Latest Steps on Implementing GloBE Tax

Three key steps for enacting the 15% worldwide minimum tax in Australian domestic law have now happened.  First, the final legislation was passed in the legislative flurry at the end of 2024. Secondly, the accompanying rules have now been registered.  This means the complete legislative package is now in place (though it is highly likely the package will be amended soon, and often). Finally, the Undertaxed Profits Rule, the start of which was deferred for 1 year, began operation for some groups on 1 January 2025. 

Legislation

The Parliament passed the three operative Bills to enact the minimum tax regime on 27 November 2024.  The Bills all received the Royal Assent on 10 December 2024:

• Taxation (Multinational – Global and Domestic Minimum Tax) Imposition Act 2024 – the Act imposing the three taxes (the Income Inclusion Rule, the Domestic Top-up Tax and the Undertaxed Profits Rule);
• Taxation (Multinational – Global and Domestic Minimum Tax) Act 2024 – the equivalent of an assessment Act; and
• Treasury Laws Amendment (Multinational—Global and Domestic Minimum Tax) (Consequential) Act 2024 – consequential amendments to the ITAA 1997 and the Tax Administration Act.

There is also:

• original Explanatory Memorandum; and
• Supplementary Explanatory Memorandum.

Rules

Most of the detail needed to make the tax regime operative is contained in the Rules. They were registered on the Federal Register of Legislation on 23 December 2024:

• Taxation (Multinational—Global and Domestic Minimum Tax) Rules 2024.

The rules are accompanied by a lengthy explanatory statement:

• Taxation (Multinational—Global and Domestic Minimum Tax) Rules 2024 – Explanatory Statement.

UTPR

The Income Inclusion Rule and the Domestic Top-up Tax regime began operation for income years starting on or after 1 January 2024, but s. 5(2) of Taxation (Multinational—Global and Domestic Minimum Tax) Act 2024 deferred the start of the UTPR by 1 year, to income years starting on or after 1 January 2025. As that date has now passed, the full suite of measures in the minimum tax regime is now in operation for many early balancing companies, with the remaining affected groups to follow in due course.