1 October 2026

The Australian Taxation Office (ATO) has issued the following findings reports on its income tax and goods and services tax (GST) assurance program reviews completed up to 30 June 2026:

• Top 100 income tax and GST: Most large businesses continue to meet their tax obligations, with 62% of Top 100 taxpayers now holding an overall high assurance rating for income tax (down from 64% in the prior year, mainly because more taxpayers received a rating for the first time in 2026). For GST, 43% of Top 100 GST reporters attained high assurance (an increase from 38% in 2025). The ATO also reports that it remains focused on real-time engagement, supporting its approach of raising and resolving potential compliance concerns as they arise, and reducing compliance costs for both businesses and the ATO. Over 95% of Top 100 taxpayers now have current year (real time) justified trust reviews underway, while 80% of the population have no past year justified trust reviews outstanding. However, a small number may have other investigations into specific matters underway, including audits.
• Top 1,000 income tax and GST: The ATO continues to see high levels of assurance in the Top 1,000 population, with 89% achieving high or medium assurance within the income tax population and 95% achieving an overall high or medium assurance rating for GST. The ATO reports continued improvements in the tax risk management and governance framework of Top 1,000 taxpayers, with most taxpayers having effectively designed controls in place for the management of tax reporting as at their last review. In reviews undertaken in the 2025–26 financial year, 73% of Top 1,000 taxpayers achieved a stage 2 or stage 3 rating for tax governance. For relevant investment industry entities, approximately 59% achieved a stage 2 rating for governance over third-party data.

Read more about the insights to be gleaned from these findings reports in our Tax Alert.

The ATO has released its findings report about how it provided tax certainty to public and multinational businesses for the 2021–22 to 2025–26 financial years. The report details:

• Insights about the requests for tax certainty that the ATO receives (e.g. through private rulings, class rulings, and early engagement)
• Observations about the time it takes the ATO to provide its service offerings and the key factors that impact its timeliness
• For the Advice and Guidance (A&G) program, the ATO’s key findings about the outcomes of its engagements
• For the Advance Pricing Agreement (APA) program, observations and insights regarding trends and changes to the APA population composition and demographics

The insights from this report are used by the ATO as part of its commitment to continuous improvement of the programs. The ATO also uses the findings and observations to inform how it can better educate and assist taxpayers to obtain tax certainty through the most effective and efficient use of both programs.

The ATO has released its findings report outlining its key findings and observations on income tax, petroleum resource rent tax (PRRT), and GST disputes for 2025–26. The report covers:

• Compliance results
• Disputed assessments
• Dispute resolution: objections, settlements, litigation, and mutual agreement procedures (MAP)

Key highlights include:

• The ATO’s compliance activities in respect of public and multinational businesses continue to raise significant liabilities, with an additional $2.2 billion paid voluntarily because of ATO compliance actions taken in prior years as well as preventative compliance intervention. The report also notes that the ATO raised $2.05 billion in total income tax liabilities (including interest and penalties) during 2025–26 as well as $305 million in total GST liabilities (including interest and penalties).
• Despite large business being one of the most compliant sectors, disputes with large business continue—of the ATO’s current 129 audits, 35 relate to taxpayers in the Top 100 population and 65 relate to taxpayers in the Top 1,000 population.
• Global profit shifting also continues to be a major focus in disputes, with around two-thirds of current income tax audits involving behavioural risks relating to international related party dealings, and cross-border investments and structures. Transfer pricing and arm’s length conditions continue to attract the ATO’s attention, with the ATO analysing a greater number of arrangements that involve transfer pricing mischaracterisation, and other related risks and issues, such as royalty withholding tax. The ATO is also continuing to examine cross-border financing and arrangements where taxpayers seek to structure their affairs to gain access to debt deductions or treaty benefits.
• In 2025–26, the ATO settled 30 disputes with public and multinational businesses, securing $1.31 billion of tax revenue.

The ATO has issued its findings report on the Reportable Tax Position (RTP) Schedule Category C disclosures in the 2024–25 financial year as of 30 June 2026.

This includes a breakdown of lodgment and disclosures by entities based on their program categorisation (i.e. the Top 100, Top 1,000, Large risk strategy, and Medium and emerging risk strategy program segments) over a four-year period. In summary, the following observations are noted:

• Over the four years between 2021–22 and 2024–25, the number of disclosures has increased by over a third and the number of RTP Schedules lodged has steadily increased by 14%. This reflects the progressive expansion of the lodgment requirements and growing population. The Top 1,000 population is the largest lodging and disclosure population segment.
• Overall, there has been an increase in low-risk arrangements and a decrease or no change in the proportion of high-risk disclosures.
• Overall, the data from RTP Schedule disclosures indicates high levels of voluntary compliance by the large corporates reporting population. The ATO’s data checks show that some lodgers do make errors when responding and that the ATO uses these insights to improve its instructions and follow-up compliance activities.

