The Pillar Two exposure is moving from the number to the filing.

The ATO turns to lodgment mechanics and confirms that GloBE joint ventures sit inside the Australian filing perimeter; Qatar and the United Arab Emirates both put hard registration dates on Pillar Two, and neither depends on whether any top-up tax is payable; and mandatory binding arbitration opens on the Australia to Canada corridor, reaching back to cases presented from December 2019.

The ATO updated its guidance on lodging, paying and other obligations for Pillar Two on 4 August 2026, and updated the Pillar Two combined global and domestic minimum tax return online form instructions for 2024 on the same day, adding a new appendix on GloBE joint ventures. Neither changes the ATO's position on any substantive question; both go to whether a group can get a return in and have it accepted.

On the GloBE Information Return, the guidance sets out that the return must be lodged as a validly generated XML file, normally produced by tax reporting or accounting software, built to the GloBE Information Returns OECD 2026 specification version 1.0 published on the ATO's software developers site. Every GloBE Information Return lodged in Australia requires a Bulk Business Document Message wrapper to be added to the XML before lodgment. Lodgment is through the file transfer facility in Online services for business or Online services for agents. A taxpayer with a tax file number may nominate a tax agent to lodge on its behalf, and where the agent cannot add the client the guidance directs groups to the ATO's business line or to the Pillar Two project mailbox.

The point most likely to cause difficulty is the validation sequence. On lodgment, the channel returns a submission message, and that message is not confirmation that the file has been accepted. The file is validated after submission, and a return that fails validation has not been lodged for the purposes of the obligation even though the group holds a submission acknowledgement. For a group whose deadline falls on the day it lodges, the practical consequence is that the file needs to go in with enough time to fail validation, be corrected and be resubmitted. The GloBE Information Return cannot be deferred, so this is not a risk that can be managed after the event.

The expansion on GloBE joint ventures is the substantive part of the update. The guidance confirms that a GloBE joint venture and a GloBE joint venture subsidiary must lodge a domestic minimum tax return under section 127-55 of Schedule 1 to the Taxation Administration Act 1953, and may be liable for Australian domestic minimum tax, with a Commissioner's legislative instrument to set out the circumstances in which a GloBE joint venture or joint venture subsidiary need not lodge. The updated guidance does not identify that instrument, so a group whose joint venture may fall within an exclusion cannot yet confirm it from the guidance alone. Because a joint venture is by definition not consolidated line by line into the group accounts, joint ventures have tended to be dealt with late in Pillar Two implementation projects, and often on the assumption that the parent group's filing covers them. The ATO's guidance does not support that assumption in Australia. The new material on deregistered entities and on credit transfer and refund requests is narrower but useful, particularly for groups that have restructured since the registration obligation commenced.

Read alongside the Australian update, HMRC's transitional approach to central GloBE Information Return filing and exchange, published on 29 July 2026, matters to any Australian-headed group with United Kingdom constituent entities. Where the group's filing deadline falls no later than 31 December 2026, and the return is centrally filed in a participating jurisdiction, and HMRC receives the information from the overseas authority within six months of the filing deadline, HMRC will not enforce United Kingdom local filing and will reduce certain penalties to nil. The condition is a timely Overseas Return Notification specifying the date the return was filed overseas. Australia is on the participating jurisdictions list, so an Australian-headed group filing centrally with the ATO can rely on HMRC not enforcing United Kingdom local filing, provided the notification goes in. HMRC has also said that where software problems prevent overseas filing before the notification is due, the notification should still be filed on time using a notional filing date of 1 January 2026, and that it will initially reduce the late filing penalty to zero where a timely notification names a participating jurisdiction. If HMRC does not receive the centrally filed return within six months it may enforce local filing and penalties may accrue.

What clients should do: treat the notification obligations in each jurisdiction as separate deliverables owned by a named person, rather than as a by-product of the central filing. The Overseas Return Notification is a live United Kingdom obligation now, and the relief turns on it being lodged on time and naming the right jurisdiction, not on any tax being paid. On the Australian side, test the XML production and validation path well before the deadline rather than on it. And confirm whether the group has any GloBE joint venture or joint venture subsidiary, because if it does, that entity may have its own Australian return to lodge and it will not appear on a consolidation-based entity list.

Two Gulf jurisdictions moved within days of each other, and in both cases the obligation created is a registration obligation rather than a tax one.

Qatar's General Tax Authority activated the Global and Domestic Minimum Tax registration service on the Dhareeba platform on 2 August 2026, together with a non-binding Framework Guide on Registration and Compliance. The legal basis is Law No. 22 of 2024, which amended Income Tax Law No. 24 of 2018, and Council of Ministers Resolution No. 2 of 2026. Groups with fiscal years beginning in 2025 must complete initial registration within three months from the date the Authority confirmed the platform operational, which places the deadline on or before 2 November 2026. For fiscal years beginning in 2026 or later, a group first coming into scope registers within six months after the relevant fiscal year end, and registered groups then renew annually within the same six-month window even where there has been no liability and no structural change.

Three features of the Qatari design deserve attention. First, registration is required even where no top-up tax liability is expected, so a group whose Qatari operations comfortably clear the substance-based income exclusion still has to register. Second, in-scope joint venture groups must register separately from the group to which they belong, which means the Qatari registration population may be larger than the group's Pillar Two constituent entity list suggests. Third, each group must appoint a designated local entity, and where there is only one Qatari constituent entity that entity is the designated local entity by default. The Authority may also register a group on its own initiative using exchanged tax information or third-party data, so failing to register does not keep a group out of the system.

The penalties are modest individually and add up quickly. Failure to register attracts QAR 20,000, as does non-compliance with the GloBE Information Return notification requirements. A late domestic minimum tax return or income inclusion rule return attracts QAR 500 per day capped at QAR 180,000, and late payment attracts 2 per cent of the unpaid top-up tax per month or part month, capped at the amount of tax due. There is transitional relief: for fiscal years beginning on or before 31 December 2027 and ending no later than 30 June 2029, general penalties may be cancelled where the group demonstrates it took reasonable measures to comply, though not in cases of evasion, fraud, deliberate misrepresentation or intentional non-compliance. Returns are due within 15 months of fiscal year end, extended to 18 months for the transition year, and records must be kept for at least five years. Where the GloBE Information Return is filed outside Qatar under an eligible exchange of information arrangement, the notification information is provided through Dhareeba at registration or annual renewal, and no separate notification submission is required.

