1 May 2026

The High Court has refused the Commissioner’s application for special leave to appeal from the Full Federal Court’s decision in Commissioner of Taxation v Hicks [2025] FCAFC 171. In that case, the Full Federal Court unanimously found that neither section 45B nor Part IVA of the Income Tax Assessment Act 1936 applied to a series of steps that were carried out as part of a restructure by a private group of entities. For further details of that case, see the February 2026 edition of Monthly Tax Update.

The ATO has released the 2026 Reportable Tax Position (RTP) Schedule instructions for CIVs including the Category C questions (a total of 20, which have their origins in the same list as applicable to a corporate tax entity) and details of which collective investment vehicles and managed funds will be required to lodge an annual RTP Schedule from 2026. The RTP Schedule is required for an entity that is a CIV that is lodging any of the following:

• Trust tax return as a managed investment trust (MIT) or a corporate collective investment vehicle (CCIV) sub-fund trust

• Attribution managed investment trust (AMIT) tax return and schedule

• Attribution CCIV sub-fund tax return and schedule

and has a total business income, including gross capital gains, of $250 million or more in the current year.

The Australian Taxation Office (ATO) has issued a timely reminder of the implication of the super stapling and disclosure rules when onboarding new employees. In this regard, employers are reminded that when onboarding new employees, information about an employee’s existing superannuation fund must be shown alongside any advertisement of alternative superannuation funds. This requirement supports informed choice and prevents unnecessary multiple super accounts.

Employers are also urged to request stapled fund details directly through the ATO, which confirms a genuine employment relationship before releasing information and provides an important safeguard against fraud. Using the correct ATO-authorised processes ensures employees fully benefit from the stapling system.

The ATO has released additional Payday Super guidance responding to common myths and misconceptions about the reforms ahead of the 1 July 2026 Payday Super commencement date. The guidance urges employers to begin preparations now, including engaging with payroll providers to confirm system readiness and managing cash reserves to accommodate the shift from quarterly to payday-aligned SG contributions.

In particular, the ATO confirms that employers currently using the Small Business Superannuation Clearing House (SBSCH) will no longer have access to the SBSCH online service after 30 June 2026. Employers using the SBSCH should download all transaction history before 1 July 2026 and make alternative arrangements for processing SG contributions under the Payday Super regime.

The ATO has released further guidance on how employers should manage superannuation during the transition from the current quarterly SG system to Payday Super.

Of particular note, the ATO has addressed concerns regarding the maximum superannuation contributions base (MCB) and its interaction with the concessional contributions (CC) cap during the transition year. Under the current quarterly regime, the final June 2026 quarter SG contribution may fall within the 2026-27 financial year, raising the possibility that some employees—particularly those earning above the MCB—could inadvertently exceed their CC cap. 

As reported in last month’s update, the Government has announced that it will introduce technical amendments to address this; however, the legislative amendments to address the transitional overlap remain outstanding.

The ATO has published some of the key superannuation rates and thresholds for the 2026-27 income year that relate to employment. Notable updates include:

• Super guarantee percentage—12%

• Maximum superannuation contributions base—$270,830 for the 2026-27 financial year

• Maximum co-contribution entitlement—remains at $500, with the lower income threshold increasing to $49,293 and the higher income threshold increasing to $64,293

• Genuine redundancy and early retirement scheme payment caps

• Eligible termination payment (ETP) caps for life and death benefit termination payments increased to $270,000

Employers should ensure payroll systems and SG calculations are updated to reflect the new thresholds ahead of 1 July 2026.

