1 August 2026

The ATO has given businesses advance notice that it will be publishing its next Research and Development (R&D) tax incentive transparency report in September 2026. This report covers R&D claims made for the 2023–24 financial year. It also includes any outstanding or amended 2022–23 and 2021–22 claims that weren’t published in the previous year’s report for income years beginning on or after 1 July 2021. For in-scope entities, the ATO confirms that nothing needs to be done where an entity is satisfied that their previously submitted claim information is correct. If an entity is concerned that it is not correct, the ATO encourages them to review it ahead of publication.

The Critical Minerals Production Tax Incentive (CMPTI) will provide a refundable tax offset of 10% of eligible Australian processing costs for critical minerals processed and refined from 1 July 2027 to 30 June 2040, for up to 10 years per project.

The Department of Industry, Science and Resources is seeking feedback on how the CMPTI will work in practice. The consultation covers proposed:

• Application and reporting form questions
• Annual report and registration transfer timeframes
• Customer guidance topics

The consultation closes 11 August 2026.

In Department of Education v Commissioner of Taxation [2026] FCA 898, the Federal Court heard an appeal by the Department of Education against the Commissioner’s disallowance of objections to amended superannuation guarantee (SG) charge assessments. The core issue was whether an annual “salary loading allowance” paid to Victorian teachers (17.5% of four weeks’ salary, paid to those employed on a specified date regardless of whether leave was actually taken) formed part of the “notional earnings base” pre-1 July 2008 or “ordinary time earnings” (OTE) thereafter for SG purposes. The Department argued the allowance was in substance a recreation leave allowance (excluded from “salary”) and not earnings for ordinary hours. The Commissioner argued it was an ordinary payment forming part of OTE since no extra work was required to earn it.

Applying BlueScope Steel (AIS) Pty Ltd v Australian Workers Union (2019) 270 FCR 359, Button J held that the allowance was paid in addition to (not as part of) ordinary salary, and that eligibility turning on continued employment at a fixed date (rather than hours worked) meant it could not be “earnings in respect of ordinary hours of work”.

This decision may be appealed, and we note the Commissioner’s views in SGR 2009/2 remain unchanged. Employers with similarly structured legacy allowances should review their superannuation guarantee treatment in light of this reasoning, pending an appeal of commentary from the Commissioner.

For more detailed technical analysis on this decision, please refer to our recently issued Tax Alert.

In Vize v Whistle Funds Management Company Pty Ltd [2026] FCA 831, the Federal Court considered whether an individual, engaged under successive “Consultancy Agreements” from 2012, became an employee from mid-2017 as “Fund Manager” or April 2021 as “Managing Director” of the company. Whistle Funds maintained the original consultancy terms continued unvaried and that the individual remained an independent contractor, responsible for his own GST and income tax. A central issue was whether Whistle Funds owed superannuation contributions, both under s 116B of the Fair Work Act from 1 January 2024 and, for the earlier period, under the extended “employee” definition in s 12(3) of the Superannuation Guarantee (Administration) Act 1992 (Cth) (SGAA).

Having regard to other relevant decisions (i.e. Personnel Contracting and Jamsek cases), the Court found the parties had varied their arrangement by July 2017 (fixed salary, no invoicing condition, paid leave), making Vize an employee from that date despite the taxation arrangements pointing the other way. On the separate SG Act question, the Court held the first (2012) consultancy agreement was “wholly or principally” for Vize’s labour under s 12(3), as it allowed no delegation, but the second agreement was not, since it expressly permitted another “Key Person” to deliver services.

This decision serves as a reminder that contractual labels and GST/PAYG arrangements will not necessarily support a “contractor” characterisation where fixed salary, paid leave, and control indicia point to employment. A delegation clause remains integral to the “wholly or principally for labour” test under s 12(3) of the SGAA.

In SKG Cleaning Services Pty Ltd v Chief Commissioner of State Revenue [2026] NSWCA 122, the NSW Court of Appeal considered payroll tax assessments (plus penalties) issued against several related cleaning businesses (the SKG and Ezko parties) that used subcontractors and, in some cases, employees to provide commercial cleaning services. The Chief Commissioner had assessed the appellants on the basis that a number of their client contracts were “employment agency contracts” under s 37 of the Payroll Tax Act 2007 (NSW), making the appellants liable for payroll tax on payments to subcontractors treated as deemed employees. The primary judge upheld the assessments in full. On appeal, the appellants argued that certain “no indicia” (or “no/limited control”) contracts should not qualify because they did not give clients any contractual right to control who performed the work or how it was performed.