The United Arab Emirates approached the same problem through Federal Tax Authority Decision No. 12 of 2026, issued on 16 July 2026 but not published until 4 August. It applies to fiscal years starting on or after 1 January 2025 and sits under Cabinet Decision No. 142 of 2024. The core rule is registration no later than seven months from the end of the first fiscal year in which the entity is in scope. The transitional rule is the one most calendar-year groups will need: an entity with a fiscal year ending before 30 April 2026 must register by 30 November 2026, which captures a December 2025 year end.

The Decision also builds out the exit side, which much Pillar Two commentary has not dealt with. Deregistration must be applied for within six months from the earlier of the date the entity ceases to exist and the end of the fiscal year in which it leaves an MNE group and consequently falls out of scope, and an entity that ceased to exist before 30 June 2026 must apply by 31 December 2026. Deregistration is approved only once all outstanding top-up tax and penalties are paid and all required returns and information returns filed, so a dormant entity cannot simply be wound out of the register. Where a group ceases to be in scope for a tested fiscal year, a member entity submits an out-of-scope notification within six months of the end of that year, and that notification is valid for the tested year and the following four consecutive fiscal years. If the entity comes back into scope while the notification is still valid, an in-scope notification is due within seven months of the end of the relevant year. Where the entity remains out of scope for five consecutive fiscal years it must apply for deregistration within six months of the end of the fifth year. A domestic designated filing entity may handle registration, deregistration and notifications on behalf of members of a domestic main group, a domestic minority-owned subgroup, a reverse hybrid entity or a domestic joint venture group.

What clients should do: run the group's constituent entity list against both jurisdictions and treat this as a registration exercise rather than a computation exercise. For Qatar, confirm whether any joint venture group has a Qatari constituent entity, joint venture or joint venture subsidiary, because that population registers separately and is easy to miss. For the United Arab Emirates, work out whether the 30 November 2026 transitional date or the seven-month general rule applies to the group's own fiscal year, and check whether any Emirati entity has been wound up or is being wound up, since the deregistration path now has its own deadline and requires the filing record to be clean first. In both cases, decide who the designated local entity or domestic designated filing entity will be, and put it in writing before the registration window rather than during it.

Australia and Canada have signed a memorandum of understanding establishing the mode of application of the arbitration process in Part VI of the Multilateral Instrument. Australia signed on 20 July 2026 and Canada on 31 July 2026, and the memorandum took effect on 31 July 2026. It was signed under article 24 of the Australia to Canada income tax treaty of 1980, as amended by the 2002 protocol and as modified by article 16 of the Multilateral Instrument on the mutual agreement procedure and paragraph 10 of article 19 on mandatory binding arbitration. Both countries have made reservations under paragraph 2(a) of article 28 as to the scope of cases eligible for arbitration, and the competent authorities may modify or supplement the memorandum by mutual consent in writing.

The temporal reach is what gives this immediate practical effect. Part VI will have effect for cases presented to a competent authority of a contracting state on or after 1 December 2019, which reaches back close to seven years. That date is not itself new: it follows from article 36(1)(a) of the Multilateral Instrument and the later of the two entry into force dates, which for Canada was 1 December 2019. What the memorandum supplies is the mode of application required by article 19(10), without which arbitration was not operable. It is also worth noting article 36(1)(b), under which Part VI can take effect for cases presented before that date once both states notify the Depositary of their mutual agreement together with the dates on which such cases are to be treated as presented, so groups with older stalled cases should read what the notification actually says rather than assuming December 2019 is a hard floor.

For groups with Canadian operations, the categories most likely to be affected are transfer pricing adjustments on goods, services and intra-group financing, and permanent establishment characterisation, which are the two areas where the Australian and Canadian administrations have historically been slowest to converge. Arbitration probably changes behaviour less because cases go to arbitration than because its availability alters the incentive on both competent authorities to reach agreement inside the mutual agreement procedure, the alternative being a determination neither of them controls.

The Indian data released this week gives some sense of the direction of travel where a comparable mechanism and a resourced programme are in place. India's pending mutual agreement procedure inventory fell from 947 in 2020 to 365 at the end of 2025, and the average resolution time for transfer pricing cases in that programme fell from 64.86 months in 2016 to 39.78 months. The Indian advance pricing agreement figures are set out under India below.

Two caveats are worth carrying. The first is that the reservations under article 28(2)(a) matter, and they are not symmetrical: Australia's reservation excludes cases involving its general anti-avoidance rules, while Canada's operates as a positive limitation of eligible issues to a specified list. A case may therefore fall outside the eligible scope for reasons that have nothing to do with its merits, so the memorandum and the synthesised text need to be read against the specific facts before any expectation is set. The second is that arbitration is not a substitute for the mutual agreement procedure. The case still has to be presented, the two-year period still has to run, and the documentary record still has to support the position. A case that was thinly documented in 2020 will not be much helped by a mechanism that only became available in 2026.

What clients should do: review any open Australian or Canadian mutual agreement procedure case presented on or after 1 December 2019, and take a view on whether it now falls within the eligible scope after the reservations. Where a case has stalled, it is worth asking the competent authority directly whether the memorandum changes the timetable. For groups that have been absorbing an unrelieved double tax position on the Australia to Canada corridor rather than presenting a case, because the prospect of resolution looked poor, the calculation has changed and it is probably worth revisiting. And for anyone with a live Australian transfer pricing risk review touching Canada, the availability of arbitration is a relevant consideration in deciding whether to settle domestically or preserve the treaty route.

In Evolution Mining Ltd v FC of T [2026] FCA 935, reported at 2026 ATC 21-030, the Federal Court answered a separate question in the taxpayer's favour, holding that a head company's purported choice, made in its 2014 income tax return, to cancel the automatic transfer of losses of a subsidiary that joined the consolidated group in November 2011 was ineffective for the purposes of section 707-145 of the ITAA 1997. The subsidiary was Conquest Mining Limited, which joined on 2 November 2011, and more than $31 million of losses from the 2007 to 2010 income years had transferred automatically on joining. Costs were reserved and the proceeding was listed for further hearing in August 2026 on the remaining issues, and the Commissioner has since been reported as appealing the construction question to the Full Federal Court.

