Australia: KPMG comments on draft legislation implementing Pillar Two global minimum tax rules
KPMG tax professionals provided a submission to Treasury
KPMG tax professionals provided a submission to Treasury
Treasury on 21 March 2024 released for consultation draft legislation implementing key aspects of the OECD’s Pillar Two global minimum tax rules. Read TaxNewsFlash
In response to the request for comments, KPMG tax professionals provided a submission to Treasury making the following key points:
- The number of provisions worded differently from the OECD rules needs to be minimized, particularly when they could produce different outcomes. In addition, guidance confirming when existing Australian tax concepts are relevant to definitions within the Australian global anti-base erosion rules (GloBE) rules would be helpful.
- Relief from penalties for the initial years of application of the Australian GloBE rules needs to be specifically provided.
- A designated local entity needs to be allowed to file one return that aggregates jurisdictional data with the other constituent entities (CEs) that are required to file these returns, rather than the returns for each of the CEs being filed on a stand-alone basis.
- Various duplicative domestic tax integrity measures need to be scaled back (i.e., the financing integrity measure in the hybrid mismatch rules needs to be amended so that top-up tax is regarded for the purpose of determining whether the 10% threshold is met).
The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 3712, 1801 K Street NW, Washington, DC 20006.