On 4 July 2024, Australia made a further step towards the implementation of Pillar Two, introducing the Bills into Parliament with accompanying Explanatory Memorandum in respect of Pillar Two Primary Legislation.

The Tax Insight provides our key observations that are relevant for Australian taxpayers.

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On 26 June 2024, the Full Federal Court handed down a 2-1 majority decision in favour of the taxpayer in PepsiCo, Inc v Commissioner of Taxation [2024] FCAFC 86. The decision overturned the November 2023 first instance decision which upheld the Commissioner’s position.

This is a significant case given the ATO focus on intangible arrangements and in as much as it provided the most authoritative judicial analysis to date of both the Diverted Profits Tax (DPT) and 2012 amendments to the Australian GAAR following an earlier series of Court decisions on Part IVA that went against the Commissioner. 

The Tax Insight provides our initial preliminary comments on the decision. 

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On 5 June 2024, the Australian Government introduced a new Bill into Parliament: Treasury Laws Amendment (Responsible Buy Now Pay Later and Other Measures) Bill 2024, which contains various measures including Public Country by-Country Reporting (Public CbC Reporting) at Schedule 4. 

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On 8 April 2024, the Treasury Laws Amendment (Making Multinationals Pay Their Fair Share—Integrity and Transparency) Bill 2023 (Multinational Tax Bill or Bill) which introduces the new interest limitation rules received Royal Assent.

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On 21 March 2024, Treasury released the highly anticipated Exposure Draft legislation for the implementation of Pillar Two in Australia. The package of Exposure Draft legislation includes both primary and subordinate legislation, along with accompanying explanatory materials and a discussion paper for stakeholder consultation and feedback.  

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On 12 February 2024, the Australian Government released new draft legislation for certain multinational entities that operate in Australia to require the public release of certain tax and other information on a jurisdiction-by-jurisdiction basis together with a statement on their approach to taxation, for reporting periods starting on or after 1 July 2024.

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The ATO has finalised and released its compliance approach to intangibles migration arrangements involving international related parties in PCG 2024/1.

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