The ATO has issued the various FBT rates and thresholds for the fringe benefits tax (FBT) year commencing on 1 April 2026, including the following:

• FBT gross-up rates

• Reportable fringe benefits thresholds

• FBT exemption and FBT rebate capping thresholds 

• Electric vehicle home charging rate

• Motor vehicle (other than car)—cents per kilometre rate

• Statutory interest rate

• Reasonable food and drink amounts for employees living away from home 

The Full Federal Court allowed the taxpayer’s appeal in SEPL Pty Ltd as trustee of the SFT Trust v Commissioner of Taxation [2026] FCAFC 36, setting aside the orders of the primary judge and restoring the Administrative Appeals Tribunal’s decision that three brothers who were shareholders, directors, and beneficiaries of a family trust were neither ‘employees’ within the meaning of the Fringe Benefits Tax Assessment Act 1986 (Cth) (FBTAA), nor were the luxury motor vehicles that were made available for their personal use provided ‘in respect of’ employment.

The brothers held multiple roles—as directors and shareholders of the corporate trustee, beneficiaries, and appointors under the trust deed. The costs of the brothers’ private use of the vehicles were debited to the matriarch’s beneficiary account and cleared by trust distributions. There were no written employment contracts, the brothers were not paid wages, had no leave entitlements, and there were employed managers for all relevant functions.

The Full Court confirmed that there was no employment relationship under common law principles and held that s12-40 of Schedule 1 of the Taxation Administration Act 1953 (payments to company directors) could not assist the Commissioner’s argument, as the corporate trustee and the trust are two separate entities for tax purposes, and the brothers were directors of the trustee company, not of the trust.

On the question of whether the cars were provided ‘in respect of’ employment, the Full Court affirmed the principle in J & G Knowles & Associates v Commissioner of Taxation [2000] FCA 196 that a sufficient or material connection to employment is required—a mere causal link is not enough. The trust deed provisions, accounting treatment, and absence of any remuneration arrangement all pointed to the benefits being received in the brothers’ capacity as beneficiaries and family proprietors.

This case illustrates the importance of paying careful attention to 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.

In Chief Commissioner of State Revenue v Nova Security Group Pty Ltd [2026] NSWCATAP, the New South Wales (NSW) Civil and Administrative Tribunal Appeal Panel dismissed the Chief Commissioner’s appeal against the Tribunal’s earlier finding that contracts between the taxpayer, a private security firm, and its clients were not employment agency contracts under section 37 of the Payroll Tax Act 2007 (NSW).

The Commissioner’s appeal was confined to two questions of law. First, whether the Tribunal applied the wrong legal test by relying on a multifactorial “integration” analysis rather than the approach set out by the Court of Appeal in Chief Commissioner of State Revenue v Integrated Trolley Management Pty Ltd [2023] NSWCA 302 (ITM), which emphasised characterising the employment agency contract by reference to its terms, the nature of the client’s business, and the relationship between the two—with a focus on regularity, continuity, and client control. Second, whether the Tribunal misconstrued the Security Industry Act 1997 (NSW) as precluding clients from exercising significant control over the security services.

On the first ground, the Appeal Panel accepted that the Tribunal erred in treating the ITM decision as limited to its facts and not recognising its general application. However, the Appeal Panel found that ITM did not go so far as to hold that the multifactorial approach would always and inevitably lead to error. The Tribunal had considered regularity, continuity, and control—and its use of the concept of “integrated into” was in aid of the statutory question, not as a substitute for it. Ultimately, whether the Tribunal gave insufficient weight to particular factors raised a mixed question of fact and law, for which leave to appeal had not been sought.

On the second ground, the Appeal Panel found that the Tribunal had not construed the Security Industry Act 1997 (NSW) as precluding client control. The Tribunal’s findings on control were grounded in the contractual terms and the evidence, not in a misinterpretation of the regulatory framework.

This decision, read alongside the recent SoClean and SKG Cleaning Services decisions, continues to highlight the significance of the employment agency contract provisions for businesses that procure services through intermediaries, particularly in the security and cleaning sectors. Employers engaging service providers in these industries should ensure their contractual arrangements are reviewed in light of the evolving case law. 