The Court held that the appellants’ argument adopted an overly narrow test, wrongly treating the client’s degree of contractual control over how work is performed as the decisive criterion. Instead, the correct inquiry under s 37 is whether the services are provided “in and for” the client’s business, assessed by the connection between the ordinary activities of the client’s business and the services supplied under the contract. Applying the decision in UNSW Global and E Group Security, the Court found that regular, continuous, on-site cleaning of a client’s premises is typically part of that client’s ordinary business activities, and that the degree of client control, while relevant to whether the work would otherwise be done by employees, is not determinative. The Court also noted that some contracts were incomplete in evidence, and the appellants, bearing the onus, could not rely on missing terms to prove those contracts were not employment agency contracts.

The Court of Appeal dismissed the appeal with costs, upholding the primary judge’s finding that all contracts in issue were employment agency contracts and that the payroll tax assessments (including penalties) stood.

This case highlights the risk of the employment agency provisions applying to cleaning (and similarly routine, on-site, recurring) service contracts.

In One Solar Power Pty Ltd v Commissioner of State Revenue [2026] QCAT 313, the Queensland Civil and Administrative Tribunal reviewed payroll tax assessments issued to a solar installation business for the 2019–2022 financial years. The Commissioner had included payments to four contractors as taxable wages under the “relevant contract” provisions and imposed penalty tax and unpaid tax interest. The taxpayer objected, arguing the payments were exempt under section 13B(2)(d)(iii) of the Payroll Tax Act 1971 (QLD) as payments for door-to-door sales of goods solely for domestic purposes, relying on the eight criteria in Public Ruling PTA007.2. The Commissioner’s delegate disallowed the objection on the basis that three criteria within this ruling, being 6(e), 6(f), and 6(g), were not satisfied.

The Tribunal found the contractor agreement was determinative: contractors were contractually obliged only to attend pre-set appointments assigned by the taxpayer via an online lead-generation funnel. This structurally meant sales were never made through unsolicited canvassing, meaning this aspect of the criteria was not met. Further, the taxpayer’s evidence was from a later financial year, outside of the assessment years, and did not establish domestic use on a contract-by-contract basis, so the onus of proof was not discharged.

The Tribunal held that the taxpayer had not discharged their onus to demonstrate criteria for the exemption applied. Accordingly, the objection decision of the Commissioner was confirmed.

This case highlights that appointment-based or lead-generated sales models (common in solar, home improvement, and similar door-to-door industries) present difficulties when considering the payroll tax exemption in QLD for door-to-door sales of goods.

Following the Full Federal Court’s decision in SEPL Pty Ltd as trustee of the SFT Trust v Commissioner of Taxation [2026] FCAFC 36, the ATO has released a Decision Impact Statement setting out its response and confirming that it will review the impact of the decision on its published guidance, including the FBT employer guide and Miscellaneous Taxation Rulings, MT 2019 and MT 2016.

This case concerned three brothers who were shareholders, directors, and beneficiaries of a family trust, and whether they were “employees” for FBT purposes and whether luxury motor vehicles made available for their personal use were provided “in respect of” employment. The decision has been a focus for employers and advisers grappling with the FBT treatment of non-cash benefits provided to shareholders and directors. 

In its statement, the ATO has confirmed the following positions:

• Directors of a corporate trustee of a discretionary trust may still fall within the definition of “employee” for FBT purposes, even where the common law meaning of the term is applied.
• The capacity in which persons, including directors of a corporate trustee of a discretionary trust, receive benefits from the trust will need to be determined having regard to all of the facts and circumstances of a case. This includes, but is not limited to, the terms of the trust deed, the actions of the trustee in exercising their duties under the trust, and the nature of the benefit provided.

The ATO’s response confirms that the taxpayer should not be read as a blanket exclusion of directors and shareholders from the FBT net. Rather, it reinforces that the outcome is highly fact-dependent. This case and the ATO’s response illustrate the importance of carefully identifying, and documenting, the capacity in which benefits are provided when evaluating the appropriate FBT treatment of benefits provided to owners/employees within a business.

