Australia: Issued ATO Update on Implementation of Pillar Two Global Minimum Tax Rules

On 24 June 2024, the Australian Taxation Office (ATO) published an update on the implementation of Pillar Two Global Minimum Tax Rules. The ATO is working on the designation of domestic returns and developing systems to administer the measures until the measures become law. The Global Anti-Base Erosion Rules (GloBE Rules) are a key element of the Organisation for Economic Co-operation and Development (OECD)/G20 Inclusive Framework's Two-Pillar Solution to address the tax challenges arising from the digitalisation of the economy. The aim is to set a minimum tax rate to discourage large multinational enterprise groups (MNE groups) from shifting their profits to countries with lower tax rates. Pillar One includes rules on multinational enterprises (MNEs) with a global turnover of more than EUR 20 billion and a before-tax profitability of 10%. This pillar seeks to reallocate profit taxation rights from the MNEs' physical location to the destination countries of their goods or services. Pillar Two focuses on ensuring that all MNEs with a global revenue threshold of over EUR 750 million are taxed at a minimum rate of 15% in every jurisdiction they operate in.