The mechanics are worth restating because they are counter-intuitive. When an entity joins a consolidated group, Division 707 transfers its losses to the head company automatically, subject to the transfer tests, and the transferred losses then become available to the group only through the available fraction mechanism in Subdivision 707-C. Section 707-145 allows a choice to be made to cancel the transfer of a loss, with the effect that the loss is available to neither the joining entity nor the head company. Groups make that choice for a range of reasons, including to avoid the compliance cost of maintaining a loss bundle and available fraction for a loss of little practical value, and occasionally to simplify a subsequent disposal. The choice is not a free option available indefinitely, and the timing of the choice appears to be where the case bites.

It is worth being clear about the posture, because it is not the one a reader might expect. The Commissioner argued that the 2014 cancellation choice was effective, which would have extinguished the losses. The taxpayer argued it was not. The Court answered the separate question in the negative, so the losses had transferred automatically in November 2011 and remained transferred, and the taxpayer succeeded by retaining them.

For groups with tax consolidated structures, the point to take from the case at this stage is a records point rather than a technical one. Many groups have loss positions that depend on a cancellation choice having been made, or on it not having been made, in a year that is now well outside the period of review, and in a good number of cases the file will not show clearly which return the choice appeared in. Where a group has been treating a bundle of losses as cancelled, and the choice was in fact made in a later year's return, the losses may still be on foot, with an available fraction that has never been calculated and a set of prior year returns that may not reflect the position. The reverse case is equally awkward: a group relying on transferred losses where a valid cancellation choice was in fact made earlier than the file suggests.

There is a second consequence worth flagging. Because the available fraction limits the rate at which transferred losses can be used, a loss bundle that turns out to have transferred after all is not simply a windfall. It carries a testing and record-keeping obligation stretching back to the joining time, and reconstructing a modified market value at a joining time in November 2011 is not a trivial exercise.

What clients should do: for any subsidiary that joined a consolidated group with losses, locate the return in which the cancellation choice was made, or establish positively that none was made. Do this from the lodged returns themselves, and note which income year each choice appears in, because on the reported facts that was the point in issue. Where the choice appears in a return for a year later than the joining year, test whether it was effective before relying on it, and treat the position as open pending the balance of the proceeding and any appeal. Groups in the middle of due diligence on an Australian target with historical consolidated losses should add the timing of any section 707-145 choice to the request list, because the answer may change the value attributed to the losses in the model.

Malaysia's Inland Revenue Board issued transfer pricing guidelines on controlled financial transactions covering intra-group loans on 30 July 2026, to be read with the Income Tax Act 1967, the Income Tax (Transfer Pricing) Rules 2023 and the Malaysia Transfer Pricing Guidelines 2024. For Australian advisers, most of the analytical content will be familiar, though the enforcement mechanics may not be.

The guidelines begin with accurate delineation, and require the debt or equity question to be answered before any arm's length interest rate is established. A purported loan that lacks the characteristics of a genuine loan may be recharacterised as an equity contribution, with the consequence that interest deductions are denied and additional tax and surcharges may follow. The Director General is given an express power to substitute or impute an interest rate. The analysis is two-sided, taking both the lender's and the borrower's perspective, with the borrower's creditworthiness a key factor, and the guidelines expressly recognise that implicit support arising from membership of an MNE group may improve a borrower's credit profile and reduce its borrowing costs without any additional payment or compensating transfer pricing adjustment. On method, the comparable uncontrolled price method is preferred where reliable comparable loan data exists, and internal comparables may include independent loans received or granted by the taxpayer or by related group entities, though the guidelines say an MNE group's average external borrowing rate is generally unsuitable as an internal comparable. Where no comparable uncontrolled transactions exist, a cost of funds method may be used, being the lender's borrowing cost plus a risk premium and a profit margin. There is a simplified option: eligible taxpayers may apply designated Bank Negara Malaysia rates, being the deposit rate or the average lending rate, without a detailed comparability analysis, subject to eligibility criteria understood to include a cap of MYR 50 million on the aggregate intra-group loan book.

Set against Australian practice, the substance of this is close to what Subdivision 815-B and the Division 974 debt and equity rules already require, and the implicit support treatment is consistent with the position the ATO has taken. What differs is the documentation timetable. Contemporaneous transfer pricing documentation must be prepared, is not filed with the return, and must be produced within 14 days of the Director General serving written notice, with failure capable of constituting an offence under section 113B of the Income Tax Act 1967. Fourteen days is unlikely to be enough time to build a financing file, and may not be enough to locate an existing one. Taxpayers not required to prepare contemporaneous documentation still have to comply with the arm's length principle, and the guidelines also address section 140B, which deals with loans or advances to directors.

The point of general application is that a financing structure which survives Division 974 and the Division 820 tests in Australia will not automatically survive the Malaysian analysis, because the guidelines give the Director General an express power to recharacterise and to substitute a rate, exercisable at the level of the individual loan. Groups that have priced a regional financing arrangement once and pushed the same rate through every borrower jurisdiction are the ones most likely to find a mismatch.

What clients should do: if the group has Malaysian borrowers or a Malaysian on-lending entity, bring the financing documentation forward rather than treating it as a year-end task, and specifically test whether the aggregate loan book sits under the MYR 50 million threshold for the simplified Bank Negara rates, since that would remove a good deal of work. Where the group has priced regional financing on a single benchmark, check that the delineation and creditworthiness analysis holds at the level of each borrower, not just at regional level. And note the two statutory related-party rate limits published this week, set out under Colombia and France below, since both are jurisdiction-specific caps rather than pricing conclusions and both are easy to breach inadvertently.