The High Court has refused the taxpayer’s application for special leave to appeal against the decision from Tabcorp Maxgaming Holdings Limited v Commissioner of Taxation [2026] FCAFC 30, in which the Full Federal Court found that the taxpayer did not have a ‘financial arrangement’ within the meaning of section 230-45 of the ITAA 1997 in relation to an asserted contingent right said to arise under a contract. Accordingly, the taxpayer was not entitled to a deduction for the loss arising when that arrangement ceased.

The ATO has updated its web guidance to help eligible companies understand the steps required to apply for the Hydrogen Production Tax Incentive (HPTI).

The HPTI is a refundable tax offset that supports companies producing renewable hydrogen in Australia by providing an offset of $2 per kilogram of eligible hydrogen produced. To be eligible, both the company and the hydrogen produced must meet the HPTI eligibility requirements. The incentive is jointly administered by the Clean Energy Regulator (CER) and the ATO. To claim the offset through their company tax return, companies must first complete the required certification and registration processes with the CER.

The ATO recently refreshed its guidance on “Super for sportspeople, performers, film makers and related activities”, which sets out its views on SG obligations owed to individuals under the extended meaning of employee contained in section 12(8) of the SGAA, covering arrangements with persons such as influencers, artists, and presenters.

If an individual is engaged to perform, present, or participate in activities such as playing sport, performing music, dance, or entertainment, undertaking promotional activities, or making films and recordings, those individuals are generally treated as employees for SG purposes, regardless of whether they have an ABN, issue invoices, call themselves independent contractors, or are engaged on a one-off or hobbyist basis. These provisions extend to a wide range of individuals, including singers, DJs, actors, dancers, stand-up comedians, athletes, fitness instructors who physically demonstrate movements, fashion models, social media influencers, guest speakers, and esports competitors. Relevantly, SG obligations also apply in respect of individuals who provide services that are required for a performance to occur, such as stagehands, sound and lighting engineers, make-up artists, choreographers, and referees, as well as those engaged in the making of films, tapes, discs, or in recording content for online streaming, television, or radio broadcasts.

The ATO guidance also deals with the impact of engaging persons through intermediaries, identifying non-labour components to which SG may not apply, complications arising from revenue-sharing arrangements, and the relevance of engaging individuals who are hobbyists or retirees.

Treasury released the exposure draft for the new FBT rules on electric vehicles (EVs) that seeks to give effect to the Government’s 2026–27 Federal Budget proposal.

The draft law outlines a phased approach for winding back the FBT concessions for EVs. In brief, the approach will be as follows:

• Phase 1 (up to 31 March 2027): The existing EV discount continues in full.
• Phase 2 (1 April 2027 to 31 March 2029): The full FBT discount will apply only to EVs costing $75,000 or less. EVs costing more than $75,000 but below the luxury car tax (LCT) threshold will receive a 25% discount on their FBT payable.
• Phase 3 (from 1 April 2029): All EVs below the LCT threshold will receive the 25% discount on FBT payable.

Similar to the plug-in hybrid EV (PHEV) changes for the 2026 FBT year, the exposure draft introduces grandfathering provisions for any “financially binding commitments” entered into before the commencement of a new Phase, which will apply to these vehicles up until an alteration is made to the arrangement, after which the current Phase’s rules will apply.

In addition, the exposure draft limits the 25% FBT reduction to vehicles accounted for under the statutory formula method, with no equivalent concessions for the operating cost method.

Employers would be well advised to review their arrangements, particularly with respect to any logbooks and governance around electricity operating costs, to determine the most appropriate means to account for the FBT on EVs provided, as the operating cost method may still provide a better FBT outcome.

Submissions were able to be made to Treasury in response to the exposure draft and closed on 28 September 2026.

The ATO has published new guidance on its website explaining the forthcoming FBT changes for salary-sacrificed work-related benefits, which were enacted as part of the new standard deduction for work-related expenses (Schedule 4 of the Treasury Laws Amendment (Tax Reform No. 1) Act 2026) that will apply to FBT years starting on or after 1 April 2027.