The Australian Taxation Office (ATO) has updated Practical Compliance Guideline PCG 2025/4, which outlines the ATO’s practical administrative approach to the enforcement of penalties for global and domestic minimum tax lodgment obligations under the transitional approach, which applies in respect of fiscal years commencing on or before 31 December 2026 and ending on or before 30 June 2028. Specifically, the Guideline has been updated to reflect Australia’s adoption of the OECD’s common understanding on the central filing and exchange of the GloBE Information Return (GIR) for the 2024 fiscal year. Broadly, per the common understanding, the 2024 Implementing Jurisdictions have agreed, where the GIR has been centrally filed in any one of the jurisdictions listed in the annex by the relevant filing deadline and the GIR notification has been filed in the local jurisdiction by the relevant deadline, to:

• Waive penalties that might otherwise apply in respect of their local GIR filing obligations
• Not enforce their local GIR filing obligations before the relevant GIR exchange deadline

The ATO has issued the draft legislative instrument, Draft Taxation Administration (PAYG Withholding Variation for Foreign Resident Capital Gains Withholding Payments) Legislative Instrument 2026, which varies the amount that an entity that acquires certain CGT assets from a relevant foreign resident must pay to the Commissioner of Taxation under the foreign resident capital gains withholding (FRCGW) regime. The variations ensure that FRCGW appropriately reflects expected income tax liabilities relating to the change in ownership of the CGT asset and resolve practical difficulties that may arise in certain situations. The draft instrument consolidates five existing class variation legislative instruments into a single instrument, making it easier to identify whether a FRCGW class variation applies, and applies in the following circumstances:

• Acquisitions from multiple entities
• Deceased estates and legal personal representatives
• Marriage or relationship breakdowns
• Income tax-exempt entities
• Certain mortgagee exercise of a power of sale

Once finalised, the instrument will commence on the day after it is registered on the Federal Register of Legislation. Comments close 14 August 2026.

Following reforms announced in the 2026–27 Federal Budget to further streamline and strengthen the foreign investment framework, on 1 July 2026, Treasury commenced a review of conditions on existing foreign investment approvals. Treasury will review conditions to make sure they are effective and enforceable in reducing national interest and national security risks. The outcome of the review may:

• Remove conditions that are ineffective
• Remove conditions that duplicate other obligations under other regulatory regimes
• Update conditions to better manage risk

The review will first focus on tax conditions, with other conditions to be considered following consultation, which is expected to start in August 2026.

In the meantime, existing approval obligations and investor compliance with conditions attached to their approvals continue to apply. 

The Foreign Investment Portal was updated on 4 July 2026 to make improvements to submission processes, information capture, and system usability. The changes are designed to make it easier for investors and their representatives to complete submissions, manage information, and meet reporting requirements.

A new Foreign Investment Tax Checklist has been made available on the Foreign Investment Portal. The Tax Checklist outlines information required by the ATO to support Treasury in its review of foreign investment proposals. Uploading responses to the Tax Checklist is also now mandatory depending on the answers to certain tax questions. These changes are intended to ensure information required for the assessment is provided up front, reducing unnecessary delays in processing.

The competent authorities of Australia and Japan have entered into a Memorandum to establish the mode of application of the arbitration process provided for in Part VI of the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting.

The ATO, through its Private Capital Program, is intensifying its focus on the substantiation of claims for Double Tax Agreement (DTA) benefits made by investors in Fiscally Transparent Entities (FTEs), such as limited partnerships and US limited liability companies. To claim DTA benefits for income flowing through an FTE, at a minimum, the ATO expects entities to provide robust evidence that the ultimate investors are tax residents of a relevant treaty country. No de minimis exception is provided for ultimate investors by reason of small holding percentages.

The ATO has updated its Excise guidelines for the alcohol industry. Chapter 7, which concerns remissions, refunds, drawbacks, and exemptions, has been updated to include changes as a result of the Excise Amendment (Remission Increase for Distillers and Brewers) Regulations 2025. These Regulations increased the maximum amount of remission an eligible alcohol manufacturer may be entitled to per financial year. The remission cap increased from $350,000 to $400,000 in relation to certain alcoholic beverages entered for home consumption on or after 1 July 2026.

