ED 325 International Tax Reform – Pillar Two Model Rules – Tier 2 Disclosures

Friday, July 7, 2023

The AASB is proposing amendments to AASB 1060 that would require affected Tier 2 entities to include targeted disclosures in their financial statements. These amendments are in response to international tax reform and the issue of AASB 2023-2 Amendments to Australian Accounting Standards – International Tax Reform – Pillar Two Model Rules (June 2023).

The amendments proposed in ED 325 would require a Tier 2 entity applying the mandatory temporary exception for deferred tax accounting re Pillar Two income taxes in AASB 112 Income Taxes to disclose the following:

that it has applied the temporary exception; and
its current tax expense (income) related to Pillar Two income taxes.

These disclosures are expected to provide useful information to users about the effects of the Organisation for Economic Co-operation and Development’s (OECD’s) Pillar Two model rules on the entity. They are also consistent with amendments proposed by the IASB to the IFRS for SMEs Standard.

The amendments are proposed to apply to annual periods beginning on or after 1 January 2023 that end on or after 30 September 2023, with earlier application permitted. This is consistent for most entities with the application of AASB 2023-2.

Please submit your comments to the AASB by 22 August 2023, via the AASB website or email to [email protected].