Korea. The Ministry of Economy and Finance released the 2026 tax law amendment proposal on 3 August 2026, and it is the most substantial national response yet to the January 2026 side-by-side package. Three things landed. Four new safe harbours are introduced within the Korean Pillar Two framework, being a side-by-side safe harbour, an ultimate parent entity safe harbour, a substance-based income exclusion safe harbour and a simplified effective tax rate safe harbour. A qualified domestic minimum top-up tax is expressly brought within the scope of foreign taxes eligible for a Korean foreign tax credit, resolving a question left open because a top-up tax is computed under separate rules rather than under the general foreign corporate income tax regime. And the controlled foreign company low-tax threshold, currently 70 per cent of the highest Korean corporate rate and so 17.5 per cent against a top rate of 25 per cent, is reduced to 15 per cent. Most measures are expected to take effect from 1 January 2027 subject to National Assembly approval. For Australian groups with Korean-held offshore structures, the threshold change removes the 15 to 17.5 per cent band in which Korean controlled foreign company attribution applied without any GloBE top-up, and aligns the two triggers so that low-taxed income is more likely to attract both at once. It would be sensible to re-run the Korean controlled foreign company screen against the group's low-taxed jurisdictions before the 2027 commencement, since income that previously attracted attribution alone may now attract both, and income in the 15 to 17.5 per cent band may fall out of the Korean net entirely.

European Union: transfer pricing adjustments and VAT. The minutes of the 128th meeting of the VAT Committee, held on 17 November 2025, were released on 23 July 2026 and contain the most useful official commentary yet on the interaction between transfer pricing and VAT following the Court of Justice decision in Case C-726/23 Arcomet Towercranes. In Working Paper 1114, Commission services concluded that transfer pricing adjustments may constitute consideration for taxable supplies where an identifiable service exists, the remuneration is determined using OECD transfer pricing methods, and it is contractually agreed in advance. They also confirmed that input VAT may be deducted where sufficient evidence demonstrates the existence of the services and their use for taxable transactions. Delegations questioned how widely the judgment should be applied and whether guidelines are needed at this stage, and Commission services will consider whether draft guidelines are appropriate, so this is the Commission's view rather than settled law. For Australian groups the read-across is to the GST treatment of year-end transfer pricing adjustments on intra-group service arrangements. Where the group makes year-end service adjustments, it would be sensible to record against each one whether an identifiable service exists, whether the remuneration was determined by an OECD method, and whether it was contractually agreed in advance, because those are the three conditions Commission services applied.

Poland. The Minister of Digital Affairs published a draft bill introducing a digital services tax on 31 July 2026, expected to apply from 1 January 2027. The rate is 3 per cent, and it applies to entities or consolidated accounting groups, regardless of tax residence, that in the preceding reporting period exceeded both a EUR 1 billion worldwide revenue threshold and a PLN 25 million threshold for taxable revenue derived from Poland. Three categories of service are in scope: targeted behavioural online advertising displayed through digital interfaces; multi-sided digital platforms enabling user interaction or facilitating direct transactions between users; and the sale, licensing or other commercial transfer of user data generated through user activity. Revenue is allocated to Poland by user location, determined using information available in the ordinary course of business including internet protocol addresses, media access control addresses and telecommunications network data. There is a relief mechanism: the tax is reduced by Polish corporate income tax due, plus eligible research and development expenditure and qualifying capital investment incurred in Poland, and where Polish corporate income tax exceeds the digital services tax no digital services tax is payable. Taxpayers without a registered office or permanent establishment in Poland must appoint a tax representative, members of a consolidated group are jointly and severally liable, and registration is required within 30 days after the end of the first reporting period, with a penalty of up to PLN 500,000 for failure. When the measure was first announced in 2025 the global threshold was EUR 750 million, so it has been deliberately lifted above the Pillar Two population rather than aligned with it.

Italy. The Council of Ministers approved an omnibus tax corrective decree on 4 August 2026 which transposes the latest international agreements within the global minimum tax framework, and separately approved a draft legislative decree transposing article 2 of Directive (EU) 2025/516 on supplies made through platforms and electronic marketplaces. The same decree carries a number of unrelated measures, including changes to the fringe benefit treatment of employer-provided cars, an extension of the deadline for exercising the right to deduct VAT, amendments to the anti-abuse rules on tax loss carry-forwards and an increase in withholding tax on dividends paid to European Union pension funds. Separately, a first-instance decision of the Milan Tax Court, reported this week, held that revenues from direct online sales by the operator of a digital platform are not subject to the Italian digital services tax, because article 1(37)(b) of Law No. 145/2018 requires the digital interface to perform an intermediation function enabling users to interact, and a platform used merely as a sales channel falls outside the charge. The taxpayer sold both as a marketplace intermediary, which it accepted was taxable, and as principal under consignment arrangements where it concluded the contract in its own name, set the price and bore credit, inventory and deterioration risk. The Court adopted a functional approach, so the same platform may have taxable and non-taxable revenue streams requiring transaction-by-transaction analysis.

Monaco. Bill No. 1,129, dated 14 July 2026 and tabled at the National Council in late July, sets out the full design of a Monegasque domestic minimum top-up tax. It introduces a domestic top-up tax only, leaving the income inclusion rule and the undertaxed profits rule open for possible later introduction, and it is drafted to follow the GloBE model rules and agreed administrative guidance with the objective of achieving qualified status. Scope is fiscal years beginning on or after 31 December 2026, for constituent entities of MNE groups with annual revenue of at least EUR 750 million in at least two of the four preceding fiscal years. Unlike the European Union approach, large-scale domestic groups are not in scope. The tax is not deductible against any other Monegasque tax, and Monaco declined to permit local accounting standards on the basis that they are not recognised by the OECD as acceptable. Remaining GloBE rules, including restructurings, transitional rules, safe harbours and the treatment of tax credits, are to be supplemented by sovereign ordinances. A single designated local entity files, within 15 months of fiscal year end, with the GloBE Information Return due in the same period and central filing recognised where a qualifying competent authority agreement is in place. The penalty scale is the notable feature: registration and designated local entity failures attract EUR 5,000 to EUR 10,000 with an annual cap of EUR 1 million per group; a late return attracts a 10 per cent surcharge rising to 40 per cent and then 80 per cent after successive formal notices; failure to file a GloBE Information Return attracts EUR 100,000 per affected entity capped at EUR 1 million per group per fiscal year; and an inaccurate return made in bad faith attracts 40 per cent, rising to 80 per cent for fraudulent conduct.

