Australia: Consultation on draft legislation implementing Pillar Two global minimum tax rules
Consultation on primary legislation closes 16 April 2024, and consultation on subordinate legislation closes 16 May 2024.
Treasury released for consultation draft legislation implementing key aspects of the OECD’s Pillar Two global minimum tax rules.
The first set is the primary legislation, which contains three draft bills that form part of a set of legislation required to implement the Pillar Two global anti‑base erosion (GloBE) rules and a domestic minimum tax in Australia:
- Taxation (Multinational—Global and Domestic Minimum Tax) Imposition Bill 2024, which imposes the tax payable under the global and domestic minimum taxes
- Taxation (Multinational—Global and Domestic Minimum Tax) Bill 2024, which establishes the liability and framework for the global and domestic minimum taxes
- Treasury Laws Amendment (Multinational—Global and Domestic Minimum Tax) (Consequential) Bill 2024, which contains consequential and miscellaneous provisions necessary for the administration of the global and domestic minimum taxes
The second set is the subordinate legislation, which contains the Taxation (Multinational—Global and Domestic Minimum Tax) Rules 2024 implementing the domestic framework for a multinational top-up and including the detailed calculations required to arrive at a liability to top-up tax.
A discussion paper has also been included to assist stakeholders in providing feedback on interactions between the exposure draft primary legislation and provisions in Australia’s existing income tax law, including:
- Hybrid mismatch rules;
- Controlled foreign company (CFC) rules
- Foreign income tax offsets
The core rules for implementation of the Pillar Two rules would be effective from 1 January 2024.
Consultation on the primary legislation closes 16 April 2024, and consultation on the subordinate legislation closes 16 May 2024.
Read a March 2024 report prepared by the KPMG member firm in Australia