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Pillar Two Rules now in force in Australia


At a glance

  • Australia has implemented the Pillar Two global and domestic minimum tax rules into domestic law.
  • The Australian Pillar Two rules apply to MNE Groups with consolidated annual revenue of at least EUR 750 million in at least two of the four fiscal years imediately preceding the test year, in line with the OECD Model Rules.
  • The Pillar Two rules have retrospective application to fiscal years starting on or after from 1 January 2024.
  • 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. 
  • How EY can help.

The Australian Government registered the Taxation Multinational Global and Domestic Minimum Tax Rules (the Rules) on 23 December 2024. This follows the enactment of the primary legislation which received Royal Assent on 10 December 2024. This finalises the implementation of the OECD’s Pillar Two global minimum tax solution in Australia. In-scope groups need to prepare for the financial reporting and compliance obligations that will be required because of this new law, including disclosures that may be required in the 31 December 2024 interim or annual financial statements.

The registration of the Rules follows public consultation of the Exposure Draft of the Rules (ED Rules) between March 2024 to May 2024. The Rules commence the day after they are registered, being 24 December 2024 and have retrospective application to fiscal years starting on or after 1 January 2024.

The Rules are largely in line with the OECD Model Rules. However, there have been some important changes made in the Rules as compared to the ED Rules, most notably the removal of the requirement to use local financial accounts for the purposes of calculating the Australian Domestic Minimum Tax (DMT) top-up tax liability. This Tax Alert sets out details of this change, along with other important changes in the final Rules. 

Download this tax alert