Lodging, paying and other obligations for Pillar Two

Lodgments

New lodgment requirements

Four new lodgment requirements are introduced as part of the Australian global and domestic minimum tax, consistent with the Global Anti-Base Erosion Model RulesExternal Link (GloBE Rules). These are:

1. GloBE Information Return (GIR)
2. Foreign lodgment notification
3. Australian IIR/UTPR Tax Return (AIUTR)
4. Australian DMT Tax Return (DMTR).

We are currently developing forms for the foreign lodgment notification, the AIUTR and the DMTR. We anticipate that the foreign notification, AIUTR and DMTR will be combined in one form.

The forms are being developed in consultation with external stakeholders through the Pillar Two Global and Domestic Minimum Tax Working Group and Digital Service Provider Working GroupExternal Link. These products will be available to taxpayers via Online services for business, Online services for agents and some business software providers in advance of the first lodgments, due by 30 June 2026.

GIR and foreign lodgment notification

The GIR is an information return:

• developed by the Organisation for Economic Co-operation and Development (OECD) Inclusive Framework
• containing data to enable tax administrators to assess a multinational enterprise groups' (MNE groups) compliance with the GloBE Rules.

Under Subdivision 127-A of the Taxation Administration Act 1953 (TAA), the default requirement is for each Australian group entity in an MNE group to lodge a GIR. Broadly, a group entity is an entity or arrangement that, through relationships of ownership or control, have their assets, liabilities, income, expenses and cash flows included in the consolidated financial statements of the Ultimate Parent Entity (UPE).

Consistent with the GloBE Rules, Subdivision 127-A of the TAA provides the ability for group entities to nominate another entity in the MNE group to lodge one single GIR on their behalf. This can comprise of:

• a designated local entity (DLE) lodging with the ATO or a foreign UPE
• a designated filing entity (DFE) lodging with a foreign government agency.

When lodging the GIR with a foreign government agency and not locally with the ATO, to effectively fulfill each Australian group entity's GIR lodgment obligation:

• The GIR must be lodged on-time in that foreign jurisdiction (if not met, the group will still have Australian filing obligations).
• Notification must be given to the Commissioner of Taxation by either each Australian group entity itself or the nominated DLE by lodging a foreign lodgment notification form, which we are currently developing.
• The foreign government agency that the GIR is lodged with must have a Qualifying Competent Authority Agreement (QCAA) with Australia. The GIR will then be exchanged with the ATO as per the QCAA and in line with the dissemination approach agreed by the OECD Inclusive Framework.
  • If the GIR is lodged with a foreign government agency but it's not exchanged with the ATO within the time period specified in the QCAA, the ATO may by written notice require that the GIR be locally lodged with the ATO.
  • We will provide details on our website of any QCAAs that Australia enters into with foreign jurisdictions.

An Australian group entity is required to give a GIR to the Commissioner even if the amount of Australian IIR/UTPR tax or Australian DMT tax is nil.

There is also still an obligation to lodge the AIUTR and DMTR even if the GIR has been lodged overseas.

AIUTR and DMTR

The AIUTR and DMTR are Australian domestic tax returns. They are currently being developed to enable the triggering of Australia's domestic assessment and pay provisions. The GIR is an information only return and does not result in a top-up tax assessment.

The AIUTR is for the global minimum tax, while the DMTR is for the domestic minimum tax.

Under Subdivision 127-A of the TAA, each group entity:

• is required to lodge an AIUTR where they have an Australian IIR/UTPR tax amount (including a nil amount)
• is required to lodge a DMTR where they have an Australian DMT tax amount (including a nil amount).

Entities have the option to nominate the DLE appointed to lodge the GIR to also file the AIUTR and DMTR on their behalf. An entity’s lodgment obligation will be fulfilled where the DLE lodges by the respective lodgment due date.

Note: Excluded entities don't have an obligation to lodge the AIUTR or DMTR, nor do they have an obligation to lodge the GIR and foreign lodgment notification form.

End of example

Legislative instrument

Entities may be exempt from certain lodgment aspects of the Australian global and domestic minimum tax because the Commissioner makes a legislative instrument (LI) that exempts them.

Specifically, subsections 127-35(5) and 127-45(5) of Schedule 1 of the TAA allow the Commissioner to create a LI specifying circumstances in which a group entity need not lodge an AIUTR and DMTR respectively.

We are currently undertaking work to develop such an LI. For completeness, any relief from lodgment may only be available for the AIUTR or DMTR. The Commissioner cannot exempt entities from lodging the GIR or foreign notification form.

If you have particular views on the types of scenarios, circumstances or classes of entities which should be considered for exemption under an LI, send your suggestions to Pillar2Project@ato.gov.au.

