Australia Issues a Draft Law to Amend Global Minimum Tax Rules

On February 16, 2026, Australia issued the Taxation (Multinational—Global and Domestic Minimum Tax) Amendment (2026 Measures No. 1) Rules 2026 (the Exposure Draft) which proposes a series of amendments to Australia’s subordinate Pillar Two legislation—specifically, the Taxation (Multinational—Global and Domestic Minimum Tax) Rules 2024 (the Rules).

The amendments are to ensure the effective operation of Australia’s Domestic Top‑up Tax (DTT) and to incorporate OECD administrative guidance appropriately so Australia’s implementation remains consistent with the OECD GloBE Model Rules (as modified by the Commentary, Agreed Administrative Guidance and Safe Harbours Rules).

The Amending Rules would commence the day after registration, but would apply to Fiscal Years starting on and after January 1,  2024.

Foreign currency translation of Top‑up Tax amounts (new subsection 1‑25(6))

The Exposure Draft inserts a new rule for translating certain Top-up Tax amounts into Australian dollars where they are denominated in a foreign currency.

If an IIR Top‑up Tax Amount, Domestic Top‑up Tax Amount, or UTPR Top‑up Tax Amount for a Fiscal Year is denominated in a currency other than AUD, it must be converted using an exchange rate on the last day of the Fiscal Year from one of three sources:

-the RBA daily rate,

-the foreign currency’s central bank daily rate, or

-a publicly and commercially available market exchange rate.

This reflects the OECD 2025 Commentary, which recognises that once Top-up Tax amounts are computed in the UPE currency,  jurisdictions may choose a reasonable basis for translating the resulting liability into local currency – and identifies three options, including the rate on the last day of the Fiscal Year. Australia has chosen that option.

Domestic Top‑up Tax and Stateless Constituent Entities (amendments to section 2‑25 and subsection 2‑35(7))

The amendments to section 2‑25 and subsection 2‑35(7) are to clarify when DTT applies to Stateless Constituent Entities.

The changes narrow/clarify the scope of the DTT’s for stateless entities so that it is limited to stateless entities with a clear Australian nexus – particularly:

-stateless Flow‑through Entities created in Australia and treated

-stateless Permanent Establishments meeting paragraph 19(1)(d) of the Act, where the PE has a place of business (including deemed place of business) in Australia.

Joint Ventures: ensuring DTT can be collected from Stateless JV Entities (amendments to section 2‑25 and insertion into section 6‑75)

The Exposure Draft makes similar amendments in the JV context so that DTT can be properly collected from Stateless Joint Ventures and JV subsidiaries, including where the JV Entity is itself a Flow‑through Entity or Permanent Establishment.

Amendments to paragraph 2‑25(5)(a) (JV and JV Subsidiaries) to capture:

-JV/JV Subsidiary located in Australia; or

-a Flow‑through Entity created in Australia that is treated as a Stateless Constituent Entity under new paragraph 6‑75(2)(c); or

-an entity treated as a Stateless Constituent Entity that is a PE (with a place of of business) in relation to which paragraph 19(1)(d) applies.

Australia’s amendments to extend the stateless logic into the JV regime are directed to ensuring that there are no collection gaps where statelessness arises inside JV structures.