As 2025 unfolds, multinational enterprise (MNE) groups operating in or through Australia face an increasingly complex tax landscape. With the OECD’s global minimum tax (Pillar Two) taking effect, the ATO sharpening its compliance programs, and new reporting regimes creating unprecedented levels of transparency, the stakes for CFOs and tax leaders have never been higher.
In this article, we outline the most pressing developments shaping cross-border tax compliance this year — and what businesses should be doing now.
Key International and Domestic Tax Developments
1. Pillar Two: Global and Domestic Minimum Tax
- From 2025, MNE groups with global turnover of EUR 750m+ will face a minimum 15% effective tax rate in each jurisdiction.
- Australia’s rules include both global top-up tax and a domestic minimum tax, meaning local operations will be closely scrutinised.
- Lodgment requirements such as the Global Information Return (GIR) will create new compliance workloads.
2. Public Country-by-Country Reporting
- Australia’s regime now requires public disclosure of group revenue, profits, taxes paid, and business activities by jurisdiction.
- Unlike OECD CbC reporting, this data will be available to the public, raising reputational and investor-relations risks.
3. Hybrid Mismatch and Thin Capitalisation Rules
- The ATO continues to focus on financing structures that create deduction/non-inclusion outcomes.
- New EBITDA-based thin capitalisation rules require groups to re-test financing arrangements, with interaction points to transfer pricing documentation.
4. Withholding Tax on Intangibles and Digital Services
- Payments for software licences, cloud services, and intellectual property are increasingly being characterised as royalties.
- This expands the scope of withholding tax obligations, creating compliance risks if contracts and documentation are not aligned.
5. ATO’s Compliance Priorities
- The ATO has signalled strong focus on:
- Intangible arrangements and cross-border royalties.
- Financing and capital structures under the new thin cap regime.
- Pillar Two readiness, particularly for the largest groups.
- Public tax disclosures and governance frameworks.
- Intangible arrangements and cross-border royalties.
Why This Matters
For multinationals, the compliance environment in 2025 is about much more than ticking boxes. The combined effect of Pillar Two, public transparency, and domestic reforms is reshaping how cross-border groups are taxed — and how they are perceived by regulators, investors, and the public.
Tax leaders who act early will not only reduce risk but also position their organisations to manage costs, improve governance, and avoid reputational damage.
How Boa & Co. Can Help
At Boa & Co. Chartered Accountants, we are working closely with clients to:
- Assess the impact of Pillar Two top-up tax and model potential exposures.
- Prepare for public CbC reporting and develop a communications strategy.
- Review financing and IP arrangements to ensure compliance with thin cap and hybrid mismatch rules.
- Strengthen governance and documentation in anticipation of ATO scrutiny.
- Manage withholding tax risks in software, cloud, and intangible-related payments.
The Bottom Line
2025 marks a turning point in global taxation. With greater transparency, tighter rules, and landmark international reforms, MNEs must adapt quickly to safeguard compliance and protect reputation.
📩 Contact Boa & Co. Chartered Accountants today to discuss how these developments affect your business:
1300 952 286
[email protected]
www.boanco.com.au
Stay prepared. Stay compliant. Stay ahead.