As a result of the introduction of the $1,000 standard deduction for individuals for work-related expenses commencing in the year ending 30 June 2027, employers who currently rely on the “otherwise deductible rule” to reduce their FBT liability on certain expense payment fringe benefits, such as home office expenses, home phone or internet costs, and self-education expenses, will no longer be able to do so where those benefits are:

• Work-related
• Covered by the standard deduction, and
• Provided through a salary sacrifice arrangement

Importantly, the otherwise deductible rule will continue to apply to expense payment fringe benefits that are not covered by the standard deduction, or that are covered by the standard deduction but are not provided under a salary sacrifice arrangement.

In addition, certain work-related items that are currently exempt from FBT, including portable electronic devices, computer software, protective clothing, briefcases, and tools of trade, will lose their exemption when provided through a salary sacrifice arrangement. However, where these work-related items are provided outside of salary sacrifice arrangements, the limit that generally restricted non-small business employers to one exempt item per employee per FBT year for items with the same or substantially identical functions will be removed from 1 April 2027. This means that the exemption will be extended to all employers, provided the items are mainly used for work purposes and are not provided through salary sacrifice.

These changes may have a material impact on the FBT position of employers who currently offer salary sacrifice arrangements covering work-related benefits. Employers should review their existing arrangements well ahead of the start of the 2027–28 FBT year and consider the effect on their FBT liability, record-keeping requirements, and lodgment and payment obligations. 

Revenue NSW has published new guidance on the payroll tax exemption for payments made under employment agency contracts where the end client in receipt of the services is an employer that is exempt from payroll tax, such as a public hospital, charitable organisation, or local council.

Under section 40(2) of the Payroll Tax Act 2007 (NSW) (PTA), payments to service providers may be exempt where the worker is performing work for an exempt client and the wages would have been exempt if the worker had been employed directly by that client. However, exempt client status alone is not sufficient—the employment agent must assess whether the specific work performed relates to the client’s exempt activities. The guidance includes worked examples, which are expected to be useful for taxpayers in making this assessment.

To claim the exemption, the employment agent must obtain a signed Relevant Declaration from the exempt client, with a separate declaration required for each contract. Where a contract spans multiple financial years, a single declaration is accepted for the duration of the contract, provided it is obtained at the time the contract is entered into and the nature of the work does not change. Declarations must be retained for five years.

The guidance also highlights the anti-avoidance provisions under section 42 of the PTA and warns that if a client’s declaration is later found to be incorrect, the employment agent remains liable for payroll tax on the relevant payments.

Taxpayers impacted by these provisions should review their current exemption evidence, the nature of services supplied to exempt clients, and the records supporting any exempt treatment.

The ATO has released an Addendum to Wine Equalisation Tax Ruling WETR 2006/1 concerning the operation of the producer rebate for producers of wine in New Zealand. The changes:

• Reflect amendments made to the A New Tax System (Wine Equalisation Tax) Act 1999 by the Treasury Laws Amendment (Supporting Choice in Superannuation and Other Measures) Act 2026 to increase the maximum amount of WET producer rebate from $350,000 to $400,000 for financial years commencing on or after 1 July 2026
• Update references to the repealed A New Tax System (Wine Equalisation Tax) Regulations 2000 to A New Tax System (Wine Equalisation Tax) Regulations 2019, with effect from 1 October 2019
• Update references to the A New Tax System (Wine Equalisation Tax) (New Zealand Producer Rebate Foreign Exchange Conversion) Determination 2026, with effect from 12 August 2026

In XP Investments Pty Ltd and Commissioner of Taxation (Taxation and business) [2026] ARTA 1890, the Administrative Review Tribunal has affirmed the Commissioner’s objection decision, finding that the taxpayer was not carrying on an enterprise in respect of a property and so was not entitled to claim associated input tax credits (ITCs).

The taxpayer had claimed ITCs in respect of acquisitions said to have been in connection with its property activities, principally the proposed acquisition and development of a property for which a contract of sale was entered into, though settlement never actually occurred.

The taxpayer argued that the property that was to be acquired represented an extension or natural progression of its existing activities, which included the acquisition, renovation, and operation of Airbnbs. The Commissioner, however, disallowed the claims to ITCs, contending that the activities relied upon were no more than preparatory steps toward a proposed development and that the taxpayer had not established that it had commenced carrying on the asserted enterprise.

