International giants will now be required to pay tax in Australia if they sell goods or services here, even if they have no physical presence in the country.

This comes as the Australian government implements ‘Pillar 2’ of the OECD/G20 multilateral agreement on global tax, brokered in October 2021.

It will apply to multinational companies with revenue of more than A$1.2 billion, meaning that giants such as Facebook, Google, and Amazon will have to pay a global minimum effective tax rate of 15 per cent.

It is estimated to pump an extra $370 million over the next five years, starting January 1, when the rule takes effect.

“The revenue gain over the medium term will be dependent on the response of other jurisdictions in implementing these rules, their own domestic minimum taxes, and behavioural responses by multinational groups,” the budget reads.

“It will also support Australian domestic businesses, by decreasing some of the tax advantages that are available to large multinationals.”