In light of the growing significance of services in cross-border economic activity, guidance on the transfer pricing treatment of intra-group services remains of substantial practical relevance, and work has been undertaken to update and modernise the existing provisions in the OECD Transfer Pricing Guidelines. A discussion draft presents proposed revisions relating to the accurate delineation of intra-group services, the determination of the arm’s length charge and other conditions for such services, documentation considerations, and new examples illustrating the application of the principles described in the guidance. Comments on the discussion draft closed 22 July 2026.

In news from the OECD, the following have been issued:

• A working paper, which provides an early empirical, ex post assessment of how MNEs have responded to the introduction of the Global Minimum Tax (GMT).
• Corporate Tax Statistics 2026, an annual publication that includes information on corporate taxation, multinational enterprise activity, and base erosion and profit shifting (BEPS) practices. The report supports the measurement and monitoring of tax avoidance through a wide range of indicators, including data on corporate income taxes, corporate tax rates, revenues, effective tax rates, and tax incentives for research and development (R&D) and innovation. The publication also includes anonymised and aggregated country-by-country reporting (CbCR) data providing an overview of the global tax and economic activities of thousands of MNEs.
• Revenue Statistics in Asia and the Pacific 2026, which compiles comparable tax revenue statistics for 38 economies, including Australia, in the Asia and Pacific region. Additionally, it provides information on non-tax revenues for selected economies and includes a special feature on taxing the informal and hard-to-tax sectors.
• The Enhanced Monitoring Report on the Implementation of the Standard on Transparency and Exchange of Information on Request 2026 Update (June), which presents consolidated outcomes of the enhanced monitoring process in the implementation of the Exchange of Information on Request (EOIR) standard by 39 jurisdictions.

The 2026–27 Federal Budget announced that, from 1 July 2027, small and medium businesses will be able to opt in to reporting and paying PAYG instalments monthly and to use an ATO-approved calculation embedded in accounting software to calculate and vary instalments. To support this, the Australian Taxation Office (ATO) has confirmed that it is working to prepare for the introduction of Dynamic PAYG instalments, including holding ATO pilot programs and collaborating with software providers and stakeholders during the 2026–27 financial year.

Additionally, the ATO has published draft Practical Compliance Guideline PCG 2026/D3, which outlines the Commissioner’s practical compliance approach to the application of the general interest charge (GIC) on excessive variations of PAYG instalments. The draft PCG confirms that the ATO will not allocate compliance resources to apply or collect GIC if a taxpayer uses the Dynamic PAYG calculation method as intended. Specifically, the compliance approach outlined is therefore also contingent on the taxpayer taking reasonable care in relation to its values or data inputs used under the dynamic PAYG instalment method, including as to acts or omissions that might affect the accuracy or completeness of those inputs. The ATO will apply this PCG to pilot participants and those that opt into Dynamic PAYGI from 1 July 2027. Comments on the draft PCG close 28 August 2026.

The capital gains tax (CGT) improvement threshold is one of the factors used to determine whether an improvement to a pre-CGT asset is treated as a separate asset for CGT purposes under section 108-70 of the Income Tax Assessment Act 1997. For the 2026–27 year, the ATO has reported that the improvement threshold is $194,165 ($187,962 applicable in 2025–26).

The ATO’s Corporate Plan 2026–27 provides coverage of the functions of the ATO, the Tax Practitioners Board (TPB), and the Australian Charities and Not-for-profits Commission (ACNC), covering the period 2026–27 to 2029–30.

From the ATO perspective, the Commissioner of Taxation, Rob Heferen, noted in his foreword that the ATO’s vision is for an Australia where every taxpayer meets their obligations because:

• Complying is easy
• Help is tailored
• Deliberate non-compliance has consequences

Some of the reported areas that the ATO plans to focus its effort and resources on include strengthening payment performance and debt collection, enhancing counter-fraud measures, and delivering key reforms, such as Payday Super.

A further reported priority for the year ahead is support of the government’s regulatory reform agenda by reducing complexity, improving administrative efficiency, and minimising compliance costs for taxpayers.

The ATO has also noted that it will do what it can to protect the integrity of the tax system and will continue to take firm action against deliberate non-compliance, while supporting the vast majority of taxpayers who want to do the right thing. This includes a commitment to support taxpayers experiencing vulnerability.

The Commonwealth penalty unit has increased to $364 (up from $330) with effect from 1 July 2026. This flows through to many penalties under the Taxation Administration Act 1953, including the failure to lodge (FTL) on time penalty.