The central issue the Tribunal considered was whether the taxpayer had established that it was carrying on an enterprise at the relevant time and whether the acquisitions were made for a creditable purpose. Ultimately, the Tribunal found that the evidence provided established preparatory activity towards acquiring the property and securing the finance. However, the evidence did not sufficiently establish the point at which those intentions and preparations became the commencement of an enterprise by the taxpayer. This conclusion did not depend on the subsequent failure of the development.

As the taxpayer was found to not be carrying on an enterprise in respect of the property, it followed that the taxpayer had not established the acquisitions were made for a creditable purpose within the meaning of section 11-15 of the A New Tax System (Goods and Services Tax) Act 1999.

The ATO has released its decision impact statement (DIS) in respect of the decision of the Full Federal Court in Oracle Corporation Australia Pty Ltd v Commissioner of Taxation [2025] FCAFC 145. The underlying dispute concerns whether payments by the Australian entities to an Irish group licensor for the right to distribute software in Australia were royalties under the Australia-Ireland treaty and the domestic definition. The Commissioner suspended the finalisation of the “mutual agreement procedure” (MAP) between the competent authorities of Australia and Ireland under the relevant treaty when the domestic proceedings were initiated, and opposed the application for a stay.

The Full Court, however, concluded that, on the evidence before it, the stay applications should have been granted. The decision did not concern, and did not determine, the substantive characterisation of software payments under Australia’s tax treaties.

In its DIS, the ATO accepts that the findings on the evidence meant Oracle was not a suitable case for the Commissioner to seek special leave to appeal to the High Court. The Commissioner recognises the MAP as an important mechanism for resolving double taxation operating alongside domestic legal processes, but states that where bilateral or administrative processes do not deliver sufficient clarity for consistent treaty administration, judicial consideration remains appropriate. The ATO will continue to seek appropriate opportunities to obtain judicial clarification on these issues, consistent with established treaty principles and the need for clarity in their application to contemporary software arrangements. Comments on the DIS close on 2 October 2026.

For further insight, including details around the newly finalised Taxation Ruling TR 2026/2, refer to our Tax Alert.

The Bill containing the foreign resident capital gains tax (CGT) reforms has now been enacted, with Royal Assent granted on 15 September 2026. This means that the amendments within the Bill to strengthen the foreign resident CGT reforms applicable under Division 855 of the Income Tax Assessment Act 1997 will apply to CGT events happening on or after 1 October 2026.

In particular, this means that not only does the broadened scope of the foreign resident CGT base apply to any CGT events happening from 1 October 2026, but its integrity settings have also been tightened. Of particular note, for any vendors of membership interests with a total value of at least $50 million, a new notification requirement will apply if interests are asserted not to be indirect Australian real property interests (IARPI) and purchasers must now consider if, at any time between when they receive a non-IARPI declaration from a vendor and settlement, they reasonably believe a declaration is false.

At the time of writing, the new notification form is being prepared by the ATO.

For background on the measures as introduced, see our earlier Tax Alert, which has been updated for the passage of the Bill.

The foreign resident capital gains withholding (FRCGW) regime is designed to assist in the collection of tax from foreign residents by imposing withholding obligations on the purchaser of certain Australian CGT assets that they acquire from an entity that is a relevant foreign resident. However, there are instances where the Commissioner may vary classes of amounts payable by legislative instrument. Previously, the Commissioner has exercised this power by the following legislative instruments:

• PAYG Withholding variation for foreign resident capital gains withholding payments—acquisitions from multiple entities
• PAYG Withholding variation for foreign resident capital gains withholding payments—deceased estates and legal personal representatives
• PAYG Withholding variation for foreign resident capital gains withholding payments—income tax exempt entities
• PAYG Withholding variation for foreign resident capital gains withholding payments—marriage or relationship breakdowns
• PAYG Withholding variation for foreign resident capital gains withholding payments—no residue after a mortgagee exercises a power of sale 2020

The Taxation Administration (PAYG Withholding Variation for Foreign Resident Capital Gains Withholding Payments) Legislative Instrument 2026 repeals, consolidates, and replaces the above instruments. The 2026 instrument has, with the exception of the variation relating to acquisitions from income tax exempt entities, the same effect as the instruments that it is replacing. With regard to the variation relating to acquisitions from income tax exempt entities, the evidentiary requirements that must be satisfied for the variation to apply have been amended in this instrument.

The instrument largely commenced from 17 September 2026. 

