On 11 August 2023, the Australian Taxation Office (ATO) officially initiated targeted public consultation regarding the adoption of Pillar 2 global minimum tax rules. Consultation is being undertaken in a phased approach:

  • Phase 1 with industry groups and their members (July – August 2023).
  • Phase 2 with mid-tier firms (August – October 2023).
  • Phase 3 with large advisory firms (September – November 2023).

The 15% global minimum tax and 15% domestic minimum tax will apply to large multinationals with annual global revenue of EUR750 million (approximately $1.2 billion) or more. This measure is not yet law and new legislation will be introduced.

In scope multinational groups will need to:

  • provide new information to adhere to the reporting obligations under the global minimum tax and domestic minimum tax (this may require new systems)
  • lodge a GloBE Information Return (GIR)
    • the GIR will need to be lodged 18 months after the first-year end (15 months for subsequent years).
    • the OECD have published GIR requirements.

The start dates for the:

a) 15% global minimum tax for large multinational enterprises will occur over two years with the

    1. Income Inclusion Rule to apply to income years starting on or after 1 January 2024, and
    2. Undertaxed Profits Rule to apply to income years starting on or after 1 January 2025.

b) 15% domestic minimum tax to apply to income years starting on or after 1 January 2024.