In Hardy and Commissioner of Taxation [2026] ARTA 528, the Administrative Review Tribunal (ART) affirmed the Commissioner’s decision that a payment made by an industry redundancy fund to a taxpayer following a redundancy did not qualify for concessional tax treatment as a ‘genuine redundancy payment’ under section 83-175 of the Income Tax Assessment Act 1997 (ITAA 1997).

The taxpayer, a sprinkler fitter, was made redundant by his employer and received a payment from an industry redundancy fund, which was treated as an employment termination payment, eligible for the tax-free threshold applicable to genuine redundancy payments. The Commissioner disputed this position on the basis that it exceeded what could reasonably be expected on voluntary termination. The taxpayer argued he would have received nil on voluntary resignation because the redundancy fund required claimants to make a statutory declaration certifying they were currently unemployed with no offers of re-employment in the industry pending. The taxpayer contended he had received employment offers by the time of his dismissal and could not have truthfully made that certification on voluntary resignation as he would have received nothing from the fund.

The ART rejected this argument. It found that at the time the taxpayer made his statutory declaration, he had not received any employment offers. If the only change was voluntary resignation instead of redundancy, the fund would have made the same payment as it had no knowledge of any other relevant facts. The payment therefore did not exceed the amount that could reasonably be expected on voluntary termination and therefore no part of it constituted a genuine redundancy payment under section 83-175(1).

Treasury has released exposure draft legislation for consultation on a proposed instant tax deduction of up to $1,000 for Australian tax residents who earn assessable income from work, commencing from the 2026-27 income year. For further details about the individual’s proposed tax deduction, refer to the Personal Tax section in this update.

From an employment perspective, amendments will be made to the FBT law with effect for FBT years commencing on or after 1 July 2027 so that:

• The ‘otherwise deductible’ rule does not apply to expense payment fringe benefits for work-related expenses covered by the standard deduction and provided under a salary-packaging arrangement, and

• The FBT exemption for eligible work-related items is limited to benefits that have not been provided under a salary-packaging arrangement and is no longer limited to substantially identical items. 

The draft Explanatory Materials indicate that Treasury will monitor taxpayer behaviour for attempts to undermine the integrity of the standard deduction by shifting their work-related expenses into other fringe benefit arrangements and may consider further amendments in the future. 

Employers with salary-packaging programs should monitor this measure closely and consider the potential impact on their FBT position once the legislation is finalised.

The Australian Taxation Office (ATO) has released the combined global and domestic minimum tax return (CGDMTR) for Pillar Two. The CGDMTR combines the foreign lodgment notification, Australian IIR/UTPR Tax Return (AIUTR), and Australian DMT Tax Return (DMTR) into one form, with the separate lodgment requirements met when the relevant section of the CGDMTR is completed and the CGDMTR is lodged.

For a designated local entity (DLE) lodging the form on behalf of group entities, the ATO online services platform has a limitation of 20 entities, which includes the DLE. If a DLE needs to lodge for more than 20 group entities, the CGDMTR will need to be lodged through an API solution, which will support CGDMTR lodgments for up to 300 entities.

Note that the GloBE Information Return (GIR) and the CGDMTR are separate returns and must be lodged separately. 

Legislative instrument Taxation (Multinational—Global and Domestic Minimum Tax) Amendment (2026 Measures No. 1) Rules 2026 has been registered and makes amendments to the Taxation (Multinational—Global and Domestic Minimum Tax) Rules 2024 to ensure that administrative guidance released by the Organisation for Economic Cooperation and Development (OECD) is incorporated appropriately to ensure the effective operation of Pillar Two top-up taxes in Australia. The changes:

• Clarify the operation of Australia’s domestic minimum tax (DMT) in relation to stateless entities with an Australian nexus.

• Refine the interaction between Australia’s DMT and tax consolidation rules to ensure it operates appropriately to allocate domestic top-up tax amounts from subsidiary members (including those that are a JV subsidiary of a Joint Venture) of the tax consolidated group to the head company, and ensure that the top-up tax amount is not allocated to a head company that is an Excluded Entity or a Securitisation Entity.