The Productivity Commission has released its interim report in the fabricated structural steel safeguards inquiry considering trade barriers, such as tariffs, quotas, or tariff rate quotas. This is particularly relevant to anyone importing, fabricating, or specifying structural steel in Australia. On the evidence before it, the Commission’s interim assessment is that definitive safeguard measures are not warranted, and that the conditions for immediate provisional measures are not met either. 

The competent authorities of Australia and France have entered into a Competent Authorities Arrangement 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 Organisation for Economic Co-operation and Development (OECD) has released its eleventh edition of Tax Policy Reforms: OECD and Selected Partner Economies—an annual publication that provides comparative information on tax reforms across 92 member jurisdictions of the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS) (including all OECD countries) and tracks tax policy developments over time.

Some key observations noted in the report include:

• Revenue-raising personal income tax (PIT) measures in 2025 were often progressive, including higher top rates and reforms to the taxation of capital income.
• Revenue mobilisation and efforts to stimulate growth and investment remained the main stated objectives of corporate income tax (CIT) reform. For the third consecutive year, the average combined CIT rate remained stable.
• Continuing a recent trend, there has been the introduction or expansion of targeted and sector-specific taxes on corporate income, often to raise revenue for the general budget in response to higher public expenditure, including defence spending. For example, increased taxes on banks and financial institutions, often focusing on excess profits.
• Reforms linked to the digitalisation of the economy were among the most significant value added tax (VAT) changes in 2025. Additionally, more jurisdictions extended VAT collection obligations for non-resident suppliers and online platforms.
• Health-related tax increases were one of the most common tax-increasing reform measures introduced in 2025, for example, broadening the tax base to new tobacco and nicotine products, while a number of countries also increased their alcohol taxes.
• Reforms to environmentally related taxes in 2025 reflected a continued balancing of environmental objectives, competitiveness and affordability pressures, and revenue needs.
• Property tax reforms remained less frequent than reforms in other tax areas, but in 2025 they were more clearly oriented towards revenue mobilisation than in previous years, especially through recurrent taxes on immovable property.

The OECD/G20 Inclusive Framework on BEPS (Inclusive Framework) has released a package to support the consistent implementation and application of the Global Minimum Tax (Pillar Two). This includes:

• Terms of Reference and Assessment Methodology for the Full Legislative Review: This is a framework that Inclusive Framework members will use to assess the consistency of domestic rules that implement Pillar Two. It allows Inclusive Framework members to undertake detailed peer reviews of an implementing jurisdiction’s legislation to ensure alignment with the GloBE Model Rules and associated Commentary. The reviews would cover a jurisdiction’s assessment and recognition of the qualified rule status of the IIR, UTPR, and Domestic Minimum Top-up Tax (DMTT), as well as the eligibility for the QDMTT Safe Harbour. Where inconsistencies are identified, the Inclusive Framework will issue recommendations to help jurisdictions address them.  
• An update to the GloBE Information Return (GIR): The updated GIR incorporates the simplifications included in the Side-by-Side package agreed by the Inclusive Framework in January 2026. These revisions to the GIR only apply to GIRs filed in respect of fiscal years commencing on or after 31 December 2025, with a revised XML Schema being developed to incorporate these agreed changes.
• Further Administrative Guidance on the application of the GloBE Model Rules: This addresses the treatment of Explicitly Conditional Taxes and the use of Local Financial Accounting Standards under a Qualifying Domestic Minimum Top-Up Tax (QDMTT).

In the 2026–27 Federal Budget, the Government announced that it would expand the tax incentives for venture capital schemes to help unlock patient capital for young, expanding firms. On 11 September 2026, Treasury released exposure draft legislation introducing these reforms. Under the proposals, from 1 July 2027, the law will:

• Increase the asset value thresholds for eligible investee entities from $250 million to $480 million for Venture Capital Limited Partnerships
• Increase the asset value thresholds for eligible investee entities from $50 million to $80 million for Early Stage Venture Capital Limited Partnerships
• Increase the maximum committed capital for Early Stage Venture Capital Limited Partnerships from $200 million to $270 million
• Increase the threshold at which certain Early Stage Venture Capital Limited Partnership investment returns can be fully tax exempt from $250 million to $420 million

These changes will also close the Eligible Venture Capital Investor program to new applications from 7:30pm AEST on 12 May 2026 (the time of the Federal Budget announcement).

Comments on the exposure draft materials closed on 28 September 2026. Investors in VCLPs, ESVCLPs, and certain other venture capital structures should also note the proposed Innovative Business CGT Concession (discussed in the next section).

