Introduction
Australia has legislated the Global Anti-Base Erosion (GloBE) rules, introducing both a global and domestic minimum tax to ensure multinational enterprises (MNEs) cannot shift profits to low-tax jurisdictions without being taxed. The ATO’s Combined Global and Domestic Minimum Tax Return (CGDMTR) API is now available for reporting. (softwaredevelopers.ato.gov.au)
Key Dates & Rules
- From 1 January 2024, the Income Inclusion Rule (IIR) applies to relevant income years; the Undertaxed Profits Rule (UTPR) from 1 January 2025. (softwaredevelopers.ato.gov.au)
- The 15% Domestic Minimum Tax (DMT) also applies for income years starting 1 January 2024. (softwaredevelopers.ato.gov.au)
- MNE groups are expected to lodge foreign lodgment notifications when required. (apiportal.ato.gov.au)
Reporting via ATO API
The CGDMTR API allows MNEs and their tax agents to lodge:
- Foreign lodgment notification
- Australian IIR/UTPR top-up tax liabilities
- Domestic Minimum Tax (DMT) liabilities
The API supports original and amendment lodgments, handles up to 300 group entities, and requires valid identifiers (TFN, ABN, ARN, TIN) for both lodging entities and group entities. (apiportal.ato.gov.au)
Practical Implications & Compliance Tips
- Assess whether you’re in scope: MNEs with global turnover above the relevant threshold must comply; lower-turnover groups may be exempt but still subject to domestic minimum tax rules.
- Ensure accurate data: Identify all group entities, ensure up-to-date identifiers, addresses, and statutory data (for both Australian and foreign entities).
- Use the API effectively: Set up system workflows for both original and amendments; track transaction ID requirements for group entity returns. (apiportal.ato.gov.au)
- Monitor tax liabilities: IIR and UTPR rules can lead to top-up taxes based on profits taxed below 15% elsewhere. Ensure transfer pricing and valuation align with OECD and ATO expectations.
Example
Suppose an Australian company is part of a group with overseas subsidiaries. For the year ending 31 December 2024, those subsidiaries had profits taxed at 10% in their jurisdictions. Under the IIR, Australia may impose a top-up to reach the 15% minimum. The Australian group uses the CGDMTR API to lodge:
- Foreign lodgment notification (if one of the entities is the Designated Filing Entity)
- A group entity tax return for the subsidiaries at 10% rate indicating IIR top-up tax
- Payment Reference Numbers to settle liabilities
Strategic Tax Planning Insights
- Evaluate off-shore tax rates now that you know the 15% threshold. Investing in jurisdictions with compliant tax rates may reduce exposure.
- Review transfer pricing policies, holding structures, and financing arrangements.
- Use the API’s amendment functions to correct earlier filings where data was incomplete or incorrect.
Conclusion
The GloBE rules are no longer optional for in-scope multinational groups operating in Australia. With key deadlines in the past and the CGDMTR API live, action is required now to ensure compliance, optimize outcomes, and avoid penalties.