• Ensure covered taxes are appropriately allocated, consistent with the allocation of GloBE income for a reverse hybrid entity or hybrid entity, i.e. taxes imposed by Australia, as the jurisdiction of location or creation of the reverse hybrid or hybrid entity will be pushed down to that entity if the taxes are recorded in the accounts of the constituent entity-owner. 

• Ensure that Australia’s DMT will function properly, i.e. since Australia is specified as having a Qualified DMT, amendments are made to the Rules to ensure that domestic top-up tax can apply to Australia.

• Add a foreign currency translation rule for the conversion of amounts of top-up tax calculated in a foreign currency to Australian dollars.

The Amending Rules apply retrospectively from 1 January 2024.

The ATO has recently updated its website guidance regarding country-by-country (CBC) reporting obligations for entities that lodge a return not necessary (RNN). Automatic temporary local file administrative relief is available for such taxpayers where certain conditions are met, including that the entity lodging the RNN must not be the only CBC reporting entity in the CBC reporting group with an Australian presence. This administrative relief applies to income years starting from 1 January 2024 but does not apply to income years starting from 1 January 2027 onwards.

Importantly, this does not relieve entities of an obligation to lodge a master file or CBC report, and does not apply if the entity is the only CBC reporting entity in the CBC reporting group with an Australian presence (in which case, all three statements—local file, master file, and CBC report—must still be lodged).

The ATO has released draft Practical Compliance Guideline PCG 2026/D1, which applies to foreign banks who conduct their banking business in Australia through a branch (permanent establishment/PE). The draft Guideline outlines the ATO’s compliance approach to determining the risk-weighted assets (RWA) attributable to the PE for the purposes of the thin capitalisation rules for inbound banks in section 820-405 of the Income Tax Assessment Act 1997.  

At the outset, the draft PCG indicates that the ATO will seek to administer the relevant law on the basis of its view that the RWAs attributable to a PE should reflect the geographical location of the economically significant activities relevant to the assets. It sets out a risk assessment framework comprising low-risk through to medium- and high-risk arrangements, and sets out its expectations in relation to documentation and evidence.

Appendix A to the draft PCG sets out examples to illustrate the practical application of the ATO’s compliance approach. Appendix B provides historical context to assist in understanding the rationale for developing the Guideline. The PCG also highlights several other tax issues that affected taxpayers may need to consider if they have made changes to their approach to attribution of RWAs as a result of adopting an approach based on economically significant activities.

The final PCG is proposed to take effect from the first income year that commences six months after its date of issue. It will also apply to assets in existence as at and after the date of effect of the Guideline. The ATO will also review the use and application of the Guideline over the next three years following its finalisation, and will consult on any proposed material changes to the Guideline.  

Comments close 8 May 2026.

The OECD has published the OECD Secretary-General Tax Report to G20 Finance Ministers and Central Bank Governors, which sets out recent developments in international tax cooperation, including the OECD’s support of G20 priorities, such as the implementation of the BEPS minimum standards, the global minimum tax framework, and tax transparency. It was prepared by the OECD ahead of the First G20 Finance Ministers and Central Bank Governors’ Meeting under the United States G20 Presidency, held on 16 April 2026 in Washington, D.C., United States. The report notes the following key issues:

• Updates on the Global Minimum Tax, including the Side-by-Side Package, proposed update to the GloBE Information Return (GIR) and the GIR XML schema to incorporate the Side-by-Side package, further signings of the Multilateral Competent Authority Agreement on the Exchange of GloBE Information (GIR MCAA), and the activation of a wide network of exchange relationships in time for first exchanges in December 2026. In addition, further Administrative Guidance is currently being developed on a routine profits safe harbour and a de minimis simplification to take the place of those tests in the Transitional CBCR Safe Harbour.