Treasury has released exposure draft legislation concerning the introduction of an Innovative Business CGT Concession (IBCC), which proposes to provide a 50% discount on capital gains from certain early-stage investments in innovative start-ups. This is the Government’s response to the impact that the 2026–27 Federal Budget capital gains tax (CGT) reforms have for investors in early-stage and start-up businesses.

Under the IBCC, a 50% CGT discount would apply to capital gains of eligible entities arising from ‘IBCC assets’, that are not disqualified assets, as a result of CGT events occurring on or after 1 July 2027. Consistent with other capital gains for which a discount remains available, the minimum tax on capital gains (which applies from 1 July 2027) will also not apply to these gains. For an entity to be eligible to apply the CGT discount on an IBCC asset, the entity must have chosen to apply the discount rather than apply the cost-base indexation. The entity must also not be a company, complying superannuation entity, or foreign resident, as these entities have different CGT arrangements.

For a CGT asset to be an IBCC asset for a taxpayer, it must be broadly an equity interest issued directly by a company at a time when the company was an ‘IBCC company’ to the entity (or in the case of a gain received through a trust, issued at that time to the trustee of the trust) and that has been held at risk for at least three years. Outside of interests acquired via an employee share trust, it cannot be an equity interest acquired from an entity other than directly issued by the IBCC company.

An IBCC company is broadly defined as an unlisted company that has been incorporated for less than 15 years, remains based in Australia, and is not controlled by another company that has been incorporated for 15 or more years. Further, an IBCC company must not have aggregated turnover exceeding $50 million and must satisfy ‘innovative company’ and ‘predominant activity’ tests. IBCC companies must also be registered with the Industry Secretary and comply with annual reporting requirements.

Transitional rules will apply to allow access to the 50% IBCC discount for capital gains from eligible assets issued before 1 July 2027. The discount is also available for payments of carried interest to general partners in VCLPs, ESVCLPs, and certain other venture capital structures to the extent that the payment represents a capital gain from an IBCC asset and the partner does not choose to apply cost-base indexation rather than the IBCC discount. The discount is not available if the partner is a company, complying superannuation entity, or foreign resident.

Treasury is also seeking feedback on a draft legislative instrument that will apply to companies incorporated before 1 July 2027 as to whether they meet the conditions for the purposes of the requirements of the innovative company test.

The Government has indicated that it will consult separately on a similar legislative instrument for start-ups incorporating on or after 1 July 2027.

Comments on the draft law closed on 28 September 2026.

Treasury has released exposure draft legislation to implement the 2026–27 Federal Budget announcement that would allow more taxpayers to report and pay Pay as you go (PAYG) instalment amounts monthly from 1 July 2027, and also require taxpayers with a demonstrated history of non-compliance with their tax obligations to report and pay their PAYG instalments monthly.

Currently, only entities that meet the criteria to be a monthly payer may pay monthly PAYG instalments. These amendments, which would allow entities to opt in to monthly payments, will provide for those taxpayers’ PAYG instalments to adjust more dynamically to real-time business conditions.

Comments closed on 28 September 2026.

On 9 September 2026, the Federal Court of Australia handed down its decision in Hilton International Australia Pty Ltd v Commissioner of Taxation (No 2) [2026] FCA 1325, dismissing the taxpayer’s appeal and confirming that the general anti-avoidance rule in Part IVA of the Income Tax Assessment Act 1936 applied to a pre-sale restructure of the ownership of a property and subsequent share sale to a third party.

The wider transaction involved pre-sale restructuring steps that consolidated the property and business assets into a single Australian company, along with an intra-group note, and then the sale of the sole share in that company by a newly incorporated Luxembourg entity. On completion, the Luxembourg company received proceeds for the share sale, while the purchaser paid funds directly to the Australian holding company to discharge the intra-group note.

In considering the application of Part IVA to the facts, having particular regard to the commercial and economic substance of the scheme rather than its legal form, the Court accepted the Commissioner’s three alternative postulates: a straight asset sale, the sale of the established holding company, and the sale of a new special purpose company. It rejected the taxpayer’s alternative postulate, which comprised a share sale on a debt-free basis, on the basis that it was itself a Part IVA scheme. The Court concluded that the dominant purpose of entering into and carrying out the scheme was to obtain a tax benefit—the manner in which the scheme was carried out and the disparity between its form and its substance were the most significant factors. The Court was not satisfied that the taxpayer had shown that the stated commercial objectives could only be achieved through the chosen structure or were in fact achieved because of it.

