Entity Setup
Global Minimum Tax Rules: What Multinational Enterprises in Australia Must Do
Australia’s global and domestic minimum tax laws are now in force for multinationals — companies with global revenues over EUR 750 million must report and potentially pay top-up tax under the OECD Pillar Two regime.
By NomadicTax Research Team • 5-8 min read • February 24, 2026
## Overview of the Global and Domestic Minimum Tax
Australia has implemented **key aspects of Pillar Two of the OECD/G20 Two-Pillar solution**. The **Taxation (Multinational - Global and Domestic Minimum Tax) Act 2024** and related laws:
- Establish a **15% global minimum tax** for large multinational enterprise (MNE) groups with annual global revenue of **EUR 750 million or more**.
- The **Income Inclusion Rule (IIR)** applies to fiscal years starting on or after **1 January 2024** and the **Undertaxed Profits Rule (UTPR)** from **1 January 2025**.
- A **domestic minimum tax** also applies to parts of the operations inside Australia when the entity’s effective tax rate falls below 15% under certain conditions. ([ato.gov.au](https://www.ato.gov.au/about-ato/new-legislation/in-detail/international/implementation-of-a-global-minimum-tax-and-a-domestic-minimum-tax?utm_source=openai))
## Who is in scope?
- Large multinational corporate groups with specified revenue thresholds.
- Any member of the group that is resident in Australia, or possibly foreign entities that derive income connected to Australia.
- Entities benefiting from low tax regimes or significant deductions may find themselves with top up tax under UTPR or the domestic minimum.
## Reporting and compliance obligations
- Entities in scope must **lodge a GloBE Information Return (GIR)** and other related returns to ATO.
- Australia has published an API product (Global & Domestic Minimum Tax API) for lodging the **Combined Global and Domestic Minimum Tax Return (CGDMTR)** including IIR, UTPR and domestic minimum tax obligations.
- They need properly structured entities, group definitions, documentation of overseas profits, allocations etc.
## Practical implications and strategies
- Entities may need to reorganise structures to ensure credits and deductions are properly documented.
- Use available reliefs if applicable (e.g. foreign income tax offsets).
- Consider whether profits in foreign jurisdictions are taxed below 15%, and whether additional top up tax will be owed domestically.
## Example
A multinational group headquartered partly in Europe, with subsidiaries in Malaysia and Australia. If the Malaysian subsidiary earns profits taxed at, say, 10% locally, under Australia’s global minimum tax regime the IIR could apply and trigger an obligation for the parent entity to pay additional tax so that the effective tax rate reaches 15%. If not, UTPR or domestic minimum tax might spread additional liability among group entities.
## Key deadlines & actions
- Audit internal accounting systems now to make sure they capture cross-border income, tax paid overseas, etc.
- Engage with tax advisors to understand whether your group falls into scope.
- Prepare to use the ATO’s CGDMTR APIs or alternate returns.
- Monitor subordinate legislation and guidance since technical rules (e.g. form design, data submission schema) are still being refined.
**Actionable takeaway:** If your business is part of a multinational group, start by identifying whether you exceed the revenue threshold, then map overseas subsidiaries, foreign tax payments and structures to anticipate exposures. Engage with your tax agent now to avoid surprises when initial returns are required.