• Following the conclusion of Side-by-Side negotiations, there is a renewed appetite among Inclusive Framework members to resume discussions on tax challenges arising from the digitalisation of the economy. 

• The OECD continues to support the implementation of Amount B, the simplified and streamlined approach for pricing routine marketing and distribution activities. 

• The Inclusive Framework is evaluating tax challenges associated with increased cross-border worker mobility, including remote working, business travel, commuting, expatriations, and “digital nomads”.

• The OECD is taking a holistic approach to tax certainty across three pillars: simplification, dispute prevention, and dispute resolution. This includes an increased emphasis on cooperative compliance programs, bilateral and multilateral Advance Pricing Arrangements (APAs), joint audits, and extending advance certainty mechanisms beyond transfer pricing into broader areas of international tax.

New law has been enacted in New Zealand to change its thin capitalisation rules to encourage and attract foreign investment in privately owned infrastructure projects in New Zealand. Under the new rules that apply for the 2026-27 and later income years, interest costs that would otherwise be considered non-deductible under New Zealand’s thin capitalisation rules are allowed to be deducted where the entity and the debt satisfy certain conditions. In short, the entity must meet the requirements of being a qualifying infrastructure entity, with a qualifying infrastructure asset and qualifying infrastructure debt, and make the necessary election. Read more in PwC NZ Tax Tips.

Following the release of the ATO’s Taxpayer Alert TA 2026/1, which flagged concerns about contrived property development arrangements (PDAs) between related parties, the ATO has now released Draft Practical Compliance Guideline PCG 2026/D2, which sets out the Commissioner’s compliance approach in respect of the application of the anti-avoidance rules to PDAs involving long-term construction contracts. The draft Guideline provides a risk assessment framework on the application of the general anti-avoidance rules in Part IVA of the Income Tax Assessment Act 1936 and sets out factors that the ATO will take into account in deciding whether or not it will devote compliance resources to further examine these PDAs. It does not mean that the general anti-avoidance rules will necessarily apply. An Appendix to the draft PCG outlines the types of evidence that the ATO is likely to consider when reviewing arrangements. 

When finalised, the Guideline is proposed to apply to arrangements entered into before and after its date of issue. Comments are due on the draft PCG by 15 May 2026.

For more information, as well as a roundup of the latest income tax issues for real estate, see our updated Tax Alert.

The ATO has updated the following Practice Statements to include taxpayer vulnerability such as family violence, financial coercion, sudden homelessness, or serious mental health challenges as an example of circumstances beyond the entity’s control, or as an example of exceptional or unforeseen circumstances as a relevant factor to be considered by the ATO in either granting a lodgment deferral or making a debt release, waiver, or penalty remission decision:

• PS LA 2005/2 Penalty for failure to keep or retain records 

• PS LA 2011/17 Debt relief, waiver, and non-pursuit

• PS LA 2014/4 Default assessment penalty 

• PS LA 2011/14 General debt collection powers and principles

• PS LA 2011/15 Lodgment obligations, due dates, and deferrals 

• PS LA 2003/7 How to treat a request to lodge a late objection

The above statements have also been updated to align with amended Practice Statement style and formatting requirements. 

Second Commissioner Jeremy Hirschhorn has delivered a speech at the Tax Institute’s Financial Services conference. Among other matters, the Second Commissioner discussed the ATO’s current biggest challenges. This included closing the tax gap and the growing tax debt book that remain a challenge. He also indicated that the ATO will take a tougher future approach to interest, particularly around remission of the now non-deductible general interest charge (GIC). Specifically, the speech indicates the ATO wants to curb the use of unpaid tax as a form of de facto working capital, where businesses effectively rely on the ATO as an overdraft in the expectation that interest will later be remitted. Over the next period, the ATO is looking to be more explicit and consistent in its stance in relation to charging interest. Additionally, Payday Super was noted to be a challenge, as was tackling fraud and scams.