For further details, refer to our Tax Alert.

The Treasurer has asked the Productivity Commission to inquire into opportunities to improve the efficiency and value of non-financial business reporting requirements as part of the Government’s productivity and deregulation agenda. The inquiry will look across the range of Commonwealth non-financial reporting obligations, including corporations and taxation legislation, workplace laws, reporting standards, and environmental legislation, to identify regulatory pain points, and duplication and inconsistencies (for example, differing data definitions, thresholds, and reporting timeframes), and to consider scope for efficiencies such as a ‘tell us once’ approach.

The Commission will consult widely, including with Commonwealth regulators, and is to report to Government within six months. Findings will inform further work to streamline reporting requirements.

The Tax Ombudsman has announced a review into the Australian Taxation Office’s (ATO) administration of Director Penalty Notices (DPN). The review will examine whether before, during, and after issuing a DPN:

1. The ATO’s communications to current and former directors provide adequate and timely information about their obligations, the director penalty, underlying tax debt, and actions that they may take
2. The ATO appropriately and consistently considers the circumstances of the affected directors, including during the recovery of that debt
3. The ATO appropriately and consistently considers and responds to factors such as vulnerability, coercive directorship, and financial abuse

Submissions closed on 29 September 2026. The report is expected to be published by April 2027.

The Minister for Indigenous Australians has announced that remote communities, including First Nations communities, will benefit from free tax assistance and education under the National Tax Clinic program. The program is administered by the ATO and supports outreach services delivered by universities and TAFEs, delivering practical tax and superannuation support that helps people navigate their obligations and entitlements. Six educational institutions have been awarded grants, with a total of $250,000 for First Nations communities and remote communities.

The ATO has updated its PAYG withholding annual report (interest, dividend and royalty payments paid to non-residents) web content to include a link to the latest version of the online template report and a link to the ATO’s new associated completion guide.

The new completion guide—applicable for businesses that pay interest, dividend, and royalty payments to non-residents—has been created to help taxpayers comply with their reporting obligations by clarifying when and how to lodge the PAYG withholding annual report template, with step-by-step instructions on how to complete the report and lodge it.

The 2025–26 PAYG withholding annual report for interest, dividend, and royalty payments is due by 31 October 2026, regardless of any substituted income tax period.

In Sebastian and Commissioner of Taxation (Taxation) [2026] ARTA 1981, the Administrative Review Tribunal has considered the character of the receipt of insurance payments, finding that such payments were income, not capital in nature.

The case concerned the income tax treatment of insurance payments that the taxpayer received after suffering injuries in a motor vehicle accident that left him unfit to return to work. The taxpayer contended that the insurance payments at issue were capital in nature and, as such, not subject to taxation.

Ultimately, the Tribunal found that the taxpayer’s insurance claim was for his lost earnings as a result of the injuries he suffered in the accident. As the taxpayer’s lost earnings would have been ordinary income (and thus assessable income), the insurance payments he received compensating him for such lost earnings also had the character of ordinary income and, as such, were assessable as income to him.

In Quy v Commissioner of Taxation [2026] FCA 1316, the Federal Court has dismissed a long-running dispute concerning a taxpayer’s residency, finding that the taxpayer remained an Australian tax resident despite working overseas for a number of years.

Between 2015 and 2021, the taxpayer (an Australian citizen) lived and worked in Dubai, having been deployed there by his Australian employer on an international assignment. While in Dubai, the taxpayer resided in accommodation that was paid for, in most parts, by his employer. His wife and children remained in the family home in Perth while he worked in Dubai.

This case had been considered initially by the Administrative Appeals Tribunal and subsequently the Federal Court in Quy v Commissioner of Taxation (No 3) [2024] FCA 726, with the initial Federal Court decision remitting the matter to the Administrative Review Tribunal (ART). In its decision, the ART in Quy and Commissioner of Taxation (Taxation and business) [2025] ARTA 174 found that the taxpayer was a resident of Australia for tax purposes. While the taxpayer was not a resident of Australia under the ‘ordinary concepts’ test, as a person whose domicile was in Australia, the ART was not satisfied that the taxpayer’s ‘permanent place of abode’ was outside Australia in any of the relevant years, meaning that he was a resident of Australia under the domicile test.

