Australia’s first Pillar Two returns due by 30 June 2026.

Multinational groups operating in or through Australia are entering the active compliance phase of Pillar Two, with the first GloBE Information Returns due by 30 June 2026 and the safe harbour news of the Australian Taxation Office (ATO) now finalised.

What was once a policy discussion has now become a live reporting obligation, and affected groups should ensure they are fully prepared for the first filing cycle.

Australia strengthens global tax transparency by signing the GIR MCAA

On 28 January 2026, Australia signed the Multilateral Competent Authority Agreement on the Exchange of GloBE Information, known as the GIR MCAA. The agreement operates within the OECD’s base erosion and profit shifting framework and enables participating jurisdictions to exchange GloBE Information Returns directly with one another.

By signing, Australia joins a growing number of jurisdictions committed to coordinated enforcement of the 15% global minimum tax under Pillar Two. The ATO’s global and domestic minimum tax guidance sets out Australia’s domestic implementation of these rules in detail and provides practical direction for affected groups.

The practical effect of the GIR MCAA is significant. Tax authorities will now have direct visibility over the GloBE positions that multinational groups file in other signatory jurisdictions. This exchange of information increases transparency and raises the importance of consistency across all jurisdictions where a group operates. Any discrepancies between filings may prompt enquiries or further review, making alignment of global reporting positions a critical compliance priority.

Which multinational groups fall within scope?

The Pillar Two rules apply to multinational groups with consolidated annual revenue exceeding EUR 750 million. Affected groups are subject to the Income Inclusion Rule and related provisions, generally for fiscal years beginning on or after 1 January 2024, with the first returns due by 30 June 2026.

Importantly, Pillar Two operates on a jurisdictional basis. Even where a group’s overall effective tax rate appears adequate, a low-taxed entity or jurisdiction within the structure can still give rise to a top-up tax liability in Australia. This means that exposure cannot be assessed at a high level alone. Groups must analyse effective tax rates separately in each jurisdiction in which they operate and determine whether any top-up tax may arise.

For many organisations, this represents a shift in approach. Traditional global tax rate analysis may not be sufficient. Instead, detailed modelling and data reconciliation at entity and jurisdiction level will be required to ensure compliance.

How the ATO’s safe harbour rules may ease compliance

The ATO has finalised side-by-side safe harbour rules for fiscal years starting on or after 1 January 2026. These rules are designed to reduce the compliance burden for groups that are unlikely to have a material top-up tax liability, allowing them to apply simplified calculations rather than the full GloBE computation in qualifying cases.

The safe harbour provisions sit alongside the substantive Pillar Two framework rather than replacing it. Groups must assess eligibility on a jurisdiction-by-jurisdiction basis and maintain sufficient documentation to support their position. Qualifying for a safe harbour still requires reliable and complete financial and tax data across all relevant entities, careful testing of the applicable thresholds in each jurisdiction and clear internal governance processes with documented decision making.

While the safe harbour can meaningfully reduce the complexity of compliance, it is not a blanket exemption. It must be actively assessed and supported with evidence. Groups that assume eligibility without proper analysis may face challenges if reviewed by the ATO or another tax authority through the GIR information exchange framework.

What this means in practice

With the deadline approaching, multinational groups should move from preparation to action. The key priorities are:

• Reviewing effective tax rates across every jurisdiction to identify potential top-up tax exposure
• Ensuring the financial and tax data required for the GloBE Information Return is complete, accurate and consistent
• Assessing safe harbour eligibility on a jurisdiction-by-jurisdiction basis for relevant fiscal years
• Coordinating with advisers and in-house teams across jurisdictions, particularly given that GIR data will be exchanged under the GIR MCAA
• Putting clear governance frameworks and documentation in place to support the positions taken in each return

What affected groups can do now

The regulatory environment around Pillar Two will continue to evolve as more jurisdictions exchange GloBE data and enforcement activity increases. Acting early reduces risk and provides time to address data gaps, assess safe harbour eligibility and coordinate positions across jurisdictions before the deadline arrives.

For affected multinational groups, the filing date marks the beginning of a new era of global minimum tax compliance, where transparency, consistency and proactive governance will be central to managing risk effectively.