On October 4, 2022, the Australian Treasury issued a consultation paper
, primarily on Pillar Two
of the OECD Two-Pillar Solution. It includes some details on Pillar One
, but acknowledges that Pillar One is still subject to discussion internationally and a number of key design elements are being debated.
Therefore, the consultation paper is primarily focused on Pillar Two although it does note under the current design of Pillar One, no Australian headquartered multinationals would be subject to the Amount A profit allocation
given the EUR 20 billion and 10 per cent profitability thresholds.
It requests feedback on 40 questions relating to the implementation of Pillar Two in Australia. The consultation runs until November 1, 2022.
Many of the questions are similar to issues raised in other consultation/policy papers (eg the UK and Jersey
) and cover issues such as whether a qualifying domestic minimum tax
should be implemented, the method of applying the under-taxed payment rule
and whether the GloBE Rules should be separate legislation or included in the existing income tax law.
However, the consultation paper does request feedback on how the implementation should interact with specific features of Australia’s income tax system (eg franking credits and the CFC/Hybrid Mismatch Rules).