The speech also considered views on where the tax system may go next. The Second Commissioner speculated, among other matters, that data-sharing may continue to expand, and noted that, in terms of tax instalments, the ATO was actively exploring, currently on an elective basis, the ability to base instalments on current period profitability, rather than as a percentage of turnover, ideally within small businesses’ natural business software systems.

As part of the ATO’s Modernisation of Tax Administration Systems (MTAS) program, improved tax administration for trustees, beneficiaries, and tax agents is coming in Tax Time 2026 and 2027.

Acting Assistant Commissioner Nicholas Bell has provided a spotlight of what’s on the horizon for trust administration, sharing how the MTAS program will roll out over the coming years. From 1 July 2026, the ATO will use trust statement of distribution data to pre-fill income tax returns for individual beneficiaries.

In Tax Time 2027, the ATO will expand pre-fill to non-individual entities, as well as introduce interactive validations that will check information in the trust tax return against ATO-held data and identify errors for correction as part of the lodgment process. The ATO will also remove limitations on the number of beneficiaries that can be included in electronic lodgment software.

In Commissioner of Taxation v Morton [2026] FCAFC 31, the Full Federal Court has unanimously dismissed the Commissioner’s appeal, finding that no part of the proceeds of the sale of pre-capital gains tax (CGT) land was assessable income.

The taxpayer, a retired farmer, was the owner of a parcel of land that, following rezoning as residential land, was developed, subdivided, and then sold as individual allotments as part of a housing estate. The taxpayer claimed that the proceeds from the sale of the allotments were capital receipts derived upon the realisation of a pre-CGT asset, and therefore not assessable, and that the development, subdivision, and sale constituted no more than an enterprising means of achieving the best price when realising his capital asset. The Commissioner appealed against the decision of the Federal Court in Morton v Commissioner of Taxation [2025] FCA 336 that found that at no stage did the taxpayer embark on a business of developing land, or venture any lot into a profit-making scheme, with the result that no part of the sale proceeds was assessable.

The Full Court did not accept the Commissioner’s contention that the developer had been appointed to carry out the development ‘on behalf’ of the taxpayer as his agent, and similarly did not agree that the taxpayer had therefore ventured the land to a business venture or to a profit-making undertaking or plan. 

The High Court has refused the taxpayer’s application for special leave to appeal to the High Court from Kilgour v Commissioner of Taxation [2025] FCAFC 183. In that case, the Full Federal Court unanimously determined that the taxpayers were not entitled to small business relief under Division 152 of the ITAA 1997 in respect of capital gains from the sale of shares. For further details of that case, see the February 2026 edition of Monthly Tax Update.

The Australian Taxation Office (ATO) has updated its Practical Compliance Guideline PCG 2019/5, which outlines the Commissioner’s discretion to extend the two-year period to dispose of dwellings acquired from a deceased estate to qualify for the capital gains tax (CGT) main residence exemption. Importantly, the update provides that where a taxpayer’s circumstances fall outside of the safe harbour specified in the Guideline, a taxpayer may submit a request for an exercise of the Commissioner’s discretion in writing, rather than through the private ruling process.

In Commissioner of Taxation v Hall [2026] FCAFC 43, the Full Federal Court has unanimously allowed the Commissioner’s appeal from the decision of the Administrative Review Tribunal (ART), finding that no deduction was available to a taxpayer for occupancy expenses being the proportion of rent on his residential property referable to the use of his home office or car expenses.

The taxpayer was a sports presenter and producer employed full time working in Melbourne. In the 2020-21 income year (during the COVID-19 lockdowns in Melbourne), the taxpayer undertook all his digital work roles from a laptop in a spare bedroom at his home, and his live roles from studios in Melbourne.   

