Pillar Two feedback
The project team provided a summary of key feedback received for Draft Practical Compliance Guideline PCG 2025/D3 Global and domestic minimum tax lodgment obligations - transitional approach and an overview of the website content on the transitional country-by-country (CBC) reporting safe harbour.
The focus for the transitional CBC reporting safe harbour web content is to provide additional advice and guidance and common lodgment questions.
The project team provided a summary of feedback that has been received for the Draft Legislative Instrument LI 2025/D17 Taxation Administration (Exemptions from Requirement to Lodge Australian IIR/UTPR tax return and Australian DMT tax return) Determination 2025. Public consultation closed on 24 September 2025.
Member comments
A summary of feedback received was provided for draft PCG/D3 through the public consultation process and how we will address the feedback. No further comments were received from members.
Members noted broadly that the transitional CBC reporting safe harbour web content guidance is clear and well structured.
Members sought clarity on whether tax adjustments are required when making profit adjustments for hybrid arbitrage arrangements. Certain expenses and losses reflected in the profit or loss before income tax amount may need to be excluded if the expense or loss arose because of a deduction/non-inclusion arrangement or duplicate loss arrangement entered after 15 December 2022.
Subject to certain conditions, adjustments may not be required for these arrangements.
Members raised that web content should be clear that even when the transitional CBC reporting safe harbour applies, an Australian income inclusion rule (IIR) and undertaxed profits rule return (UTPR) and Australian domestic minimum tax (DMT) return showing Australian IIR, UTPR and DMT tax amounts of zero must still be lodged.
Further adjustments have been made to the transitional CBC reporting safe harbour pages to make this clearer.
Members raised that ATO compliance approaches, such as the one included in the transitional CBC reporting safe harbour web content on intra-group arrangements within tax consolidated groups, should be made more prominent.
We noted that we are drafting 'quick reference guides' that outline common lodgment scenarios under Pillar Two, including those arising under safe harbour and what needs to be done. This is to clarify filing obligations and to address some of the common lodgment questions.
An update on the feedback received for the draft legislative instrument through the public consultation process was provided with no further comments received from members.
Other business
Filing in Australia where Pillar Two has not commenced in the UPE jurisdiction
Members asked broadly about lodging in Australia in circumstances where Pillar Two application has not yet commenced in the jurisdiction of the ultimate parent entity (UPE).
We noted that the Organisation for Economic Co-operation Development dissemination approach considers circumstances where you are using a jurisdiction that is not the UPE jurisdiction as a designated filing entity (DFE) jurisdiction. If an Australian group entity is nominated as DFE and lodges the Global Anti-Base Erosion Model information return (GIR) in Australia, Australia can disseminate the GIR to other jurisdictions, subject to the dissemination approach and terms of GIR Multilateral Competent Authority Agreement, effectively stepping into the role of the UPE for purpose of exchange of GIR to other implementing jurisdictions.
Further clarification can be provided if needed.
Online tax return access
Members asked about the accessibility of the online tax returns and being able to see them before lodgment date.
A preview will be made available on our website which will give users a view of the layout and structure, however, this version will be static and not interactive.