The adjusted Covered Taxes for a CE to be determined for the Tax Period shall be equal to the current tax expense accrued in its FANIL with respect to covered taxes for that period, and adjusted as follows:
Net amount of additions in Covered Taxes during the Tax Period according to provisions of Article 35 of these ERs, and the reductions of covered taxes during the Tax Period according to provisions of Article 36 of these ERs;
Total amount of Deferred Tax adjustments according to Article 38 of these ERs; and
Any increase or decrease in Covered Taxes recorded in equity or Other Comprehensive Income related to amounts included in the GloBE Income or Loss subject to income tax under local tax legislation.
No amount of covered taxes shall be counted more than once.
If the adjusted covered taxes in the country are less than zero and less than the Expected Adjusted Covered Taxes in a Tax Period with no GloBE net income in the State, CEs in the State are treated as having Additional Current Top-Up Tax in the State according to the Article 47 of these ERs, arising in the current Tax Period, equal to the difference between these two amounts.
The expected adjusted covered taxes amount is calculated using the following formula:
Expected Adjusted Covered Taxes = GloBE Income or Loss in the State × Minimum Tax Rate
The DCE may elect a Tax Period to replace the Additional Current Top-Up Tax referenced in Article 47 of these ERs with an Excess Negative Tax Expense carried forward to a later period, subject to the following: