{"id":"F2023L00949","name":"Accounting Standard AASB 2023-2 Amendments to Australian Accounting Standards – International Tax Reform – Pillar Two Model Rules","slug":"accounting-standard-aasb-2023-2-amendments-to-australian-accounting-standards-international-tax-refo","collection":"legislative_instrument","jurisdiction":"commonwealth","status":"in_force","isInForce":true,"actNumber":null,"makingDate":null,"administeringDepartment":null,"currentVersion":{"id":104592,"registerId":"commonwealth-F2023L00949-current","compilationNumber":null,"startDate":"2026-04-03","status":"InForce","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"Obtaining a copy of this Accounting Stan","sectionType":"part","heading":"Obtaining a copy of this Accounting Standard","content":"# Obtaining a copy of this Accounting Standard\n\nThis Standard is available on the AASB website: www.aasb.gov.au.\n\nAustralian Accounting Standards Board\n\nPO Box 204\n\nCollins Street West\n\nVictoria 8007\n\nAUSTRALIA\n\nPhone: (03) 9617 7600\n\nE-mail: standard@aasb.gov.au\n\nWebsite: www.aasb.gov.au","sortOrder":0},{"sectionNumber":"Other enquiries","sectionType":"part","heading":"Other enquiries","content":"# Other enquiries\n\nPhone: (03) 9617 7600\n\nE-mail: standard@aasb.gov.au\n\nCOPYRIGHT\n\n© Commonwealth of Australia 2023\n\nThis AASB Standard contains IFRS Foundation copyright material. Reproduction within Australia in unaltered form (retaining this notice) is permitted for personal and non-commercial use subject to the inclusion of an acknowledgment of the source. Requests and enquiries concerning reproduction and rights for commercial purposes within Australia should be addressed to The Managing Director, Australian Accounting Standards Board, PO Box 204, Collins Street West, Victoria 8007.\n\nAll existing rights in this material are reserved outside Australia. Reproduction outside Australia in unaltered form (retaining this notice) is permitted for personal and non-commercial use only. Further information and requests for authorisation to reproduce IFRS Foundation copyright material for commercial purposes outside Australia should be addressed to the IFRS Foundation at www.ifrs.org.\n\nISSN 1036-4803","sortOrder":1},{"sectionNumber":"Contents","sectionType":"part","heading":"Contents","content":"# Contents\n\nPreface\n\nAccounting Standard\n\nAASB 2023-2 Amendments to Australian Accounting Standards – International Tax Reform – Pillar Two Model Rules\n\nfrom page\n\nObjective 5\n\nApplication 5\n\nAmendments to AASB 112 5\n\nCOMMENCEMENT OF THE LEGISLATIVE INSTRUMENT 6\n\naVailable on the AASB website\n\nIASB Basis for Conclusions – Amendments\n\nAustralian Accounting Standard AASB 2023-2 Amendments to Australian Accounting Standards – International Tax Reform – Pillar Two Model Rules is set out on pages 5–6. All the paragraphs have equal authority.","sortOrder":2},{"sectionNumber":"Preface","sectionType":"part","heading":"Preface","content":"# Preface\n\n## Standards amended by AASB 2023-2\n\nThis Standard makes amendments to AASB 112 Income Taxes (August 2015).\n\nThese amendments arise from the issuance of International Financial Reporting Standard International Tax Reform—Pillar Two Model Rules (Amendments to IAS 12) by the International Accounting Standards Board (IASB) in May 2023.\n\n## Main features of this Standard\n\nMain requirements\n\nThis Standard amends AASB 112 to introduce:\n\n(a) a mandatory temporary exception to accounting for deferred taxes arising from the implementation of the Pillar Two model rules published by the Organisation for Economic Co-operation and Development (OECD); and\n\n(b) targeted disclosure requirements to help financial statement users better understand an entity’s exposure to income taxes arising from the reform, particularly in periods before legislation implementing the rules is in effect.\n\nApplication date\n\nThis Standard applies to annual periods beginning on or after 1 January 2023 that end on or after 30 June 2023. Earlier application is permitted.","sortOrder":3},{"sectionNumber":"Standards amended by AASB 2023-2","sectionType":"part","heading":"Standards amended by AASB 2023-2","content":"## Standards amended by AASB 2023-2\n\nThis Standard makes amendments to AASB 112 Income Taxes (August 2015).\n\nThese amendments arise from the issuance of International Financial Reporting Standard International Tax Reform—Pillar Two Model Rules (Amendments to IAS 12) by the International Accounting Standards Board (IASB) in May 2023.","sortOrder":4},{"sectionNumber":"Main features of this Standard","sectionType":"part","heading":"Main features of this Standard","content":"## Main features of this Standard\n\nMain requirements\n\nThis Standard amends AASB 112 to introduce:\n\n(a) a mandatory temporary exception to accounting for deferred taxes arising from the implementation of the Pillar Two model rules published by the Organisation for Economic Co-operation and Development (OECD); and\n\n(b) targeted disclosure requirements to help financial statement users better understand an entity’s exposure to income taxes arising from the reform, particularly in periods before legislation implementing the rules is in effect.\n\nApplication date\n\nThis Standard applies to annual periods beginning on or after 1 January 2023 that end on or after 30 June 2023. Earlier application is permitted.","sortOrder":5},{"sectionNumber":"Accounting Standard AASB 2023-2","sectionType":"part","heading":"Accounting Standard AASB 2023-2","content":"# Accounting Standard AASB 2023-2\n\nThe Australian Accounting Standards Board makes Accounting Standard AASB 2023-2 Amendments to Australian Accounting Standards – International Tax Reform – Pillar Two Model Rules under section 334 of the Corporations Act 2001.\n\nKeith Kendall\n\nDated 22 June 2023 Chair – AASB","sortOrder":6},{"sectionNumber":"Objective","sectionType":"part","heading":"Objective","content":"## Objective\n\nThis Standard amends AASB 112 Income Taxes as a consequence of the issuance of International Financial Reporting Standard International Tax Reform—Pillar Two Model Rules (Amendments to IAS 12) by the International Accounting Standards Board in May 2023.","sortOrder":8},{"sectionNumber":"Application","sectionType":"part","heading":"Application","content":"## Application\n\nThe amendments set out in this Standard apply to entities and financial statements in accordance with the application of AASB 112 set out in AASB 1057 Application of Australian Accounting Standards.\n\nThis Standard applies to annual periods beginning on or after 1 January 2023 that end on or after 30 June 2023. Earlier application is permitted.","sortOrder":9},{"sectionNumber":"Amendments to AASB 112","sectionType":"part","heading":"Amendments to AASB 112","content":"## Amendments to AASB 112\n\n| Paragraphs 4A, 88A–88D (including their related heading and the examples) and 98M are added. Ellipses (…) are used to help provide the context within which amendments are made. |\n| -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |\n\nScope\n\n    …\n    4A This Standard applies to income taxes arising from tax law enacted or substantively enacted to implement the Pillar Two model rules published by the Organisation for Economic Co-operation and Development (OECD), including tax law that implements qualified domestic minimum top-up taxes described in those rules. Such tax law, and the income taxes arising from it, are hereafter referred to as ‘Pillar Two legislation’ and ‘Pillar Two income taxes’. As an exception to the requirements in this Standard, an entity shall neither recognise nor disclose information about deferred tax assets and liabilities related to Pillar Two income taxes.\n    …\n\nDisclosure\n\n    …\n\nInternational tax reform—Pillar Two model rules\n\n    88A An entity shall disclose that it has applied the exception to recognising and disclosing information about deferred tax assets and liabilities related to Pillar Two income taxes (see paragraph 4A).\n    88B An entity shall disclose separately its current tax expense (income) related to Pillar Two income taxes.\n    88C In periods in which Pillar Two legislation is enacted or substantively enacted but not yet in effect, an entity shall disclose known or reasonably estimable information that helps users of financial statements understand the entity’s exposure to Pillar Two income taxes arising from that legislation.\n    88D To meet the disclosure objective in paragraph 88C, an entity shall disclose qualitative and quantitative information about its exposure to Pillar Two income taxes at the end of the reporting period. This information does not have to reflect all the specific requirements of the Pillar Two legislation and can be provided in the form of an indicative range. To the extent information is not known or reasonably estimable, an entity shall instead disclose a statement to that effect and disclose information about the entity’s progress in assessing its exposure.\n\n| Examples illustrating paragraphs 88C–88D                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |\n| ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |\n| Examples of information an entity could disclose to meet the objective and requirements in paragraphs 88C–88D include:(a) qualitative information such as information about how an entity is affected by Pillar Two legislation and the main jurisdictions in which exposures to Pillar Two income taxes might exist; and(b) quantitative information such as:(i) an indication of the proportion of an entity’s profits that might be subject to Pillar Two income taxes and the average effective tax rate applicable to those profits; or(ii) an indication of how the entity’s average effective tax rate would have changed if Pillar Two legislation had been in effect. |\n\n    …\n\nEffective date\n\n    …\n    98M AASB 2023-2 Amendments to Australian Accounting Standards – International Tax Reform – Pillar Two Model Rules, issued in June 2023, added paragraphs 4A and 88A–88D. An entity shall:\n    (a) apply paragraphs 4A and 88A immediately upon the issue of these amendments and retrospectively in accordance with AASB 108; and\n    (b) apply paragraphs 88B–88D for annual reporting periods beginning on or after 1 January 2023 that end on or after 30 June 2023. An entity is not required to disclose the information required by these paragraphs for any interim period ending on or before 31 December 2023.","sortOrder":10},{"sectionNumber":"Commencement of the legislative instrume","sectionType":"part","heading":"Commencement of the legislative instrument","content":"## Commencement of the legislative instrument\n\nFor legal purposes, this legislative instrument commences on 29 June 2023.","sortOrder":11}],"analysis":{"flash_summary_failed":{"failed":true,"reason":"A positive credit balance is required for all requests, including BYOK, so fallback providers remain available. Add credits at https://vercel.com/d?to=%2F%5Bteam%5D%2F%7E%2Fai%3Fmodal%3Dtop-up to continue.","source":"analysis-cron"},"flash_summary":{"complexity_score":5,"scope_assessment":{"changed":true,"description":"This amendment explicitly brings ‘Pillar Two income taxes’ within the area addressed by AASB 112 but simultaneously creates a mandatory temporary exception to recognising and disclosing deferred tax assets and liabilities related to those taxes (para 4A). It also adds new disclosure obligations about entities’ exposure (paras 88A–88D) and prescribes transitional application rules, including retrospective application for paragraph 4A and phased disclosure application (para 98M). These changes therefore alter the practical scope and application of AASB 112 for Pillar Two matters."},"complexity_factors":["Introduces a narrow but mandatory exception to deferred tax recognition and disclosure (para 4A), which alters core accounting treatment.","Adds multiple targeted disclosure requirements with qualitative and quantitative elements and indicative ranges, requiring significant judgment and estimation (paras 88A–88D).","Requires separate reporting of current tax expense related to Pillar Two (para 88B), creating additional reporting lines.","Timing and transition rules require retrospective application for some paragraphs and phased application for others, increasing implementation complexity (para 98M; AASB 108 reference).","Interaction with external tax developments: application depends on whether Pillar Two tax law is enacted or substantively enacted (para 4A), so legal/technical assessment of tax statutes is needed.","Cross-references to other standards for application and retrospective treatment (AASB 1057, AASB 108) create procedural and systems implications for preparers."],"plain_english_summary":"**What it changes:** Amends AASB 112 to introduce a temporary mandatory exception that prevents recognising or disclosing deferred tax assets and liabilities arising from the OECD Pillar Two model rules, and requires targeted disclosures about an entity’s exposure. **Who it affects and why it matters:** Entities reporting under AASB 112 (notably multinational groups) must change how they account for and disclose Pillar Two tax effects for annual periods beginning on or after 1 January 2023 (ending on or after 30 June 2023)."},"kimi_summary":{"content_quality":"ok","complexity_score":3,"scope_assessment":{"changed":false,"description":"This amendment maintains its original narrow scope. It was specifically designed to provide temporary accounting relief and disclosure requirements for Pillar Two tax implementation, and it does exactly that without expanding into broader tax accounting reforms."},"complexity_factors":["Very short instrument (only 2 substantive pages of amendments)","Only 5 new paragraphs added to existing standard (4A, 88A-88D, 98M)","Single cross-reference to AASB 112 (Income Taxes) and AASB 108 (Accounting Policies)","No nested exceptions or conditional logic beyond the basic temporary exception","Relies on external understanding of OECD Pillar Two model rules (not defined in detail within the instrument)","Simple effective date structure with immediate application for some paragraphs, delayed for others"],"plain_english_summary":"This amendment gives large multinationals a temporary relief from recognising deferred tax assets and liabilities tied to the OECD Pillar Two minimum tax, while requiring clear disclosure that the exception is used and summarising current Pillar Two tax exposure (qualitative and quantitative or a range). It eases near‑term accounting burdens during rule implementation but keeps investor transparency and alignment with international standards."}},"importantCases":[],"_links":{"self":"/api/acts/accounting-standard-aasb-2023-2-amendments-to-australian-accounting-standards-international-tax-refo","history":"/api/acts/accounting-standard-aasb-2023-2-amendments-to-australian-accounting-standards-international-tax-refo/history","analysis":"/api/acts/accounting-standard-aasb-2023-2-amendments-to-australian-accounting-standards-international-tax-refo/analysis","conflicts":"/api/acts/accounting-standard-aasb-2023-2-amendments-to-australian-accounting-standards-international-tax-refo/conflicts","importantCases":"/api/acts/accounting-standard-aasb-2023-2-amendments-to-australian-accounting-standards-international-tax-refo/important-cases","documents":"/api/acts/accounting-standard-aasb-2023-2-amendments-to-australian-accounting-standards-international-tax-refo/documents"}}