The Government has announced amendments to Australia’s global and domestic minimum tax rules to implement the OECD/G20 “side-by-side package” agreed by the Inclusive Framework on Base Erosion and Profit Shifting (BEPS) on 5 January 2026.

The reforms are intended to ensure Australia’s Pillar Two framework remains aligned with international standards and consistent with the approaches being adopted by other implementing jurisdictions.

The changes form part of broader international tax reform initiative aimed at addressing base erosion and profit shifting by large multinational enterprises.

What is changing?

While the Budget papers provide limited technical detail, the “side-by-side package” is expected to introduce a number of refinements to the existing Pillar Two regime, including:

• safe harbour provisions designed to reduce compliance burdens for certain groups;
• extensions to certain transitional relief measures currently available; and
• administrative amendments to improve consistency between jurisdictions.

When will the changes apply?

The amendments are proposed to apply from 1 January 2026.

Further legislative detail and supporting guidance are expected to be released in due course.

Want to know more?

As the Pillar Two framework continues to develop, multinational groups should closely monitor further guidance and legislative updates to assess the potential compliance, reporting and tax implications.

For a more detailed overview of the Pillar Two rules, check out our previous blog ‘Are Tax Haven’s Nearing Extinction?’:

If you want to know more about how these changes may impact you, please do not hesitate to reach out to your trusted Hall Chadwick advisor to find out more.