Explanatory Memorandum
(Circulated by authority of the Assistant Minister for Competition, Charities and Treasury, the Hon Dr Andrew Leigh MP)Chapter 4: Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Taxation (Multinational—Global and Domestic Minimum Tax) Bill 2024
Overview
4.1 This Taxation (Multinational—Global and Domestic Minimum Tax) Bill 2024 (Assessment Bill), Treasury Laws Amendment (Multinational—Global and Domestic Minimum Tax) (Consequential) Bill 2024 (Consequential Bill), and Taxation (Multinational—Global and Domestic Minimum Tax) Imposition Bill 2024 (Imposition Bill) are compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
4.2 The Imposition Bill deals only with the imposition of top-up tax and is required to comply with section 55 of the Constitution. The top-up tax is as follows:
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- Australian DMT tax for tax payable in accordance with subsection 8(1) of the Assessment Bill;
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- Australian IIR tax for tax payable in accordance with subsection 6(1) of the Assessment Bill; and
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- Australian UTPR tax for tax payable in accordance with subsection 10(1) of the Assessment Bill. [Section 3 of the Imposition Bill]
4.3 The Assessment Bill establishes a new taxation framework to implement the GloBE Rules and a DMT for certain MNE Groups. The framework establishes rules for assessing the domestic minimum top-up tax and the global minimum top-up tax liability of certain MNEs as a part of a coordinated global approach. The Assessment Bill ensures that MNEs within scope of the GloBE Rules have an ETR of at least 15 per cent in respect of the GloBE income arising in each jurisdiction in which they operate, consistent with the GloBE Rules.
4.4 The Consequential Bill makes amendments to the existing administrative framework in the TAA with few modifications except as required to be consistent with the GloBE Rules. These consequential and miscellaneous amendments are necessary for the administration of IIR and UTPR top-up tax and Domestic top-up tax.
Human rights implications
4.5 The Imposition Bill, Assessment Bill and Consequential Bill do not engage any of the applicable rights or freedoms.
4.6 Top-up taxes imposed under the GloBE rules generally apply to multinational corporations, and are not applicable to natural persons, therefore not engaging human rights.
Conclusion
4.7 The Imposition Bill, Assessment Bill and Consequential Bill are compatible with human rights as it does not raise any human rights issues.