Identifying covered taxes
The June 2026 slides include qualifying profit taxes and specified substitute taxes, but exclude VAT, payroll, property and transaction taxes as well as top-up taxes themselves. Current tax not expected to be paid within the prescribed three-year period is excluded. Deferred tax is adjusted for excluded income, recognition or valuation changes and other specified items, with rates above 15% recast to the minimum and qualifying GloBE-loss assets subject to their own recast. Do not use the financial-statement tax expense without this reconciliation.
Monitoring deferred liabilities
A counted deferred-tax liability not reversed by the end of the fifth financial year after its initial year can be recaptured, except for defined excluded liabilities. This requires recalculating the original jurisdictional ETR and top-up amount. The slides describe item, general-ledger and aggregate-category tracking, with conditions for FIFO or LIFO and unclaimed-accrual elections. Record the original year, eligible exception, reversal pattern and election consistently: recapture is not simply a current-year accounting journal adjustment.
Official source
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