On March 21, 2024 the Australian Treasury opened 2 separate public consultations regard to sets of draft legislation to implement a global and domestic minimum corporate tax rate of 15% in Australia.
The first consultation regards a set of primary legislation to implement a global and domestic minimum corporate tax rate of 15%. The consultation period for this consultation runs from March 21, 2024 until April 16, 2024.
The second consultation regards a set of secondary legislation to implement a global and domestic minimum corporate tax rate of 15%. The consultation period for this consultation runs from March 21, 2024 until May 16, 2024.
The consultation regarding the primary legislation to implement Pillar 2
The primary legislation to implement a global and domestic minimum corporate tax rate consists of:
- An Imposition Bill;
- An Assessment Bill; and
- A Consequential Amendments Bill.
The Imposition Bill imposes top-up tax, namely the Domestic top-up tax, the IIR top-up tax and the UTPR top-up tax.
The Assessment Bill implements the framework for imposition of top-up tax for the IIR, UTPR and the DMT consistent with the GloBE Rules.
The Consequential Bill contains consequential and miscellaneous provisions necessary for the administration of the top-up tax in respect of Applicable MNE Groups.
The Domestic top-up tax and IIR top-up tax will apply for Fiscal Years beginning after January 1, 2024. UTPR top-up tax will apply for Fiscal Years beginning after January 1, 2025.
More information on the consultation with respect to the primary legislation to implement Pillar 2 in Australia and the consultation documents can be found here.
The consultation regarding the secondary legislation to implement Pillar 2
The secondary legislation, in the form of Rules, comprise the key operative aspects of the Global Anti‑Base Erosion (GloBE) Model Rules (for example: the scop, the computation of GloBE Income, the effective tax rate calculations, the allocation of top-up tax under the IIR, etc.).
More information on the consultation with respect to the secondary legislation to implement Pillar 2 in Australia and the consultation documents can be found here.
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