Lodgment due dates

The GIR, foreign notification form, AIUTR and DMTR are required to be lodged

• 18 months after the end of the first fiscal year, and
• 15 months after the end of the subsequent fiscal years.

The Commissioner has the ability to extend the lodgment deadline for the AIUTR and DMTR, but not the GIR or the foreign notification form.

Lodgment due dates for the first fiscal year

Year-end date	Lodgment due date
Fiscal years ending before 31 December 2024 (fiscal years less than 12 months)	30 June 2026
31 December 2024	30 June 2026
31 January 2025	31 July 2026
28 February 2025	31 August 2026
31 March 2025	30 September 2026
30 April 2025	31 October 2026
31 May 2025	30 November 2026
30 June 2025	31 December 2026
31 July 2025	31 January 2027
31 August 2025	28 February 2027
30 September 2025	31 March 2027
31 October 2025	30 April 2027
30 November 2025	31 May 2027

Obligations and liabilities for specific entity types

GloBE permanent establishments

For GloBE permanent establishments located in Australia, all lodgment and payment obligations are placed on its main entity. The main entity is required to give the Commissioner a GIR, AIUTR, and DMTR in respect of the GloBE permanent establishment. The GIR and foreign lodgment notification requirements apply to the main entity as if it were located in Australia.

GloBE joint ventures

GloBE joint ventures (JVs) and GloBE JV subsidiaries are not required to separately lodge the GIR or the AIUTR. However, disclosure requirements regarding GloBE JVs and GloBE JV subsidiaries are required in the GIR for applicable MNE groups that hold ownership in GloBE JVs. GloBE JVs and GloBE JV subsidiaries of applicable MNE groups are also required to lodge the Australian DMTR under section 127-55 of the TAA.

Extended application to unincorporated entity types

Targeted rules accommodate different entity types to ensure obligations and liabilities imposed can be administered effectively.

For trusts, partnerships and other unincorporated entities, Subdivision 128-B of the TAA extends the entities to which obligations and liabilities in respect of the Australian global and domestic minimum tax apply.

Extended application under the TAA

Entity type	Entity subtype	Entity that obligation, offences and joint and several liability is applied to	Provision
Trusts	n/a	The trustees, regardless of whether the trustee is a member of the applicable MNE group	128-15
GloBE partnerships	Not a GloBE JV or GloBE JV subsidiary	The partners, regardless of whether the partner is a member of the applicable MNE group.	128-20
GloBE partnership	Unincorporated GloBE JV	Each partner of the unincorporated JV that is a group entity of the applicable MNE group.	128-25
GloBE partnership	Unincorporated GloBE JV subsidiary	Each partner that is the GloBE JV, or another GloBE JV subsidiary, or a group entity of the applicable MNE group.	128-25
Not trust or GloBE partnership	Unincorporated GloBE JV	Each group entity of the applicable MNE group that holds a direct ownership interest in the GloBE JV.	128-25
Not trust or GloBE partnership	Unincorporated GloBE JV subsidiary	The GloBE JV and each group entity of the applicable MNE group that holds a direct ownership interest in the GloBE JV.	128-25
Not trust or GloBE partnership	Unincorporated group entities	Each group entity of the applicable MNE group to which a portion of the unincorporated group entity’s assets, income, expenses, cashflows and liabilities belong, or that is a member of the management committee of the unincorporated group entity.	128-25

Note: Both columns under entity type (entity type and entity subtype) must be met for the relevant provision to apply.

Generally, any entity listed above that the extended application applies to can discharge the obligation or liability.

Liability

Top-up tax liabilities

Global and domestic minimum tax is payable by entities that have a top-up tax amount for the fiscal year.

• The global minimum tax brings the total effective tax in another jurisdiction up to 15% by charging:
  • Australian IIR tax equal to the sum of its IIR top-up tax amounts
  • Australian UTPR tax equal to the sum of its UTPR top-up tax amounts.
• The domestic minimum tax brings the total effective tax in Australia up to 15% by charging:
  • Australian DMT tax equal to the sum of its domestic top-up tax amounts.

An entity becomes liable for top-up tax on the same day the return that gives rise to the assessment is due, generally 15 months after fiscal year end and 18 months after the first fiscal year end. Shortfall interest charge, general interest charge and penalties can also apply. Where an Australian group entity is a member of a tax consolidated group, the head entity is allocated the top-up tax amounts for the purposes of liabilities for DMT and UTPR tax.

The Multinational – Global and Domestic Minimum Tax Rules 2024 and associated Explanatory Statement (PDF, 1.3MB)This link will download a file detail the mechanisms for allocating and computing top-up tax amounts.

Joint and several liability

All group entities of the MNE group become jointly and severally liable to pay top-up tax, meaning the ATO can collect global or domestic minimum tax amounts or related charges from any group entity in the MNE group. Generally, any group entity can discharge the liability on behalf of all group entities in the group.

