Global and domestic minimum tax – amending legislation tranche 4

The Australian Government introduced a 15 per cent minimum tax for large companies in 2024.

The laws are based on rules agreed with the OECD Inclusive Framework. These rules make sure large companies pay an effective tax rate of at least 15 per cent tax.

We need to make changes to the law to stay consistent with the OECD rules. The changes are based on OECD Administrative Guidance on the rules.

Share your views on changes to:

• add a Side-by-Side Safe Harbour – allowing the US tax system to work alongside the Pillar Two global minimum tax rules

• add an Ultimate Parent Entity (UPE) Safe Harbour – limiting where the undertaxed profits rule can be applied in certain circumstances

• track deferred tax liabilities that are subject to the deferred tax liability recapture rule

• clarify how to allocate controlled foreign company taxes when a controlled foreign company is a tax transparent entity.

• recognise that natural persons can be owners of flow-through UPEs.