At the election of the filing constituent entity, the amount of stock-based compensation expense that has been allowed as a deduction for tax purposes by a constituent entity for a fiscal year may be deducted from the financial accounting net income or loss of that constituent entity for the computation of its qualifying income or loss for the same fiscal year.

Where the option to use the stock-options has not been exercised, the amount of stock-based compensation expense that has been deducted from the financial accounting net income or loss of the constituent entity for the computation of its qualifying income or loss for a fiscal year shall be added back in the fiscal year in which the option has expired.

Where part of the amount of stock-based compensation expense has been accrued in the financial accounts of the constituent entity in fiscal years prior to the fiscal year in which the election is made, an amount equal to the difference between the total amount of stock-based compensation expense that has been deducted for the computation of its qualifying income or loss in those previous fiscal years and the total amount of stock-based compensation expense that would have been deducted for the computation of its qualifying income or loss in those previous fiscal years if the election had been made in such fiscal years, shall be included in the computation of the qualifying income or loss of the constituent entity for that fiscal year.

The election shall be made in accordance with Article 43, Paragraph 1 of the EU Directive and shall apply consistently to all constituent entities located in the same jurisdiction for the year in which the election is made and all subsequent fiscal years.

In the fiscal year in which the election is revoked, the amount of unpaid stock-based compensation expense that exceeds the financial accounting expense accrued shall be included for the computation of the qualifying income or loss of the constituent entity.

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