Business taxation International tax & business Significant global entities

International taxation – global and domestic minimum tax – primary legislation

Published Date: 23 Apr 2024


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International taxation – global and domestic minimum tax – primary legislation The Tax Institute welcomes the opportunity to make a submission to the Treasury in respect of its consultation on the:

  • exposure draft Taxation (Multinational – Global and Domestic Minimum Tax) Imposition Bill 2024 (draft Imposition Bill);
  • exposure draft Taxation (Multinational – Global and Domestic Minimum Tax) Bill 2024 (draft Assessment Bill);
  • exposure draft Treasury Laws Amendment (Multinational – Global and Domestic Minimum Tax) (Consequential) Bill 2024 (draft Consequential Amendments Bill);
  • accompanying explanatory memorandum (draft EM); and
  • consultation paper titled ‘Global and domestic minimum taxes: Interactions with other Australian tax laws’ (Consultation Paper).

In the development of this submission, we have closely consulted with members of The Tax Institute that have expertise in the area, including our National Large Business and International Technical Committee, and our Pillar Two Working Group, to prepare a considered response that represents the views of the broader membership of The Tax Institute.

The draft legislation package proposes to implement key aspects of Pillar Two of the Organisation for Economic Co-operation and Development’s (OECD’s) two-pillar solution as set out in the Global Anti-Base Erosion Rules (GloBE). In particular, the draft legislation package proposes to implement the Domestic Minimum Tax (DMT), Income Inclusion Rule (IIR), Undertaxed Payments Rule (UTPR), and domestic top-up tax. These changes, when legislated, will result in significant changes to the compliance obligations for impacted entities.

Given the significance of this impact, we consider it important to ensure that the implementation of Pillar Two considers the cost of the additional compliance obligations on taxpayers, and seeks to minimise these costs where opportunities arise to reduce them. Examples include amalgamating the Australian Globe Tax Return (AGTR) and DMT returns into one form which are filed by one entity in the Applicable MNE Group (AMG), instead of by each Constituent Entity (CE).

Similarly, we consider that a CE’s obligations in relation to the AGTR should be satisfied if it has been lodged with another foreign government agency. The Commissioner should rely on established information sharing protocols to obtain the needed information and provide other jurisdictions with the necessary information if they have been provided in Australia on behalf of other entities in the AMG. Requiring taxpayers to lodge multiple returns where the information is already accessible to the Commissioner is an unnecessary increase in compliance costs.

We also consider that the forms for the AGTR and DMT returns, or drafts of the proposed returns, should be provided to taxpayers at the earliest opportunity to give them sufficient notice of the information they will need to provide. This will assist taxpayers in making the necessary updates to their systems and processes, to enable them to lodge the relevant returns and meet any additional tax obligations.

The Tax Institute also considers that:

  • further consideration and potentially, consultation is required regarding the interaction between Pillar Two and Australia’s tax consolidation regime;
  • further consideration should be given to whether entities that are subject to the top-up taxes should also be subject to the various integrity measures that form part of the Inclusive Framework on Base Erosion and Profit Shifting (BEPS) actions already in place in Australia;
  • unintended timing issues with respect to the interactions between Pillar Two and the foreign income tax offset (FITO) rules should be rectified;
  • the start date for Pillar Two should be delayed by at least 12 months to allow taxpayers reasonable time to understand and meet their tax liabilities;
  • a prompt post implementation review of Pillar Two in Australia will be required to ensure that unforeseen issues are rectified in a timely manner;
  • the approach to non-lodgment penalties should be reviewed, removing the unfair approach of potentially subjecting an AMG to multiple and significant penalties; and
  • the definitions and terminology used in Australian legislation and the contents of information to be requested by the relevant compliance documents/returns should be consistent with the OECD’s approach.

Our detailed response and recommendations to further improve the updated draft Bill and updated draft EM are contained in Appendix A.

The Tax Institute is the leading forum for the tax community in Australia. We are committed to shaping the future of the tax profession and the continuous improvement of the tax system for the benefit of all. In this regard, The Tax Institute seeks to influence tax and revenue policy at the highest level with a view to achieving a better Australian tax system for all.


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Unless expressly stated, opinions are not that of The Tax Institute, which accepts no responsibility for the accuracy of any of the information contained within it.

The Tax Institute
(ABN 45 008 392 372 (PRV14016))


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Business taxation International tax & business Significant global entities

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