For significant global entity (SGE) taxpayers, the maximum SGE FTL penalty is now $910,000, up from $825,000 previously. This increased rate applies to documents due on or after 1 July 2026.

The Auditor-General has released the Australian National Audit Office’s (ANAO) report into the Australian Taxation Office Management of Small Business Collectable Debt. The report notes that collectable tax debt from small business was $35.9 billion in 2024–25, an increase of $19.4 billion from 2018–19 and approximately two-thirds of the $54.2 billion total 2024–25 collectable tax debt.

The report finds that the ATO’s management of collectable small business debt risks is partly effective, noting that:

• The ATO’s self-assessment is that the risk of unacceptable levels of small business debt is out of tolerance.
• Internal targets to reduce debt volumes for small business are absent. The whole of collectable debt performance measure does not identify small business debt performance.
• Rising debt volumes create risks, including that some taxpayers obtain an unfair financial advantage over others.
• Pay As You Go Withholding and GST debt are the largest proportion of the overall collectable debt book.

The report contains eight recommendations relating to performance measures, benchmarks, communication, and better use of data. The ATO has agreed to all eight recommendations.

The following practice statements have been updated by the ATO:

• Practice statement law administration PS LA 2011/12 Remission of general interest charge to insert vulnerability as an example of where remission may be appropriate. The guidance has also been revised to reflect that taxpayers are no longer entitled to claim general interest charge (GIC) incurred on or after 1 July 2025 as a deduction.
• Practice statement law administration PS LA 2011/4 Collection and recovery of disputed debts, with updates made concerning the deductibility of the shortfall interest charge (SIC) and GIC.
• Practice statement law administration PS LA 2011/21 Offsetting of refunds and credits against taxation and other debts to include consideration of taxpayer vulnerability as a relevant factor when determining whether to exercise the discretion to refund rather than offset it against a debt.

In addition to the above, each practice statement has been updated to align with amended practice statement style and formatting requirements.

The ATO has issued an Addendum to Taxation Ruling TR 97/24, which explains the operation of the law that may grant relief from the effects of a failure to substantiate expenses. The Addendum amends the ruling to include the ATO’s approach to people experiencing vulnerability, and to update for currency and to comply with current publishing requirements. The Addendum applies both before and after its date of issue.

The Revenue (Cost of Living Relief Locked-in Law) and Other Legislation Amendment Bill 2026 (QLD) has now completed its passage through the Queensland Parliament. The Act gives effect to measures announced in the 2026–27 Queensland State Budget, including: 

• The 50% payroll tax rebate for wages paid to apprentices and trainees, which is extended by 12 months until 30 June 2027 
• From 1 August 2026, temporary residents will generally be ineligible for Queensland’s home, first home, and vacant land transfer duty concessions, and will be required to pay transfer duty at standard rates, broadly consistent with investor treatment.

The First Home Owner Grant is also increased from $15,000 to $30,000 from 1 July 2026.

The Queensland Revenue Office has released Public Ruling GEN013.1, which sets out the terms of an administrative arrangement that enables the Commissioner to administer the Duties Act 2001 (QLD), First Home Owner Grant and Other Home Owner Grants Act 2000 (QLD), and Land Tax Act 2010 (QLD), on the basis that transfer duty, the First Home Owner Grant, and land tax are unaffected by participation in the Boost to Buy or Help to Buy shared equity programs.

The State Revenue Office of Victoria has published two new land transfer duty revenue rulings:

• DA-070, which explains when amounts paid by a purchaser towards certain vendor tax liabilities, such as land tax, are included in the dutiable value of a land transfer. It generally applies to contracts of sale entered into on or after 17 August 2026 (which is when the Ruling takes effect). Supporting website guidance is also available.
• DA-020v2, which provides guidance on a land transfer arising from an incorporation of associations or amalgamation of incorporated associations, and sets out examples illustrating the circumstances under which a duty exemption would be available. It is effective 20 July 2026.

The Victorian State Revenue Office has published a summary of the Victorian taxation changes taking effect on 1 July 2026, which includes updates to some fees, thresholds, levies, and rates, including increases to the motor vehicle duty luxury car threshold.

The ACT Revenue Office has published a high-level summary of the 2026–27 changes commencing from 1 July 2026, including changes relating to stamp duty, home buyer assistance, rates and property charges, and payroll tax.