Portugal. Further to last week's note on the Modelo 64 ordinance, three points have firmed up. The ordinance completes the third and final declarative obligation under the global minimum tax regime established by Law No. 41/2024. The form requires identification of the group's GloBE Information Return, including the jurisdiction, filing date and return number, so a Portuguese entity cannot complete its own return without those particulars coming from group. And the live deadline is 30 September 2026 for both Modelo 63 and Modelo 64, for fiscal years ending between 31 December 2024 and 31 March 2025. That date reflects an extension rather than the ordinary rule: the general deadline is 15 months after fiscal year end, extended to 18 months for the first year the regime applies, which would put a December 2024 year end at 30 June 2026, and Portugal has pushed the first-year date out by three months.

Netherlands. Two items. Dutch constituent entities of in-scope groups with a December 2024 year end face a top-up tax return deadline of 31 August 2026, being 17 months extended to 20 for the first year the regime applies, and it is the earliest live Pillar Two filing date in the calendar below. Separately, on 3 August 2026 the tax authority clarified the 34-day threshold introduced by the 2025 protocol to the Germany to Netherlands income tax treaty, which from 1 January 2026 allows cross-border employees to work up to 34 days outside the normal state of employment without disturbing the treaty allocation, with the ordinary rules applying to the entire working pattern for the calendar year once the threshold is exceeded. The threshold applies per employee rather than per employment relationship, so days across multiple employers in the same state aggregate; it is not confined to days worked at home, so an on-site conference or short secondment counts; a day counts where a minimum of 30 minutes of work is performed; and separate thresholds apply for private-sector employees under article 14 and government employees under article 18, tested separately. The authority also published three determinations on 30 July 2026 on the comparability of foreign legal forms, holding a Barbados Limited Company and a Curaçao naamloze vennootschap each comparable with Dutch public and private companies, and a Spanish Fondo de Capital Riesgo not directly comparable to any Dutch entity treated as a separate taxable entity.

Canada. Two consultations opened on 23 July 2026 and both close on 4 September 2026. The first is a draft amendment to the definition of deduction or non-inclusion arrangement in subsection 47(1) of the Global Minimum Tax Act, which broadens the circumstances in which an intra-group financing or investment arrangement must be neutralised when applying the transitional country by country reporting safe harbour. It captures arrangements entered into after 15 December 2022 where a constituent entity provides credit to or invests in another group constituent entity, producing a financial statement expense or loss with no commensurate revenue increase and no reasonably expected commensurate increase in taxable income over the life of the arrangement, and continues to exclude qualifying tier one capital issued for banking regulatory purposes. It applies to fiscal years beginning on or after 31 December 2023, so it is retrospective. The second is a broader package which includes a second set of legislative amendments addressing hybrid mismatch arrangements consistent with Action 2 of the BEPS project, treatment of investment income earned by a foreign affiliate from assets backing Canadian insurance risks as foreign accrual property income, and a goods and services tax reverse charge for certain telecommunications supplies. Any group that has relied on the transitional safe harbour in Canada should test the intra-group financing position against the revised definition, because the retrospective reach means previously filed positions may need revisiting.

United Kingdom. HMRC published its transitional approach to GloBE Information Return filing and exchange on 29 July 2026, discussed above. Revenue and Customs Brief 7 (2026), published 30 July 2026, explains changes to the VAT capital goods scheme effective from 29 July 2026, raising the threshold cost for land, buildings and civil engineering works from GBP 250,000 to GBP 600,000 and abolishing the computer category, with assets already in the scheme at 29 July 2026 remaining in it until the end of their adjustment periods. Separately, the Upper Tribunal held in Lexgreen Services Limited v HMRC [2026] UKUT 00289 (TCC) that section 201(1)(d) of the Inheritance Tax Act 1984 applies to a corporate settlor, so that a company which settled a remuneration trust with Jersey-resident trustees in 2005 was liable for the ten-year periodic inheritance tax charge. The reasoning turned on the definition of settlor in section 44(1) as any person by whom the settlement was made, and on the Interpretation Act 1978 presumption that person includes a body corporate.

India. The Taxation and Other Laws (Amendment) Bill 2026 was introduced on 4 August 2026 and passed the lower house on 6 August 2026, generally effective from 1 April 2026. The change of widest application reduces the conditions for an eligible investment fund registered outside India but managed from India to avoid being treated as having a business connection in India, from 13 to five. The remaining conditions are that the fund is not resident in India; that it is resident in a country or specified territory with a tax treaty with India or in a notified jurisdiction; that aggregate investment by Indian residents does not exceed 5 per cent of the fund's corpus; that the fund does not carry on, control or manage any business in India directly or indirectly; and that no person acting on its behalf engages in activities constituting a business connection other than the eligible fund manager. The Bill also exempts foreign institutional investors and the Bank for International Settlements on interest and capital gains from government securities, increases the surcharge on the special purpose vehicle of a business trust from 10 per cent to 25 per cent while exempting unit holders on dividends distributed from the vehicle, and extends the data centre exemption to data centres leased and operated by an Indian company. Separately, India's advance pricing agreement report for 2025-26, released this week, records 220 agreements signed in the year and 1,035 cumulatively by March 2026, with 84 bilateral agreements including first bilateral agreements with France, Indonesia, Ireland and Sweden. Median resolution was 36 months for unilateral and 38 months for bilateral agreements. The programme now sits under section 168 of the Income Tax Act 2025 and Rules 103 to 120, with a standardised filing fee of INR 2 million. The Budget 2026 safe harbour reform set a unified margin of 15.5 per cent for all information technology services and 15.0 per cent for data centre services, and raised the eligibility turnover threshold from INR 3 billion to INR 20 billion, which brings a materially larger population of Australian-owned Indian captives into safe harbour eligibility and is worth testing before the next Indian return cycle.