Specifically, section 128-5 of the TAA provides that if an amount is payable by a group entity of an applicable MNE group, that group entity and each other group entity of that group is jointly and severally liable to pay that amount. An amount includes top-up tax, general interest charge, shortfall interest charge, and penalties.

Additional joint and several liability rules apply to GloBE JVs of an applicable MNE group. Where GloBE JVs and GloBE JV subsidiaries are liable to pay top-up tax, each of these entities and the group entities of the MNE group that have direct ownership interest in the JV are jointly and severally liable to pay the amount.

There are exceptions to this. Joint and several liability does not apply:

• to entities that meet the conditions in subsection 820-39(3) of the Income Tax Assessment Act 1997, or
• where Australian law prohibits the entity from entering into an arrangement under which it becomes subject to such a liability.

Penalties

What administrative penalties can apply

The existing uniform penalty provisions contained in Schedule 1 of the TAA apply, with base penalty amounts similar to those imposed for significant global entities. This means, for example:

• Penalties for failure to lodge on time, which can apply to entities that do not lodge an approved form by the due date. The base penalty amount is multiplied by 500.
• Penalties for false and misleading statements or for taking a position that is not reasonably arguable. The base penalty amount is doubled.

In addition, an administrative penalty can apply for failing to keep records about the global and domestic minimum tax.

OECD guidance on penalties

The OECD has released guidance on transitional penalty relief, which outlines that administrators should consider providing a soft landing for MNE groups during a transition period.

This includes recommending administrators consider not applying penalties or sanctions in connection with the filing of the GIR during the transition period where an MNE group has taken 'reasonable measures' to ensure the correct application of the GloBE rules. 'Reasonable measures' is not defined and should be understood in light of each jurisdiction's existing rules and practices.

ATO guidance on penalties

We are currently considering consultation feedback received to date about the application of penalties to the global and domestic minimum tax. We will explore the need for updated guidance in future consultation.

Record keeping

The legislation inserts Subdivision 382-C in Schedule 1 in the TAA which provides record keeping requirements on the Australian global and domestic minimum tax.

Broadly, the provision requires an Australian group entity, as well as GloBE JVs and GloBE JV subsidiaries, of an MNE group, to keep records that fully explain whether it has complied with the global and domestic minimum tax legislation. This includes, but is not limited to, all records that explain and show the basis of every disclosure in the GIR, AIUTR and DMTR lodged or exchanged with the Commissioner.

Excluded entities, which may not have an obligation to lodge, are still required to keep records relating to their status as an excluded entity.

Records must be kept in writing in English, or in a format that is readily accessible and convertible to English and must enable the entity's liability to top-up tax to be readily determined.

Records must be kept until either:

• the end of 8 years after those records were prepared or obtained
• 8 years after the completion of the transactions or acts to which those records relate
• the end of the period of review for an assessment to which those records relate (if extended), whichever is the later.

Australian record keeping requirements for the GIR

As part of the requirement to keep records that fully explain whether you have complied with the global and domestic minimum tax legislation, you are required to keep records that support the disclosures in the GIR. This is notwithstanding that the UPE or DFE of the MNE group may lodge the GIR with a foreign government agency.

The records required to be kept are dependent on the information required to be provided under the dissemination approach, agreed upon by the OECD Inclusive Framework. The dissemination approach sets out which sections of the GIR are to be distributed to each country based on the MNE group's structure and the requirements of the rule order. More specifically, the UPE country receives the complete GIR, countries with taxing rights receive the detailed calculations for those jurisdictions in which it has taxing rights in relation to, and all countries receive the corporate structure. Based on this, the ATO should receive:

• general information, such as the group's corporate structure and summary information
• detailed top-up tax computations for those jurisdictions in respect of which Australia has taxing rights (including computations in relation to Australia itself)
• detailed sections relating to safe harbours and exclusions where Australia has taxing rights (including Australia itself)
• the whole GIR where there is an Australian UPE
• computations for Australian DMT tax.

Broadly, this means records must be kept for all disclosures in the GIR in relation to overseas jurisdictions where Australia has taxing rights.

Where there is a foreign UPE and Australia does not have taxing rights for an overseas jurisdiction, records must be kept that support that Australian CE has no IIR/UTPR taxing rights as per the agreed rule order. Records must still be kept for all detailed disclosures in the GIR in relation to Australia itself.

Records must also be kept in relation to the MNE group structure regardless of whether Australia has taxing rights over a foreign jurisdiction.

Where there is an Australian UPE, records must be kept for all disclosures in the GIR.

More information

For more information, see:

• OECD GloBE RulesExternal Link
• GloBE Information Return (January 2025 update to version released July 2023)External Link
• GloBE Information Return (Pillar Two) XML SchemaExternal Link