Australia: Draft guidance on Pillar Two filing obligations
Transition period applies to fiscal years beginning on or before December 31, 2026, and ending on or before June 30, 2028
The Australian Taxation Office (ATO) released draft guidance, PCG 2025/D3, outlining its transitional approach and expectations related to Pillar Two filing obligations, while implementing the OECD’s transitional penalty relief framework. The draft guidance also includes updates to private binding rulings related to Pillar Two matters.
The Australian Pillar Two filing obligations include:
- GloBE information return (GIR)
- GIR foreign notification form (FNF)
- Income inclusion rule (IIR) / undertaxed profits rule (UTPR) return (AIUTR)
- Domestic minimum tax return (DMTR)
These obligations are consolidated into the Combined Global and Domestic Minimum Tax Return (CGDMTR) in Australia, although the GIR remains a standalone form.
The first Pillar Two filings are due June 30, 2026, for multinational enterprise (MNE) groups with a December 31 year-end, and December 31, 2026, for MNE groups with a June 30 year-end. The ATO allows MNE groups to nominate a designated local entity (DLE) to fulfill filing obligations on behalf of individual entities.
During the transition period, which applies to fiscal years beginning on or before December 31, 2026, and ending on or before June 30, 2028, the ATO will generally remit penalties for failure to file (FTF) down to one penalty per MNE group for CGDMTR and GIR obligations. The ATO also provides examples of "reasonable measures" MNE groups can take to demonstrate compliance, including maintaining adequate records, preparing timely filings, and proactively addressing errors.
The ATO’s draft update to Taxation Ruling TR 2006/11DC aligns with the OECD’s guidance, granting the Commissioner discretion to decline private rulings under certain circumstances, such as pending OECD Administrative Guidance updates or jurisdictional uncertainties.
The draft guidance is open for consultation until August 29, 2025.
For more information, contact a KPMG tax professional in Australia:
Alia Lum | alum@kpmg.com.au
Amanda Maguire | amaguire@kpmg.com.au
Debbieann Silcocks | dsilcocks1@kpmg.com.au