Australia’s Treasurer Jim Chalmers announced on 4 July, 2024, the introduction of legislation in parliament aimed at implementing the Pillar Two global minimum tax. Introduced by the Albanese Government, the legislation ensures multinational companies pay a fairer share of tax in Australia.
The new laws will set a 15% global minimum tax and domestic minimum tax for all multinational enterprise groups with an annual global revenue of at least EUR 750 million (approximately AUD 1.2 billion) effective from 1 January, 2024.
These measures bring Australia in line with many other nations, including the biggest economies in the world, which are all cracking down on multinationals to ensure they pay a fairer share of tax.
The legislation includes:
- Imposition Bill: Taxation (Multinational—Global and Domestic Minimum Tax) Imposition Bill 2024 which enforces additional taxes, specifically the Australian Domestic Minimum Tax (DMT), the Australian Income Inclusion Rule (IIR) tax, and the Australian Undertaxed Profits Rule (UTPR) tax.
- Assessment Bill: Taxation (Multinational—Global and Domestic Minimum Tax) Bill 2024 establishes the framework for imposing top-up taxes for the DMT, IIR, and UTPR in alignment with the Pillar 2 GloBE Rules.
- Consequential Bill: Treasury Laws Amendment (Multinational— Global and Domestic Minimum Tax) (Consequential) Bill 2024 includes essential and related provisions required for administering top-up tax in alignment with the current administrative framework under Australian tax law and the PIllar Two GloBE Rules.
This legislation delivers on the Albanese Government’s 2023–24 Budget announcement to implement the minimum taxes under Pillar Two of the OECD/G20 Two Pillar Solution, a multilateral agreement supported by more than 140 nations.
The Australian DMT and IIR taxes will take effect for fiscal years starting on or after 1 January, 2024. The Australian UTPR tax will be applicable for fiscal years commencing on or after 1 January, 2025.
