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- The ATO have updated their website guidance on administration of Australia’s Pillar Two global and domestic minimum tax rules.
- Australia’s Pillar Two rules are in force and have retrospective application to fiscal years starting on or after 1 January 2024.
- The ATO updates include guidance on lodging, paying and record keeping requirements for Pillar Two, and how Australia’s corporate tax system interacts with Pillar Two.
- In-scope groups need to prepare for the financial reporting and compliance obligations that will be required under the new domestic and global minimum tax.
On 16 May 2025, the Australian Taxation Office (ATO) updated its online guidance regarding the Pillar Two global and domestic minimum taxes. This Tax Alert outlines the key updates to the ATO guidance, as well as the relevance of these updates to the compliance obligations arising from Australia’s Pillar Two rules.
The ATO has the role of administering and ensuring compliance with the Pillar Two rules, whilst Treasury is responsible for the design and development of the legislation, as well as making updates to maintain alignment with the OECD Model Rules.
The ATO has enhanced several online resources to provide insights into various administrative issues. Whilst this guidance does not form part of the formal legislative framework, it provides detailed information on how the ATO will administer the Pillar Two rules including potential amendments to the legislation, issuance of Private Binding Rulings, lodgement and record keeping requirements and the interaction with Australia’s existing corporate tax framework.
The Australian Pillar Two rules apply to multinational enterprise groups (MNE Groups) with annual revenue of EUR 750 million or more in the Consolidated Financial Statements of the Ultimate Parent Entity (UPE) in at least 2 of the 4 fiscal years preceding the test year, consistent with the OECD Model Rules.
The new guidance published by the ATO marks a significant step forward in the implementation of the compliance framework for Pillar Two. Australian-based and global groups with a presence in Australia need to act now to understand the impact of Pillar Two on their organisation and prepare for the new lodgment, payment, and record-keeping requirements, given the significant penalties for non-compliance.