Chapter 6 - Tax Computation
Article 52 - Excess Negative Tax Expense Procedure
On making an election in accordance with Paragraph A of Article 51 of these Regulations, or where the Additional Tax Rate for a jurisdiction for a Fiscal Year exceeds the Minimum Rate, a Filing Constituent Entity shall exclude the Excess Negative Tax Expense from its Adjusted Covered Taxes in respect of a Fiscal Year and, instead, establish an Excess Negative Tax Expense Carry-forward for that Multinational Enterprise Group of an amount equal to the excluded amount.
For the purposes of Paragraph A of this Article, Excess Negative Tax Expense means any of the following:
For a Filing Constituent Entity that makes an election under Paragraph A of this Article, an amount equal to the Additional Tax for Permanent Differences for that Fiscal Year.
For a Filing Constituent Entity that has an Additional Tax Rate for a Fiscal Year that exceeds the Minimum Rate, an amount equal to the negative Adjusted Covered Taxes for that Fiscal Year.
In each Fiscal Year following a Fiscal Year in respect of which Paragraph A of this Article applies, where a Filing Constituent Entity has Net Constituent Entity Income and Adjusted Covered Taxes in the Kingdom, the Filing Constituent Entity shall apply all of the following:
Reduce the Adjusted Covered Taxes for the jurisdiction by the balance of the Excess Negative Tax Expense Carry-forward, but the amount of the Adjusted Covered Taxes after such reduction shall not be less than zero.
Reduce the balance of the Excess Negative Tax Expense Carry-forward by the same amount.
Where a Multinational Enterprise Group disposes of one or more of the Constituent Entities located in the Kingdom in respect of which an election under Paragraph A of this Article has been made, the Excess Negative Tax Expense Carry-forward shall remain an attribute of that Multinational Enterprise Group.
Where a Multinational Enterprise Group disposes of all Constituent Entities located in the Kingdom and re-acquires or establishes Constituent Entities located in the Kingdom in a subsequent Fiscal Year, the balance of the Excess Negative Tax Expense Carry-forward shall be taken into account in determining the Adjusted Covered Taxes for the Kingdom beginning with that Fiscal Year.