Tax Planning
Navigating Australia’s Pillar Two Global and Domestic Minimum Tax Regime
Multinational enterprises must get ready for Australia’s Pillar Two regime—here’s what the updated guidance, lodgment deadlines and compliance obligations mean for 2026 and beyond.
By NomadicTax Research Team • 6 min read • April 23, 2026
## What is Pillar Two, and why it matters now
Australia has implemented **the OECD’s global minimum tax rules**—called Pillar Two—to combat profit shifting and base erosion. Under the new regime, multinational enterprise (MNE) groups must comply with:
- The **Income Inclusion Rule (IIR)** and **Undertaxed Profits Rule (UTPR)** from fiscal years starting 1 January 2024. ([ey.com](https://www.ey.com/content/dam/ey-unified-site/ey-com/en-au/technical/tax/documents/ey-tax-alert-australian-taxation-office-announces-pillar-two-lodgment-deferral-and-releases-new-guidance.pdf?utm_source=openai))
- The **Domestic Minimum Tax (DMT)** from the same date. ([ey.com](https://www.ey.com/content/dam/ey-unified-site/ey-com/en-au/technical/tax/documents/ey-tax-alert-australian-taxation-office-announces-pillar-two-lodgment-deferral-and-releases-new-guidance.pdf?utm_source=openai))
- New filing and reporting obligations: GloBE Information Return (GIR), combined returns for Australian IIR and UTPR, and DMT returns. ([ey.com](https://www.ey.com/content/dam/ey-unified-site/ey-com/en-au/technical/tax/documents/ey-tax-alert-australian-taxation-office-announces-pillar-two-lodgment-deferral-and-releases-new-guidance.pdf?utm_source=openai))
## Recent policy developments
| Update | Details | Implications |
|---|---|---|
| **Lodgment deferrals registered** | A 30-day lodgment deferral has been granted for some domestic minimum tax (DMTR) and IIR/UTPR filings, especially for groups affected by acquisitions, restructures or consolidation events in the “window period” (from 1 December 2021). ([ey.com](https://www.ey.com/content/dam/ey-unified-site/ey-com/en-au/technical/tax/documents/ey-tax-alert-australian-taxation-office-announces-pillar-two-lodgment-deferral-and-releases-new-guidance.pdf?utm_source=openai)) | Provides breathing room for MNEs with restructuring events; avoid late lodgment penalties. |
| **Amending rules retrospectively effective** | The Taxation (Multinational—Global and Domestic Minimum Tax) Amendment (2026 Measures No. 1) Rules were registered, with retrospective effect from 1 January 2024. ([ey.com](https://www.ey.com/content/dam/ey-unified-site/ey-com/en-au/technical/tax/documents/ey-tax-alert-australian-taxation-office-announces-pillar-two-lodgment-deferral-and-releases-new-guidance.pdf?utm_source=openai)) | Means back-dating effect for compliance; historical transactions need review. |
| **Qualified GloBE taxes determination issued** | The Qualified GloBE Taxes Amendment (Measures No. 1) Determination specifies which foreign jurisdictions are considered to have sufficiently high tax regimes (Qualified GloBE tax) for crediting and top-up purposes. ([ey.com](https://www.ey.com/content/dam/ey-unified-site/ey-com/en-au/technical/tax/documents/ey-tax-alert-australian-taxation-office-announces-pillar-two-lodgment-deferral-and-releases-new-guidance.pdf?utm_source=openai)) | Determines where foreign tax offsets apply; affects IIR/UTPR liability and planning. |
## Key dates & compliance deadlines
- **1 January 2024**: In scope date for IIR and DMT rules begins. ([ey.com](https://www.ey.com/content/dam/ey-unified-site/ey-com/en-au/technical/tax/documents/ey-tax-alert-australian-taxation-office-announces-pillar-two-lodgment-deferral-and-releases-new-guidance.pdf?utm_source=openai))
- **31 July 2026**: First due date for Australian DMTR and AIUTR outcomes for consolidated groups. ([ey.com](https://www.ey.com/content/dam/ey-unified-site/ey-com/en-au/technical/tax/documents/ey-tax-alert-australian-taxation-office-announces-pillar-two-lodgment-deferral-and-releases-new-guidance.pdf?utm_source=openai))
- **30 June 2026**: Deadline for GloBE Information Return (GIR) and foreign lodgment notification. ([ey.com](https://www.ey.com/content/dam/ey-unified-site/ey-com/en-au/technical/tax/documents/ey-tax-alert-australian-taxation-office-announces-pillar-two-lodgment-deferral-and-releases-new-guidance.pdf?utm_source=openai))
## Practical planning tips
- **Review restructuring history** since 1 December 2021. If your MNE group has undergone consolidations or acquisitions, understand the “window period” implications to avoid penalties.
- **Map out foreign operations** and jurisdictions—identify which are **Qualified GloBE** jurisdictions. It affects offset calculations and whether jurisdictions trigger IIR vs UTPR.
- **Ensure accounting systems can produce relevant entity-by-entity data**, not just consolidated reports. Top-down approximations may cause compliance risk.
- **Engage early with private rulings or seek legal interpretations** especially on deferred tax assets or cost settings under Australia’s Pillar Two rules.
- **Prepare lodgment plans**: set internal timelines for gathering data, applying deferrals, and making returns due by mid-2026. Consider software or API options like the ATO’s CGDMTR API. ([apiportal.ato.gov.au](https://apiportal.ato.gov.au/api-products/global-and-domestic-minimum-tax?utm_source=openai))
## Example
Company XYZ has an Australian parent and two overseas subsidiaries. Subsidiary A (in country with 5% tax) and Subsidiary B (in country with 22% tax). Under Pillar Two’s IIR, XYZ will include its parent’s share of Subsidiary A’s low taxed income and pay top-up tax in Australia. With the new Qualified GloBE jurisdiction list, if Subsidiary B’s country is on that list, its domestic tax is recognised, helping reduce IIR burden. But since rules apply retrospectively from Jan 2024, XYZ must review its filings since that date to determine if early returns are needed.
## Conclusion
Australia’s Pillar Two regime represents a major shift in international tax compliance. For MNEs, the keys are: identifying if you're in-scope, understanding deadlines, leveraging deferral and Qualified GloBE determinations, and ensuring systems and adviser support are in place. With careful planning and timely action, businesses can minimise unexpected liabilities and manage compliance efficiently.