In this appeal to the Federal Court, the taxpayer argued that the ART had erred in law when considering whether it was satisfied that the applicant’s permanent place of abode was outside Australia. In essence, the taxpayer argued that “living, working and socialising” in another place was sufficient to establish a place of abode, and doing so for “an extended period of time” was sufficient to indicate that such a place of abode was not temporary or transitory. The taxpayer submitted that nothing more was required in order to establish that his permanent place of abode was outside Australia (and, in so far as it was relevant, that he had abandoned residence in Australia).

While the Federal Court noted that different minds might reach different conclusions on whether the taxpayer had a permanent place of abode in Dubai during the relevant years, in its view, the taxpayer had not established that the Tribunal’s failure to be satisfied was due to any “misapprehension, mistake, misconception, unreasonableness or miscarriage of judgment” that would authorise the Federal Court to interfere and set aside the ART’s conclusion. It was open to the Tribunal to conclude that it was not satisfied that the taxpayer had a permanent place of abode outside Australia. That conclusion did not give rise to an inference that the Tribunal misunderstood the statutory test or otherwise erred in law.

The ATO has announced that it will acquire passenger movements data for selected taxpayers from the Department of Home Affairs for 2026–27 through to 2028–29. The data accessed will be electronically matched with certain sections of ATO data holdings to identify taxpayers that can be provided with tailored information to help them meet their tax and superannuation obligations, or to ensure compliance with taxation and superannuation laws.

The Taxation and Related Legislation (Miscellaneous Amendments) Bill 2026 (Tas) has been passed by the Tasmanian Parliament. The measures in the Bill aim to reduce red tape, simplify tax administration, and support investment and housing supply in Tasmania. The Bill makes a range of changes to the duties and land tax laws, including:

• Expansion of the duty concession relating to superannuation funds to include self-managed superannuation funds
• Reduction in the minimum number of new residential dwellings to qualify for Foreign Investor Duty Surcharge relief from 1 July 2026 from 50 to ten or more new residential dwellings in a financial year
• Streamlining refund processes and addressing unintended duty outcomes affecting some inter-generational rural property transfers
• Improving the corporate reconstruction and consolidation duty exemption provisions by:
  • Allowing the duty exemption to apply to companies limited by guarantee
  • Allowing a head corporation to own shares in a corporation prior to the corporate consolidation exercise and remain eligible for a duty exemption
  • Removing the pre-association and post-association tests, bringing the Tasmanian legislation in line with those of other jurisdictions
• Extending from three years to five years the period within which the Commissioner may withdraw a tax assessment to align with existing timeframes applying to reassessments and refunds

The Tasmanian State Revenue Office has issued a Fact Sheet that explains the new measures.

Tasmania’s Short Stay Levy Bill 2026 (Tas) was defeated during its passage in the Tasmanian Parliament. The levy formed part of the Tasmanian Government’s election commitment and was proposed to apply to certain short stay accommodation in Tasmania booked through a booking platform provider where the stay was for less than 28 days, at a rate of 5%.

The Reportable Tax Position (RTP) Schedule is required to be lodged for certain large super funds for the first time for the 2026 income year. The ATO has released the RTP Schedule instructions 2026 for superannuation funds, including how to get the RTP schedule 2026, general administration information, guidance, and examples to work out what RTPs to disclose on the RTP Schedule for super funds.

The RTP Schedule is required with a fund tax return lodged for the entire 2026 income year (12 months or more) and where it has total fund income of $250 million or more in the current year. It is required for such an entity even if there are no disclosures.

In Munro and Commissioner of Taxation (Taxation and business) [2026] ARTA 1653, the Administrative Review Tribunal has upheld an assessment of Division 293 tax, after a taxpayer received a large lump sum payment in arrears.

Following a payroll review by his employer, the taxpayer received a lump sum payment in arrears for amounts that had not previously been paid. The lump sum, which consisted of wages, interest, superannuation, and interest on superannuation, was paid in the 2023–24 income year. Since the taxpayer’s combined Division 293 income and super contributions exceeded the $250,000 Division 293 threshold, the Commissioner issued a notice of assessment for Division 293 tax. The taxpayer argued that the income and superannuation in arrears that was paid in the 2023–24 year should be allocated to the respective income years in which the income would otherwise have been earned and not the income year in which it was received.

While the Tribunal noted that this was not an insensible submission, it stated that the law on the derivation of employment income is settled and has been applied consistently across many cases. Namely, employment income is derived in the year in which it is received regardless of whether it is clearly related to services provided in the earlier income years, as in this case. There exists no discretion, express or implicit, under Division 293 to alter, reduce, remove, disregard, or allocate to another financial year any amount of lump sum from the amount of the taxpayer’s income.