United States. Treasury and the Internal Revenue Service released proposed regulations REG-115145-25 on 31 July 2026, published at 91 FR 48794 on 3 August 2026, with comments due 17 September 2026. The regulations implement the allocation of foreign taxes between the short first required year and the succeeding year for a specified foreign corporation that lost the one-month deferral election, following the repeal of former section 898(c)(2) for taxable years beginning after 30 November 2025, codifying Notice 2025-72 with modifications. They also implement new section 960(d)(4), which disallows a foreign tax credit for 10 per cent of foreign income taxes paid or accrued, or deemed paid, on a distribution of previously taxed earnings and profits resulting from a section 951A inclusion, codifying Notice 2025-77. The preamble confirms that separate proposed regulations on the section 987 pre-transition gain and loss ratable recognition election are intended in the near future. For Australian subsidiaries of United States groups, the 10 per cent disallowance is a permanent leakage, and it would be sensible to build it into any repatriation model. On tariffs, 25 plaintiffs, being 23 states together with the offices of the Governors of Kentucky and Pennsylvania, filed a complaint in the Court of International Trade on 3 August 2026 challenging the additional tariffs of 10 per cent or 12.5 per cent imposed on most imports from 60 economies under section 301 of the Trade Act of 1974. The complaint characterises forced labour as a pretext for continuing a tariff scheme after the earlier attempts under the International Emergency Economic Powers Act and section 122 both failed, and alleges that the United States Trade Representative did not identify any link between the tariff rates and the prevalence of goods tainted by forced labour, did not meaningfully engage with public comments, established product exemptions inconsistent with its own exemplars, and did not weigh expected benefits against likely harms. Relief sought includes an injunction and refunds of tariffs paid. Australia remains in the 12.5 per cent band. Importers of record are not parties to the complaint, so a group that has paid section 301 duties on Australian-origin goods may want to check with its customs broker whether the relevant entries remain unliquidated, and whether a protective refund position is worth preserving while the litigation runs.

Chile. Ruling No. 1834-2026 addresses the migration of a Cayman Islands limited partnership, wholly owned by Canadian resident companies, to Alberta. The tax authority confirmed that the migration does not constitute a disposal and has no Chilean tax effects, provided the Chilean assets remain within the partnership's estate and the same partners and participation percentages are maintained. To the extent the partnership is fiscally transparent under Canadian law, so that its income is taxed at the level of the Canadian resident partners in the same period it is withdrawn, remitted or distributed from Chile, those partners may claim benefits under the Canada to Chile treaty, and the 35 per cent restitution obligation on the first category tax credit under articles 63 and 74 No. 4 of the Income Tax Law will not apply to dividends distributed by the Chilean entity. Certification from the Canadian tax authority confirming the partner-level taxation is required. For groups considering redomiciling a holding partnership into a treaty jurisdiction, the ruling is a useful worked example of the conditions on which continuity and treaty access were both accepted.

Related-party interest benchmarks. Colombia set the presumptive interest rate for loans between companies and their shareholders at 9.09 per cent for tax year 2026, by Decree 0898 of 29 July 2026, and that minimum rate applies annually to loans in either direction. France published its annual market rate limit on 5 August 2026 for the deductibility of interest paid to shareholders under article 39(1)(3) of the General Tax Code, at 4.33 per cent for companies with a 12-month fiscal year ending between 30 June 2026 and 29 September 2026, calculated on the four quarterly average rates observed during the debtor's fiscal year. Both are statutory limits rather than transfer pricing conclusions, and an intercompany interest matrix built on group policy rather than on jurisdictional caps can breach them without anyone noticing.

Finland. The Ministry of Finance published its 2027 Budget proposal on 6 August 2026, to be negotiated between government parties at the budget meeting on 1 and 2 September 2026. The corporate income tax rate would fall from 20 per cent to 18 per cent, options in non-listed companies would be taxed only when the underlying shares are sold rather than on exercise, and an exemption from the interest deductibility rules is introduced for certain infrastructure projects, which is worth noting for any group modelling Finnish infrastructure or project financing.

United Arab Emirates. The Federal Tax Authority issued Public Clarification CPT012 confirming that payments made by banks on Additional Tier 1 instruments are not deductible in determining taxable income where those payments are not included in accounting income. Because taxable income under article 20 of the Corporate Tax Law starts from accounting income, an instrument accounted for as equity with a distribution recorded outside profit or loss produces no deduction. Payments means dividends and coupons, and repayments of principal are excluded. The classification of the instruments and the treatment of payments in the hands of holders are outside the scope of the clarification.

Austria. The Steueroasen-Kundmachungs-Verordnung 2026 was gazetted on 3 August 2026 as BGBl. II Nr. 231/2026, made under section 18(2) of the Austrian public country by country reporting legislation, listing the jurisdictions for which disaggregated disclosure is required as at 1 March 2026. Austrian constituent entities in scope must disaggregate for each listed jurisdiction rather than reporting in aggregate, and the Austrian and Australian lists are not identical, so a group publishing under both regimes will need to reconcile the disclosure perimeters.

France. Decree No. 2026-692 of 27 July 2026, published on 29 July and in force from 30 July 2026, repeals the special reduced time limit for claims relating to withholding tax in article R. 196-1 of the Livre des procédures fiscales, which had required a claim by 31 December of the year following the year of withholding. The ordinary limit, in principle 31 December of the second year following payment, now applies. The Decree implements a decision of the Conseil d'État and reopens the claim window for non-resident claimants, including Australian funds, seeking French withholding tax refunds.

Treaties. Austria and Switzerland signed an amending protocol on 30 July 2026 to their 1974 income and capital tax treaty, implementing the BEPS minimum standards, introducing an anti-abuse clause, addressing public-service pensions and social security, revising the treatment of dividends, and clarifying the enforcement of tax claims relating to cross-border employment income. The Croatian government approved a ratification bill on 30 July 2026 for the 2022 Croatia to United States income tax treaty and its protocol signed on 28 April 2026, Croatia currently being the only European Union member state without a United States treaty in force. The Kazakh government authorised signature of an amending protocol to the Kazakhstan to Norway treaty on 29 July 2026 by Decree No. 667, including changes to the permanent establishment provisions. Argentina and Korea concluded negotiations for a treaty on 31 July 2026. The Serbian government approved treaties with Algeria and with Angola on 30 July 2026, and the Croatian government authorised negotiations with Tajikistan on the same date. The Belarus to Myanmar treaty entered into force on 15 July 2026, generally applying from 1 January 2027 for Belarus and 1 April 2027 for Myanmar. Malaysia published synthesised texts on 4 August 2026 showing Multilateral Instrument modifications to its treaties with Malta, San Marino and Spain.

