph 1(1)(d) of the First Schedule to the Act, each deferred tax asset or deferred tax liability reflected or disclosed in the financial accounts of a constituent entity of an MNE group as at the beginning of the transition year of the constituent entity (except for those arising from a blended CFC regime as defined in regulation 44(7)), must be taken into account in determining the adjusted covered tax of the constituent entity for the transition year and each subsequent financial year.
Subregulation 2
The following apply for the purposes of paragraph (1):
if the applicable domestic tax rate at which the deferred tax asset is reflected or disclosed in the financial accounts is less than the minimum rate and paragraph (3) does not apply, the deferred tax asset must be taken into account at that domestic tax rate;
if the applicable domestic tax rate at which the deferred tax liability is reflected or disclosed in the financial accounts is less than the minimum rate, the deferred tax liability must be taken into account at that domestic tax rate;
if the applicable domestic tax rate at which the deferred tax asset or deferred tax liability is reflected or disclosed in the financial accounts is equal to or greater than the minimum rate, the deferred tax asset or deferred tax liability must be taken into account at the minimum rate;
when taking into account the deferred tax asset, the impact of any valuation adjustment or accounting recognition adjustment with respect to the deferred tax asset must be excluded.
Subregulation 3
Where, in a case mentioned in paragraph (2)(a), the constituent entity is able to demonstrate that, had it been required to determine its GloBE income or loss for any year before the transition year under paragraph 6 of the First Schedule to the Act, the deferred tax asset would be attributable to a loss that is taken into account when determining that GloBE income or loss, then the deferred tax asset must be taken into account at the minimum rate.