The GMT, implemented in Australia through the Global and Domestic Minimum Tax law, sets a minimum effective tax rate of 15% for large MNE groups. It aims to reduce tax base erosion and profit shifting by ensuring companies pay a minimum level of tax regardless of where they operate.

This tax applies to constituent entities of MNE groups with annual global revenues of €750 million or more, as reflected in their consolidated financial statements. If your company has CbCR obligations, the company is most likely to be within the GMT scope. If the effective tax rate (ETR) in a jurisdiction falls below 15%, top-up taxes may apply through:

• Income Inclusion Rule (IIR)
• Undertaxed Profits Rule (UTPR)
• Domestic Minimum Tax (DMT)

GMT rules affect:

• Australian headquartered multinationals
• Foreign MNEs with Australian operations
• CFOs, Tax Directors, and Finance Teams of large companies

Why it matters:

• Non-compliance risks significant penalties
• Complex documentation and filing requirements
• Top-up tax liabilities affect cash flow and planning
• Interacts with transfer pricing, CFC, hybrid mismatch, and foreign income tax offset rules

Example: Australian Headquartered MNE If an Australian-headquartered MNE does not nominate a Designated Local Entity (DLE), each Australian group entity must individually lodge the GloBE Information Return (GIR), the Australian IIR/UTPR Tax Return (AIUTR), and the Domestic Minimum Tax Return (DMTR).

Example: Foreign MNE with Australian Subsidiary A foreign parent files the GIR abroad (in a jurisdiction that has a Qualifying Competent Authority Agreement (QCAA) with Australia). However, all Australian entities must still file the AIUTR and DMTR locally and provide a foreign lodgment notification.