Entity Setup
Global Minimum Tax & You: What Multinationals Should Know in Australia
With Australia’s GloBE rules in effect, multinational enterprise groups must report and pay minimum tax domestically on under-taxed profits. Here’s what to expect.
By NomadicTax Research Team • 5-6 min read • June 5, 2026
## 1. Background: What Are GloBE and Domestic Minimum Tax Rules?
Australia has adopted the OECD’s **Global Anti-Base Erosion (GloBE) Rules**, including the **Income Inclusion Rule (IIR)** and **Undertaxed Profits Rule (UTPR)**, which aim to ensure multinational enterprise (MNE) groups pay at least **15% tax** in each country they operate. Australia’s **Domestic Minimum Tax (DMT)** complements this to fill gaps. ([softwaredevelopers.ato.gov.au](https://softwaredevelopers.ato.gov.au/Pillar2?utm_source=openai))
Key timeline points:
- IIR applies to income years **starting on or after 1 January 2024**. UTPR applies from **1 January 2025**. The DMT applies also from **1 January 2024**. ([softwaredevelopers.ato.gov.au](https://softwaredevelopers.ato.gov.au/Pillar2?utm_source=openai))
## 2. Reporting Obligations and API Changes
- Multinational groups must lodge a **GloBE Information Return (GIR)** to report global tax base and ensure top-up or undertaxed profits are assessed. ([apiportal.ato.gov.au](https://apiportal.ato.gov.au/api-products/global-and-domestic-minimum-tax?utm_source=openai))
- Australia has introduced a **Global and Domestic Minimum Tax Return API**, enabling lodging entities or their agents to submit original or amended returns—including IIR, UTPR, DMT liabilities—for groups up to **300 entities** in one lodgment. ([apiportal.ato.gov.au](https://apiportal.ato.gov.au/api-products/global-and-domestic-minimum-tax?utm_source=openai))
- Updated instructions for developers: transaction ID from your most recent successful CGDMTR lodgment must be provided in Group Entity returns; schema and request formats were refined in May 2026. ([apiportal.ato.gov.au](https://apiportal.ato.gov.au/api-products/global-and-domestic-minimum-tax?utm_source=openai))
## 3. Who Is Affected?
- Large multinationals that have entities resident in Australia or derive income in Australia which are part of foreign MNE groups are in scope.
- Designated Local Entities (DLEs) or lodging entities must comply. Even entities that are not the ultimate parent may bear obligations in filings. ([apiportal.ato.gov.au](https://apiportal.ato.gov.au/api-products/global-and-domestic-minimum-tax?utm_source=openai))
## 4. Actionable Steps & Examples
- **Example 1:** A foreign-owned Australian subsidiary in a group must report its share of global profits and pay top-up tax if its profits are taxed below 15% after foreign tax credits. Use the new API to communicate with ATO, ensuring data formats match.
- **Example 2:** An Australian parent entity needs to notify ATO if its group’s GIR is lodged elsewhere; designation of DLE may fall to it. Ensure internal reporting aligns with ATO’s XML schema.
Steps your organisation should take now:
- Map your group structure, identify entities in scope.
- Update tax compliance systems to integrate with ATO’s API for CGDMTR.
- Prepare to report and pay minimum tax liabilities, ensure foreign tax credits are properly documented.
- Engage external tax advisors to simulate under both existing and new rules—understand exposure and timings.
## 5. Risks, Penalties & Compliance
- Non-lodgement, incorrect reporting, or failure to pay liabilities may lead to **interest, penalties and reputational risk**.
- Schemes that reduce tax under arms’-length may be scrutinised under global minimum tax rules.
- Technological or software failures (e.g. not using the correct formats, missing transaction IDs) may lead to rejected returns or delayed payments.
Global minimum tax regime is already in force in Australia. Businesses should act **now** to ensure software, corporate structure, and reporting processes are aligned for compliance.