Australian Taxation Office releases new Pillar Two website guidance and announces lodgment deferral

At a glance

• Australia’s Pillar Two Rules include a Domestic Minimum Tax (DMT) and Income Inclusion Rule (IIR) which apply to fiscal years starting on or after 1 January 2024 and an Undertaxed Profits Rule (UTPR) which applies to fiscal years starting on or after 1 January 2025.
• The ATO has provided a 30 day lodgment deferral for certain Australian Pillar Two returns. For filings that cannot be formally deferred, the guidance provides alternative transitional relief through the temporary suspension of lodgment enforcement.
• While these measures provide welcome short term relief, they do not change the underlying compliance or payment obligations. In-scope MNE Groups must prepare for Australia’s first Pillar Two reporting and payment obligations which are imminent.
• The ATO has also updated its website guidance to provide clarity on the treatment of deferred tax assets and tax cost setting outcomes for tax consolidated groups.
• Australia’s Pillar Two rules introduce new compliance requirements, and they also present an opportunity for organisations to strengthen and modernise their tax operating model.
• How EY can help
  

In March 2026, the Australian Taxation Office (ATO) released further website guidance clarifying the practical administration of Australia’s Pillar Two global and domestic minimum tax regime, as well as the interaction of Pillar Two with Australia’s tax consolidation regime. The guidance provides much-needed certainty for in-scope multinational enterprise (MNE) groups preparing for their first Australian Pillar Two filings. The updated guidance delivers practical clarity across several key areas, including:

• A 30-day lodgment deferral for the Australian Domestic Minimum Tax Return (DMTR) and Australian Income Inclusion Rule (IIR)/Undertaxed Profits Rule (UTPR) Return (AIUTR) for all MNE Groups in the first year and alternative transitional relief through the temporary suspension of lodgment enforcement for filings that cannot be formally deferred
• Lodgment processes for the Combined Global and Domestic Minimum Tax Return (CGDMTR) and the GloBE Information Return (GIR) and payment mechanics for Pillar Two top up taxes
• Details of the expanded record keeping expectations
• A snapshot of the ATO’s practical administrative approaches to Pillar Two
• Clarity on the treatment of deferred tax assets (DTAs) and tax cost setting outcomes for tax consolidated groups (TCGs), particularly where acquisitions, restructures or consolidation events have occurred in what the ATO refers to as the “window period” commencing on 1 December 2021.

The Australian Government has also registered Taxation (Multinational—Global and Domestic Minimum Tax) Amendment (2026 Measures No. 1) Rules 2026 (Amending Rules), the latest round of Amending Rules, which is now in effect and applies retrospectively from 1 January 2024.

The Taxation (Multinational—Global and Domestic Minimum Tax) (Qualified GloBE Taxes) Amendment (Measures No. 1) Determination 2026 (Amending Determination), which specifies jurisdictions with qualified GloBE taxes, has been registered and is in effect.

Implications for MNE Groups

The ATO’s latest guidance marks a clear shift toward active compliance under Australia’s Pillar Two regime. With the first filing deadline of 30 June 2026 for the GIR and foreign lodgment notification fast approaching, and first lodgements of the DMTR and AIUTR due by 31 July 2026, MNE Groups should act now to align with the ATO’s evolving Pillar Two framework.