On the matter of whether the portion of rent the taxpayer paid in relation to use as a home office was deductible, the Full Federal Court found difficulties with the ART’s reasoning. First, the ART did not directly address the actual outgoing, which was a singular amount of rent paid for a two-bedroom apartment. Treating the actual outgoing as two outgoings facilitated a process of reasoning that, in substance, permitted the Tribunal to conclude that the additional expenditure was not purely of a private or domestic nature; rather it was for the purposes of gaining his assessable income.

Further, the Court noted that an expense that is to some extent incurred in earning income (because it is sufficiently connected to income-earning activities) can still be non-deductible to that same extent if its essential character is domestic. An outgoing does not need to be ‘purely’ private or domestic to be excluded by section 8-1(2)(b) of the Income Tax Assessment Act 1997. 

Ultimately, the Court concluded that the essential character of the expenditure was rent paid to secure domestic accommodation. While the prevailing conditions required the taxpayer to work from home, this necessity did not alter the essential character of the expense. Working from home was not a matter of choice or convenience. The expenditure was still rent for domestic accommodation in its essential character, and so was non-deductible.

On the matter of car expenses, the Court found that the work performed by the respondent at his home (the Digital Role) was distinct from the work performed by him at his employer’s studios (the Live Role). Accordingly, the taxpayer ceased income-producing activities when he stopped performing work at home and commenced different income-producing activities upon starting work at the studios. The taxpayer was not performing either his Digital Role or his Live Role or any aspect of his employment whilst driving. As a result, no deduction was available for the car expenses, because those expenses were not incurred in the course of producing assessable income. 

In Bhattacharya and Commissioner of Taxation (Taxation) [2026] ARTA 538, the ART has dismissed a taxpayer’s claims for self-education expenses on online educational and training courses, finding no sufficient nexus between the expenditure and his income-earning activities.

The taxpayer argued that he was initially employed as an enterprise architect. While his role did not initially include any sales and marketing responsibilities, the taxpayer argued it evolved to include marketing and sales responsibilities, including during the relevant income year.

While the Tribunal accepted that the taxpayer’s role was fluid, and that it came to include aspects of business development, in the sense that doing good technical work for current clients could lead to more work from them and others, the Tribunal did not accept that the taxpayer’s role became one that featured sales and marketing responsibilities, either formally or informally. There was nothing in writing from his employer that required the taxpayer to undertake sales and marketing activities, let alone take self-education courses in those areas. 

The Tribunal was not satisfied that the taxpayer had demonstrated that the relevant expenditure had the requisite nexus with his earning activities in his role as an employee. The relevant expenditure was not required by his employer, did not maintain or improve a skill or some specific knowledge on which his income-earning activities were based, and did not lead to a promotion or an increase in his income from his then-current income-earning activity. 

The ATO has updated its Practical Compliance Guideline PCG 2024/2, which sets out the methodology that has been developed to calculate the cost of electricity when an electric car is charged at an employee’s or an individual’s home. The EV home charging rate in Table 2 of the Guideline has been updated to include a revised cents per kilometre rate of 5.47 cents for the FBT year or income year commencing on and after 1 April 2026.

In response to impersonation scams, the ATO has announced that individual taxpayers can now instantly confirm whether a call claiming to be from the ATO is genuine, with the launch of a new in-app security feature. The new ‘verify call’ feature in the ATO app allows users to confirm, in real time, they are speaking with the real ATO and not a fraudster. 

Delivered as part of the ATO’s Counter Fraud Program, this feature bolsters the ATO’s existing fraud controls in the app, which are designed to keep taxpayers’ accounts secure, and includes real-time messages when key changes are made to their account as well as account-locking to prevent unauthorised access or fraudulent activity.

In Rowland and Commissioner of Taxation [2026] ARTA 561, the ART denied the taxpayer’s appeal finding that her clothing expenses were not deductible under section 8-1 of the Income Tax Assessment Act 1997. The taxpayer who was employed by an operator of several fashion brands had claimed she was required to wear branded clothing as a corporate uniform and would be reprimanded for failing to do so. 

