Compliance

Pillar Two in Action: Navigating Australia’s Global & Domestic Minimum Tax for Multinationals

Multinational groups operating in Australia face new obligations under the OECD’s Pillar Two rules—this article breaks down the lodgment requirements, exemptions, and key actions to stay compliant.

By NomadicTax Research Team • 5-8 min read • May 8, 2026

## What are Pillar Two / Global & Domestic Minimum Tax (GloBE) Australia has adopted the OECD's Global Anti-Base Erosion Model Rules (GloBE Rules) by enacting new laws in **December 2024**—namely, the *Taxation (Multinational-Global and Domestic Minimum Tax) Act 2024* and related Acts.([ato.gov.au](https://www.ato.gov.au/businesses-and-organisations/international-tax-for-business/in-detail/multinationals/global-and-domestic-minimum-tax?utm_source=openai)) These rules aim to ensure multinational enterprise (MNE) groups pay a minimum effective tax rate of **15%** in each jurisdiction they operate.([ato.gov.au](https://www.ato.gov.au/businesses-and-organisations/international-tax-for-business/in-detail/multinationals/global-and-domestic-minimum-tax?utm_source=openai)) ## Key Lodgment Requirements and Forms Four major lodgment obligations apply under Australia’s implementation: the **GloBE Information Return (GIR)**, **Foreign Lodgment Notification**, **Australian IIR/UTPR Tax Return (AIUTR)**, and **Australian Domestic Minimum Tax Return (DMTR)**. While some forms are combined into a new form dubbed **CGDMTR**, the GIR remains a separate obligation.([ato.gov.au](https://www.ato.gov.au/businesses-and-organisations/international-tax-for-business/in-detail/multinationals/global-and-domestic-minimum-tax/lodging-paying-and-other-obligations-for-pillar-two?utm_source=openai)) Entities without a jurisdictional tax liability may still need to lodge **nil returns**, unless they meet specific exemption criteria.([ato.gov.au](https://www.ato.gov.au/law/view/document?docid=ops%2Fli2025d17%2F00001&pit=99991231235958&utm_source=openai)) ## Exemptions: When Returns Might Not Be Needed The recently drafted *Legislative Instrument LI 2025/D17* provides for exemptions from lodging AIUTR and DMTR returns in certain cases. Examples include: - Subsidiary members of tax-consolidated or Multiple Entry Consolidated (MEC) groups in certain circumstances.([ato.gov.au](https://www.ato.gov.au/law/view/document?docid=ops%2Fli2025d17%2F00001&pit=99991231235958&utm_source=openai)) - Entities not GloBE located in Australia, unless they are a main entity of a GloBE permanent establishment.([ato.gov.au](https://www.ato.gov.au/law/view/document?docid=ops%2Fli2025d17%2F00001&pit=99991231235958&utm_source=openai)) - Entities whose liabilities under AIUTR or DMTR would be **nil** (i.e., no actual top-up tax payable) due to safe harbor rules, or because all ownership is within Australia or covered by qualified inclusion rules.([ato.gov.au](https://www.ato.gov.au/law/view/document?docid=ops%2Fli2025d17%2F00001&pit=99991231235958&utm_source=openai)) Note: **GIR and Foreign Lodgment Notification** obligations cannot be exempted under current law.([ato.gov.au](https://www.ato.gov.au/businesses-and-organisations/international-tax-for-business/in-detail/multinationals/global-and-domestic-minimum-tax/lodging-paying-and-other-obligations-for-pillar-two?utm_source=openai)) ## Effective Dates & Deadlines - **IIR** and **Domestic Minimum Tax (DMT)** apply from fiscal years starting **1 January 2024**.([ato.gov.au](https://www.ato.gov.au/businesses-and-organisations/international-tax-for-business/in-detail/multinationals/global-and-domestic-minimum-tax?utm_source=openai)) - **UTPR** enters force for fiscal years starting **1 January 2025**.([ato.gov.au](https://www.ato.gov.au/businesses-and-organisations/international-tax-for-business/in-detail/multinationals/global-and-domestic-minimum-tax?utm_source=openai)) - First due date for many lodgments (for fiscal year ending 31 December 2024) is **30 June 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)) ## Actionable Steps for In-scope Businesses - Identify if your group meets the **€750 million revenue threshold** (based on the ultimate parent entity’s consolidation) across recent years.([ato.gov.au](https://www.ato.gov.au/businesses-and-organisations/international-tax-for-business/in-detail/multinationals/global-and-domestic-minimum-tax/when-and-how-the-pillar-two-rules-apply?utm_source=openai)) - Determine if any of your group entities are **excluded entities** under Australia’s definitions (e.g. certain pension funds, government bodies, real estate investment funds).([ato.gov.au](https://www.ato.gov.au/businesses-and-organisations/international-tax-for-business/in-detail/multinationals/global-and-domestic-minimum-tax/when-and-how-the-pillar-two-rules-apply?utm_source=openai)) - Map your **ownership structure**—are you a subsidiary, MEC member, or possibly non-GloBE located? These distinctions matter for exemptions.([ato.gov.au](https://www.ato.gov.au/businesses-and-organisations/international-tax-for-business/in-detail/multinationals/global-and-domestic-minimum-tax/lodging-paying-and-other-obligations-for-pillar-two?utm_source=openai)) - Prepare for updated reporting systems, including APIs (like the CGDMTR API) for automated lodgment.([apiportal.ato.gov.au](https://apiportal.ato.gov.au/api-products/global-and-domestic-minimum-tax?utm_source=openai)) - Keep robust documentation—especially if claiming exemptions or safe harbor status. ## Practical Example Imagine *GlobalCo* is an Australian-based multinational with entities in several jurisdictions. One of its subsidiaries in Australia is part of a tax consolidated group and holds no foreign operations outside Australia. Under LI 2025/D17, that subsidiary **may be exempt** from lodging AIUTR or DMTR if it meets both ownership and liability nil-tests. But GlobalCo must still lodge the GIR (even if no liability) and Foreign Lodgment Notification. Missing those could result in penalties. **So always check each entity’s status individually.** ## Why It Matters Non-compliance risks include penalties, audits, damaged reputations, and unexpected tax liabilities. Staying ahead now ensures smooth compliance as more returns become due by **30 June 2026** and beyond. **Summary**: Pillar Two is reshaping how multinationals report and pay tax in Australia. Understand your obligations, evaluate potential exemptions, and get ready for new returns and tighter deadlines.