Entity Setup
Entity Setup & Structure: Choosing the Right Vehicle Under Australia’s Minimum Global Tax Regime
With Pillar Two Global Anti-Base Erosion (GloBE) and Domestic Minimum Tax (DMT) rules active in Australia from 1 January 2024, selecting the right business entity structure carries new international tax implications.
By NomadicTax Research Team • 5-8 min read • March 21, 2026
## Pillar Two / GloBE / Domestic Minimum Tax — What Entities Should Know
Australia has enacted the OECD’s Pillar Two rules, including the **Global Anti-Base Erosion (GloBE)** model and **Domestic Minimum Tax (DMT)**, which began for fiscal years from **1 January 2024**. Multinational enterprises (MNEs) with Australian operations are subject to new reporting, top-up tax obligations, and compliance requirements. ([ato.gov.au](https://www.ato.gov.au/media-centre/key-developments-in-tax-administration-in-australia?utm_source=openai))
Key requirements:
* Lodging a **GloBE Information Return (GIR)** by the **ultimate parent entity or designated filing entity**. Deadlines are generally **15 months after the fiscal year end** (first year might have extended timeline). ([au.andersen.com](https://au.andersen.com/february-2026-monthly-tax-update/?utm_source=openai))
* Submitting associated **Australian GloBE Tax Return (AGTR)** and **Domestic Minimum Tax Return (DMTR)**. 🇦🇺 These returns trigger assessment and collection and occur on same schedule as GIR. ([au.andersen.com](https://au.andersen.com/february-2026-monthly-tax-update/?utm_source=openai))
## How This Impacts Choice of Entity
When structuring cross-border ventures, fund entities, subsidiaries, or trusts, consider:
* **Entity type** (company, trust, partnership): some vehicles face joint and several liability in paying top-up tax under DMT or GloBE. Trusts may impose liability on trustees. ([au.andersen.com](https://au.andersen.com/february-2026-monthly-tax-update/?utm_source=openai))
* **Foreign ownership**: entities with foreign investors need to assess interplay with FRCGW and withholding and understand clearance certificate regimes. (See Business Compliance article above.)
* **Fund flows & ultimate beneficial ownership**: structures that split ownership among multiple entities may complicate filing or compliance in global info returns.
## Entity Setup Strategy Tips
* Evaluate whether forming a **company vs trust** leads to simpler GloBE compliance and reduces reporting obligations or liability exposure.
* Use **Single Entity Filing** options where possible if entities are part of a group to reduce duplication under AGTR/DMTR. ([au.andersen.com](https://au.andersen.com/february-2026-monthly-tax-update/?utm_source=openai))
* Document governance and beneficial ownership carefully—who holds what, who exercises control. Essential for determining who is “designated parent” or who has ultimate responsibility under GloBE.
## Real-World Example: International Fund Structure
Imagine "Pacific Growth Funds", with offshore parent and Australian fund manager, several investments in real property. They need to determine:
* Who is the **designated filing entity** (parent or local group entity).
* Whether fund’s trust structure exposes top-up tax liability on beneficiaries or trustee.
* How flows of dividends, interest, and property sales are structured to align with AGTR/DMTR reporting rules.
## What to Do Right Now
1. Identify if your entity (or group) is in scope of GloBE/DMT—review revenue, assets, foreign operations.
2. Build or review compliance processes: record-keeping, beneficial ownership, accounting for foreign income and taxes.
3. Implement systems to manage GIR, AGTR, DMTR filings and deadlines.
4. Seek advice to optimize structure ahead of 2026-27 operations—entity type could materially affect tax cost.
Entity setup decisions today will determine tax exposure for years under the minimum tax regime. Smart structure + careful compliance = lower risk and smoother execution.