The Australian Taxation Office (ATO) has shared key consultation feedback and findings regarding the implementation of the OECD/G20 Two Pillar Solution in Australia on 24 June 2024. It expects to complete the development of the necessary mechanisms for Pillar Two GloBe rules by 30 June, 2026.
On 24 June 2024, the ATO issued guidance on implementing the OECD/G20 Two Pillar Solution, also known as the Global and Domestic Minimum Tax, for multinational businesses in Australia.
The main consultation feedback and findings include:
- Varying degrees of readiness for when the rules start;
- Significant compliance challenges the GloBE Rules pose;
- Potential technical difficulties in capturing the data points the GloBE Information Return (GIR) requires.
The feedback received so far indicates that for many MNE Groups:
- The data points needed for the GIR are extensive and may require system changes or manual interventions;
- Given the system updates needed, one key challenge for businesses is the amount of time and resources required to set up their systems to meet their obligations.
Stakeholders raised a variety of topics about our administration and interpretation of the GloBE Rules, when enacted, including:
- Potential application of penalties;
- Safe harbours, with several consultees indicated there will likely be significant reliance on safe harbours, developed by the OECD/G20 Inclusive Framework on BEPS;
- Interpretation questions relating to potential Australian income tax regime interactions.