Compliance

Navigating Pillar Two Compliance: What Multinational Groups in Australia Must Do Before June–July 2026 Deadlines

Australia’s global minimum tax regime introduces new reporting obligations and forms – MNEs need to prepare now to meet compliance requirements and avoid penalties.

By NomadicTax Research Team • 7 min read • May 21, 2026

## Overview of Pillar Two Reporting Regime Australia’s adoption of the OECD’s Pillar Two framework introduces two main paths of reporting: the **Income Inclusion Rule (IIR)** / **Undertaxed Profits Rule (UTPR)**, and the **Domestic Minimum Tax (DMT)**. These apply to Multinational Enterprise (MNE) groups whose financials or operations meet certain thresholds. The first GloBE Information Return (GIR) is due by **30 June 2026** for many fiscal-year-ending 31 December 2024. AIUR/UTPR and DMTR obligations follow with initial due date **30 July 2026**. ([bdo.com.au](https://www.bdo.com.au/en-au/insights/tax/articles/ato-releases-an-update-on-the-new-pillar-two-compliance-guidelines?utm_source=openai)) ## Recent Updates & Relief Measures To ease the burden in the inaugural reporting year, the ATO has: - Released **new guidance** clarifying interactions with Australia’s tax consolidation regime, deferred tax assets and carrying values in tax cost setting. ([ey.com](https://www.ey.com/en_au/technical/tax/tax-alerts/2026/australian-taxation-office-releases-new-pillar-two-website-guidance-and-announces-lodgment-deferral?utm_source=openai)) - Issued Amending Rules (2026 Measures No.1) **retrospective from 1 January 2024** to clarify certain ambiguous positions. ([ey.com](https://www.ey.com/en_au/technical/tax/tax-alerts/2026/australian-taxation-office-releases-new-pillar-two-website-guidance-and-announces-lodgment-deferral?utm_source=openai)) - Provided a **30-day lodgment deferral** for AIUR/UTPR/DMTR filings, and temporary suspension of enforcement where necessary. ([ey.com](https://www.ey.com/en_au/technical/tax/tax-alerts/2026/australian-taxation-office-releases-new-pillar-two-website-guidance-and-announces-lodgment-deferral?utm_source=openai)) ## Compliance & Reporting Requirements: Step-by-Step Guide 1. **Determine if your group is in-scope**: check thresholds, whether you're an MNE, whether activities give rise to IIR, UTPR or DMT obligations. Even nil returns may be required. ([bdo.com.au](https://www.bdo.com.au/en-au/insights/tax/articles/ato-releases-an-update-on-the-new-pillar-two-compliance-guidelines?utm_source=openai)) 2. **Identify or appoint a Designated Local Entity (DLE)** if your group consists of multiple Australian entities; this can simplify lodging the Combined Global & Domestic Minimum Tax Return (CGDMTR). ([bdo.com.au](https://www.bdo.com.au/en-au/insights/tax/articles/ato-releases-an-update-on-the-new-pillar-two-compliance-guidelines?utm_source=openai)) 3. **Access the correct ATO channels**: ensure the DLE or relevant entities have access to ATO online services • API-enabled if needed. Get familiar with filing tools. ([bdo.com.au](https://www.bdo.com.au/en-au/insights/tax/articles/ato-releases-an-update-on-the-new-pillar-two-compliance-guidelines?utm_source=openai)) 4. **Keep detailed records**: Invest in documentation around deferred tax assets, consolidation events since 1 December 2021, window period restructures (acquisitions, mergers) for correct tax cost setting. ([ey.com](https://www.ey.com/en_au/technical/tax/tax-alerts/2026/australian-taxation-office-releases-new-pillar-two-website-guidance-and-announces-lodgment-deferral?utm_source=openai)) 5. **Plan for cash-flow and payment obligations**: top-up taxes or under-taxed profits may trigger real payments. Evaluate these in advance. ([ey.com](https://www.ey.com/en_au/technical/tax/tax-alerts/2026/australian-taxation-office-releases-new-pillar-two-website-guidance-and-announces-lodgment-deferral?utm_source=openai)) ## Risks & Common Pitfalls - Missing the deadline (30 June for GIR / 30 July for CGDMTR etc.) could lead to enforcement actions. ([bdo.com.au](https://www.bdo.com.au/en-au/insights/tax/articles/ato-releases-an-update-on-the-new-pillar-two-compliance-guidelines?utm_source=openai)) - Mis-aligning financial year ends can complicate consolidation and reporting, especially for joint ventures. ([ey.com](https://www.ey.com/en_au/technical/tax/tax-alerts/2026/australian-taxation-office-releases-new-pillar-two-website-guidance-and-announces-lodgment-deferral?utm_source=openai)) - Under-estimating complexity of cost-setting rules, especially if there have been acquisitions, restructuring, or consolidation events during the window period. ([ey.com](https://www.ey.com/en_au/technical/tax/tax-alerts/2026/australian-taxation-office-releases-new-pillar-two-website-guidance-and-announces-lodgment-deferral?utm_source=openai)) ## Action Plan Before Deadlines - Conduct a **gap analysis** to see where your current reporting and disclosure frameworks are insufficient. - Update financial systems to capture needed granular data (tax cost bases, deferred tax, acquisition dates, acquisition costs) - Engage external specialist tax advisers for complex MNE groups or where consolidation/joint venture/misaligned year issues apply. - Consider early filing where possible to reduce risk. Use the deferral only if absolutely needed. ## Take-Home Message Pillar Two is not just a box-checking exercise—it imposes substantive reporting, calculation and payment duties. MNE groups must act now to align internal processes, engage external experts if needed, and treat this as a strategic opportunity to sharpen tax governance. With enforcement on the way, those who prepare early will gain clarity and avoid costly surprises.