United Nations. The fifth session of the intergovernmental negotiating committee on a framework convention on international tax cooperation opened in New York on 3 August 2026, working from the zero draft and aiming to finalise the convention and two early protocols by 13 August 2026. The division of view is the familiar one. Several OECD members, with the European Union speaking through Ireland, argued that the convention should remain a high-level instrument, should expressly safeguard existing rights and obligations under bilateral treaties, and should explicitly recognise that the two protocols, on the taxation of cross-border services including digital services and on dispute prevention and resolution, are optional. The Africa Group, speaking through Zambia, defended the draft largely as it stands, noting that the objectives and principles articles were drawn directly from the terms of reference adopted by the General Assembly in December 2024, which several delegations accepted limits the scope for amendment. On the fair allocation of taxing rights, OECD members argued the drafting creates multiple nexus rules without a clear hierarchy, raising the prospect of uncertainty and both double taxation and double non-taxation, and suggested the technical detail belongs in the services protocol. Those aligned with the Africa Group argued that recent revisions weakened the provision, particularly the removal of economic activity as an explicit source-country nexus. Discussion of harmful tax practices turned on whether the convention would duplicate the work of the Forum on Harmful Tax Practices or address identified gaps, and discussion of mutual administrative assistance and exchange of information turned on whether reservations should be available where existing instruments already govern the field.

The second tranche of the capital gains tax and negative gearing legislation is out for consultation. Treasury released the exposure draft of the Treasury Laws Amendment (Tax Reform No. 3) Bill 2026 and accompanying materials on 4 August 2026, following the first stage enacted by the Treasury Laws Amendment (Tax Reform No. 1) Act 2026. The draft deals with preserving existing negative gearing eligibility or new build treatment where a dwelling is acquired from a spouse through inheritance or relationship breakdown; the application of the capital gains tax changes to attribution managed investment trusts, with further consultation flagged on reducing compliance costs for fund managers; exempting capital gains distributed to beneficiaries through genuine testamentary trusts, deceased estates and special disability trusts from the minimum tax on capital gains; the position of taxpayers who are Australian residents for only part of the period they hold an asset; and ensuring the changes do not bring forward the taxing point for deferred gains on certain capital gains tax events. The definition of a new residential dwelling now allows acquisition within 24 months of a certificate of occupancy being issued, extended from the 12 months proposed in the Budget. A draft legislative instrument sets out the method for apportioning capital gains and losses for real property and for assets without a readily ascertainable market value. Submissions close on 21 August 2026. For groups that read last week's note on the notional sale at 30 June 2027, the point to carry forward is that the consolidated group interaction has been expressly deferred to a later tranche rather than resolved in this one, along with capital gains tax rollover interactions and the remaining position for foreign, mixed and temporary residents. Any group modelling the deferred gain position for an Australian consolidated group is modelling against an incomplete instrument, and it would be sensible to note that in the working papers rather than in the conclusion.

What to expect in the spring sittings. Parliament returns on 11 August 2026. The News Bargaining Incentive legislation is expected early in the sittings, as noted below. The capital gains tax and negative gearing tranche now out for consultation closes on 21 August, so it will not be introduced in the first fortnight, and the further tranches covering rollover interactions, foreign and temporary residents and tax consolidated groups have no announced timetable at all. Groups that need certainty on the consolidated group position before finalising a 30 June 2027 model should assume they will not have it this calendar year.

The News Bargaining Incentive has been finalised, and the Commissioner will administer it. Treasury announced the final design on 3 August 2026, with legislation expected to be introduced early in the spring sittings. Compared with the exposure draft, the charge base has been narrowed from business revenue to digital advertising revenue attributable to Australia, while the rate has increased from 2.25 per cent to 2.5 per cent. The scope has been broadened by removing the exclusion for professional networking sites. The number of deals needed to fully acquit a liability rises from four to six, the offset for deals with small publishers rises from 170 per cent to 200 per cent, and the distribution loading for regional journalists, small to medium publishers and media serving underrepresented communities rises from 10 per cent to 20 per cent. Deals made in the retrospective period will be recognised as eligible. General administration sits with the Commissioner of Taxation, with amendments to the Taxation Administration Act 1953, the Administrative Decisions (Judicial Review) Act 1977 and the ITAA 1997. For the small number of groups in scope, the narrowing of the base to Australian-attributable digital advertising revenue makes the revenue attribution question, rather than the rate, the item that will need substantiation.

The Payday Super law companion rulings have been finalised. The ATO issued LCR 2026/1, LCR 2026/2 and LCR 2026/3 on 5 August 2026, all applying from 1 July 2026, with compendiums published for each. The final numbering does not follow the draft numbering, which has caused some confusion, so it is worth setting out. LCR 2026/1, previously draft LCR 2026/D4, deals with the application and transitional provisions, including how excess contributions made before 1 July 2026 are applied, the cessation of the late payment offset, the treatment of contributions made between 1 July and 28 July 2026, and Norfolk Island salary or wages. LCR 2026/2, previously draft LCR 2026/D2, sets out the meaning of eligible contributions, which may be an actual contribution, a payment to the legal personal representative of a deceased employee, or a notional contribution for defined benefit members. LCR 2026/3, previously draft LCR 2026/D3, explains how the superannuation guarantee charge is calculated and assessed, based on the shortfall for a qualifying earnings day comprising individual final shortfalls, notional earnings, the administrative uplift and choice loadings. The point to note is that the Commissioner may make an initial charge assessment for a qualifying earnings day at any time, with no statutory time limit, and the charge is payable on the day the assessment is made. The fourth draft in the series, LCR 2026/D1 on qualifying earnings, has not been finalised, for the reason set out immediately below.

