The legislative instrument takes effect on 27 August 2025 and remains applicable until 1 April 2035.

The Australian Official Gazette has published a legislative instrument “Taxation (Multinational-Global and Domestic Minimum Tax) (Qualified GloBE Taxes) Determination 2025” on 26 August 2025. This instrument outlines jurisdictions that:

  1. Impose a tax under an income inclusion rule (IIR),
  2. Impose a qualified domestic minimum top-up tax (QDMTT), and
  3. Have acquired QDMTT safe harbor status for fiscal years starting on or after the specified date.

The instrument takes effect on 27 August 2025 and remains applicable until 1 April 2035.

Australia has implemented the Global Anti-Base Erosion Model Rules (GloBE Rules) by introducing a global and domestic minimum tax.

The GloBE Rules establish a coordinated system of taxation designed to ensure that multinational enterprise groups (MNE groups) are subject to a global minimum tax rate of 15% in each jurisdiction where they operate. They are a key part of the Organisation for Economic Co-operation and Development (OECD)/G20 Two-Pillar Solution, to address the tax challenges arising from the digitalisation of the economy.

The global and domestic minimum tax consists of:

  • The Income Inclusion Rule (IIR) – acts as the primary rule, which broadly allows Australia to apply a top-up tax on multinational parent entities located in Australia if the group’s effective tax rate in another jurisdiction is below 15%
  • The Undertaxed Profits Rule (UTPR) acts as a backstop rule, which allows Australia to apply a top-up tax on constituent entities located in Australia if the group’s effective tax rate in another jurisdiction is below 15% and where the profit is not brought into charge under an IIR.
  • A domestic minimum tax, which operates consistently with the GloBE Rules and provides Australia the ability to claim primary rights to impose top-up tax over any low-taxed profits in Australia, in priority over the IIR and UTPR.

The IIR and the domestic minimum tax will apply to fiscal years commencing on or after 1 January 2024. The UTPR will apply to fiscal years starting on or after 1 January 2025.