The Relationship between the Global Minimum Tax (Top-up Tax) and Deferred Tax

This master's thesis examines the relationship between the Global Minimum Tax (Top-up Tax) and deferred tax under IFRS. The primary objective is to analyse the impact of deferred tax on the calculation of the Global Minimum Tax (Pillar Two), evaluate the implications of the OECD rules for deferred tax reporting in light of the 2023 amendment to IAS 12, and demonstrate the methodology for mandatory deferred tax adjustments used to determine the Effective Tax Rate (ETR) and the subsequent calculation of the Top-up Tax through a comprehensive model example. The thesis provides a detailed analysis of the mechanisms for recasting deferred tax balances to the 15% minimum tax rate, the treatment of tax losses, and the application of the specific Five-Year Recapture Rule. Using a simulation of a fictitious multinational enterprise (MNE) group, the practical part demonstrates that a Top-up Tax liability may arise even in jurisdictions with high statutory tax rates as a result of temporary differences related to intangible assets. The findings highlight the necessity of maintaining parallel deferred tax records and identify the strategic importance of the GloBE Loss Election in ensuring the stability of an entity's tax position.