Draft LCR 2026/D1 is being held pending an appeal on ordinary time earnings. The ATO released an interim decision impact statement on 5 August 2026 on Department of Education (Vic) v FC of T [2026] FCA 898, reported at 2026 ATC 21-028, in which the Federal Court set aside amended superannuation guarantee charge assessments covering the period from April 2004 to December 2022 on the basis that a salary loading allowance paid to Victorian government school teachers formed part of neither the notional earnings base nor ordinary time earnings. The Commissioner has appealed to the Full Federal Court. Draft LCR 2026/D1 continues to reflect the Commissioner's view of ordinary time earnings, which is imported into the definition of qualifying earnings in section 10A of the Superannuation Guarantee (Administration) Act 1992 from 1 July 2026, and will not be finalised until the appeal concludes. Pending the appeal, the ATO does not propose to finalise advice requests, compliance decisions or objection decisions that turn on whether an amount is ordinary time earnings, and where a decision must be made it will follow the existing ATO view with recovery generally deferred.

A second employment agency payroll tax case is heading for a special leave application. The taxpayers are seeking to take SKG Cleaning Services Pty Ltd & Anor v Chief Commissioner of State Revenue (NSW) [2026] NSWCA 122, reported at 2026 ATC 21-026, to the High Court. The New South Wales Court of Appeal upheld the Supreme Court's finding that commercial cleaning contracts were employment agency contracts, so that payments to subcontractors were taken to be wages. Read with the Cerisewin decision noted last week, the employment agency provisions continue to be one of the more productive avenues available to state revenue offices in contractor cases. The High Court is already seized of the area, having granted special leave on 4 December 2025 in Uber Australia Pty Ltd v Chief Commissioner of State Revenue, a dispute over roughly $81 million of New South Wales payroll tax on payments to drivers, with a decision expected during 2026. SKG would put a second and factually very different set of facts before the Court.

Victorian landholder duty aggregation produced a more than elevenfold increase in duty. In ISPT Pty Ltd ATF ISPT Retail Australia Property Trust v Commissioner of State Revenue (Vic) [2026] VSC 480, reported at 2026 ATC 21-032 and decided on 29 July 2026, the Supreme Court of Victoria dismissed an appeal against an assessment of $10,684,371 where the taxpayer had self-assessed $2,190,807. The taxpayer acquired 75.8 per cent of the units in the Fort Street Real Estate Capital Fund in February 2022, at which point the fund was a public unit trust scheme, and that acquisition caused it to become a private unit trust scheme. It then acquired a further 19.46 per cent in July 2022. Victorian landholdings were valued at $173,200,000 at 30 June 2022. The Commissioner aggregated the two acquisitions under section 78(1)(a)(ii) of the Duties Act 2000 (Vic) and charged duty on the aggregated 95.26 per cent interest under section 86(3). The Court held that an acquirer must take the entity as it finds it for duty purposes, that section 78(1)(a) is considered before section 78(1)(b), and that the effect of an earlier transaction cannot be used to bring a later transaction within section 78(1)(b) unless the earlier transaction was itself a relevant acquisition. A single acquisition of 95.26 per cent in February would have been a significant interest in a public unit trust scheme, dutiable under section 87 at 10 per cent of the duty chargeable on a transfer of all the landholdings, or approximately $936,800. The staging of the acquisition therefore cost more than eleven times the duty a single acquisition would have attracted. The taxpayer has run the same argument in New South Wales on the same fund, unsuccessfully, and anyone structuring a staged acquisition of units in a widely held property trust should model the aggregated position before the first tranche rather than after the second.

PS LA 2013/2 has been updated. The ATO updated Practice Statement Law Administration PS LA 2013/2 on 6 August 2026 to align with current practice statement style and formatting. The update itself is cosmetic, but the practice statement sets out the role of the ATO's Economist Practice, the nature of the economic advice it provides and the process for obtaining accredited economic advice, and the Economist Practice is routinely engaged on transfer pricing and valuation matters. It remains a useful document for understanding how an economic position reaches a case team.

Input tax credits were denied on $3.9 million of legal fees in shareholder oppression proceedings. In Premier Aviation Holdings Pty Ltd ATF Premier Aviation Holdings Unit Trust v FC of T [2026] ARTA 1468, reported at 2026 ATC 10-824 and decided on 31 July 2026, the Administrative Review Tribunal affirmed the Commissioner's disallowance of input tax credits on $3,920,548 of legal fees claimed across 13 business activity statements for periods from 1 July 2020 to 30 June 2023. The fees related mainly to unsuccessful oppression proceedings brought in the Supreme Court of Victoria. The Tribunal held the legal services were not acquired for a creditable purpose: the trustee did not carry on a business of supplying aviation consulting services, since the individual concerned performed the operational and board roles personally, nor did it carry on a separate enterprise of conducting litigation. The proceedings were brought as a shareholder to protect or realise an interest in the company. The Tribunal added, in obiter, that even if the services had been acquired in carrying on an enterprise, they related to supplies arising from the disposal, buy-back or termination of the shareholding, which would be input taxed. For holding entities within corporate groups that incur significant professional costs, the decision is a reminder that a passive holding function may not support a creditable purpose, and that the input taxed character of a share disposal can defeat the claim even where an enterprise is found.

Two shorter items. Treasury released draft regulations and a draft determination on 3 August 2026 requiring the Tax Practitioners Board to publish suspensions, terminations, convictions, infringement notices and enforceable voluntary undertakings on the public register, and amending section 45 of the Tax Agent Services (Code of Professional Conduct) Determination 2024 to specify additional information practitioners must give clients, with submissions closing on 14 August 2026. Separately, a motor vehicle registries data-matching program was gazetted on 4 August 2026 as notice C2026G00526, covering 2025-26 to 2029-30, with stated objectives including investigating whether interposed proxy ownership is being used to conceal the accumulation of wealth, and non-compliance detection extending across GST, fringe benefits tax, luxury car tax, fuel tax credits and income tax.

Two new registration deadlines entered the calendar this week, both in the Gulf, and both apply whether or not any top-up tax is expected. The Qatari and Emirati obligations are registration obligations in their own right, so a group that has concluded it has no exposure in either jurisdiction still has a filing to make. The nearest live date remains the Dutch top-up tax return on 31 August 2026. One sequencing point that is easy to miss. Both the Portuguese Modelo 64 and, in a different way, the United Kingdom Overseas Return Notification require the group's central GloBE Information Return particulars, being the jurisdiction, the filing date and in Portugal the return number, before the local obligation can be discharged. A local finance team cannot complete either without those details coming from the group. Where central filing is being handled in one place and local notifications in another, it is worth confirming now that the particulars will be distributed rather than requested.