The Tribunal found there was no definite contractual obligation to wear branded clothing and no risk of formal reprimand—the taxpayer had merely perceived an implicit expectation to dress well. The clothing did not constitute a uniform, as it lacked employer-specific logos, was not sufficiently distinctive, changed with seasonal fashion trends, and could be worn outside work. 

The Tribunal held that the taxpayer’s income-producing activities were the delivery of L&D programs—not the wearing of clothes—and the expenses were entirely private in nature, reflecting personal choice rather than a genuine work requirement. The Tribunal affirmed the Commissioner's objection decision in full. 

This case reinforces that expenditure on conventional, commercially available clothing will rarely satisfy the section 8-1 nexus requirement, even for employees of fashion brands. A compulsory contractual obligation, supported by employer documentation, is critical—a perceived expectation of professional presentation is insufficient. Branded retail clothing will generally not qualify as a “uniform” unless it is distinctively identifiable to the employer, prescribed by express policy, and unaffected by fashion trends. The case also underscores the need for complete records and corroborating employer documentation.

In Hui and Commissioner of Taxation (Taxation and business) [2026] ARTA 570, the ART accepted that the taxpayer who was employed as a registered pharmacist at two locations genuinely used his mobile phone for work purposes, including filling electronic prescriptions and using pharmacy-related apps via Bluetooth connectivity with his hearing aid. However, it found his claimed 50% work-use apportionment was unsubstantiated and instead allowed 36%, consistent with the percentage already allowed for his iPad. The Tribunal set aside the decision under review only in respect of mobile phone expenses, substituting a decision allowing 36% as work-related deductions, and remitted the matter to the Commissioner to amend the assessment accordingly.

In relation to the taxpayer’s claim for business-related travel expenses, the taxpayer’s car expense logbook was found to be unreliable due to non-contemporaneous entries, overstated distances, and the misrecording of private travel as business travel. After applying other judicial decisions and TR 2021/1, the Tribunal held that travel between the two pharmacies was travel between places of unrelated income derivation and therefore not deductible. Accommodation and meal expenses in one of the locations were similarly denied as private expenses.

The case underscores the importance of contemporaneous and accurate record-keeping for logbook-based car expense claims, the need for taxpayers to disclose relevant personal circumstances to the Commissioner early in any dispute, and the principle that travel between places of unrelated employment is generally not deductible.

In Delma Investments Pty Ltd v Commissioner of State Revenue [2026] VSCA 53, the Victorian Court of Appeal has upheld a decision to deny a corporate taxpayer an exemption from land tax for primary production land, as no owner was engaged in a sufficiently full-time capacity to qualify for the exemption.

The land in question was located in an urban zone in greater Melbourne, and had been used for farming activities by the owning family since it was first acquired. The director and shareholder of the taxpayer company worked in two businesses and had allocated approximately 24 hours per week to the primary production business carried out on the land in question. In the relevant years, the land was assessed to land tax, with the Commissioner holding that the requirements to qualify for the primary production land tax exemption under section 67 of the Land Tax Act 2005 (Vic) had not been met due to the failure of the additional requirement in section 67B that applies when the owner is a company not acting in the capacity as trustee of a trust to which the land is subject.

The Court of Appeal dismissed the taxpayer’s appeal, concluding that the relevant legislation contains no words that might suggest that the relevant person’s ‘capacity’ to be ‘normally engaged in a substantially full-time capacity’ in the business of primary production is to be understood as requiring an assessment of the ‘needs’ or ‘requirements’ of the business rather than the personal commitment of the person. The phrase ‘in the business of primary production’ also does not import any reference to the ‘needs’ of the business, or anything like it. It simply identifies where the person must be engaged, namely, ‘in the business’. Finally, the Court of Appeal noted that Parliament clearly intended that a relevant person should demonstrate a sufficiently high level of engagement—and hence connection—to the specific primary production business on the relevant land, regardless of how the person spends the balance of their time.