Explanatory Memorandum
(Circulated by authority of the Assistant Minister for Competition, Charities and Treasury, the Hon Dr Andrew Leigh MP)General outline and financial impact
Chapter 1: Taxation (Multinational—Global and Domestic Minimum Tax) Bills
Outline
Chapter 2 The Bills implement a 15 per cent global minimum tax and Australian domestic minimum tax on certain MNEs with annual global revenue of at least EUR 750 million.
Date of effect
The Assessment Bill commences the day after Royal Assent.
For Australian IIR tax and Australian DMT tax, the Assessment Act applies in relation to Fiscal Years starting on or after 1 January 2024. For Australian UTPR tax, the Assessment Act applies in relation to Fiscal Years starting on or after 1 January 2025.
The Consequential and Imposition Bills commence at the same time as the Assessment Bill. However, the provisions of those Bills do not commence at all if the Assessment Bill does not commence. Similarly, these provisions apply in relation to Fiscal Years commencing on or after 1 January 2024, with the exception of the amendment to the International Tax Agreement Act 1953 applying on a prospective basis only. This amendment provides a legislative instrument making power to determine that a certain provision of one of Australia's bilateral double tax agreements (such as the Exchange of Information Article) takes priority over other tax laws.
Proposal announced
The Bills fully implement the 'Implementation of a global minimum tax and a domestic minimum tax' measure in the 2023-24 Budget.
Financial impact
The Bills have the following estimated revenue implications:
All figures in this table represent amounts in $m.
| 2022-23 | 2023-24 | 2024-25 | 2025-26 | 2026-27 |
| - | - | - | 160.0 | 210.0 |
Impact Analysis
The Office of Impact Analysis (OIA) has been consulted an impact analysis (IA) is required, OIA reference Number: 22-01540
Human rights implications
The Assessment Bill, the Consequential Bill and the Imposition Bill do not engage human rights issues. See Statement of Compatibility with Human Rights — Chapter 4.
Compliance cost impact
The Bills are expected to increase compliance costs for in-scope MNEs.