CPA Australia Tax News

This edition was current at the time of publication.

Payday Super explained ahead of 2026 rollout

Tax Ombudsman Refreshed Workplan

The Tax Ombudsman’s System Review: Refreshed Work Plan 2025-26 updates the systemic reviews announced in June 2025, aiming to improve the fairness and integrity of tax systems.

Key topics include a review into the ATO’s Online Services for Agents (OSfA) an ATO secure system for registered tax and BAS agents. It allows agents to access a range of client information and services, offering real-time visibility and control over client data. 

However, feedback from the registered agent community has highlighted several issues and concerns with OSfA. Agents have reported inefficiencies and increased administrative burdens
The TO will also review the ATO’s use of Director Penalty Notices (DPNs), which saw a 136% increase in issuance in 2024-25; and the ATO’s engagement with First Nations taxpayers, included following stakeholder input highlighting systemic barriers.

Of note on family trust elections, the report states this is a topic the TO proposes to examine and engage stakeholders on without undertaking a full systemic review. The TO continues to welcome stakeholder feedback on the administrative issues or solutions related to family trust distribution tax and will consider it for inclusion in our 2026-27 work plan.

Modernisation of Tax Administration Systems

The following MTAS changes will be deployed in Tax Time 2026: 

1. Expansion of ATO pre-fill for individual taxpayer to include trust lodgment data 
2. Three additional labels will be added to the 2026 Trust income tax return Statement of Distribution:
   • Non-PP Managed investment scheme amount 
   • Franked distribution related to investments amount 
   • Other assessable foreign source from a financial investment amount.
3. Adding validations to the lodgment software to improve data quality:
   • Valid date of death must be provided for 'No Beneficiary Assessment Code' is "15" or "16"
   • Validate the assessment code and Date of Birth in the Statement of Distribution for an Individual Beneficiary over 18 or under 18 
   • Individual Beneficiary Name (first and last) and DOB are completed in the Statement of Distribution 
   • Non-Individual Beneficiary Name and DOB are incompatible in the Statement of Distribution 
   • Limit providing not necessary information at schedule A

Family Trust Election Report 

The current Family Trust Election (FTE) report in Online Services for Agents (OSfA) displays the following election details: 

• Trust name and TFN 
• Specified individual and date of birth 
• Applicable income year and election commencement date 

ATO website updates

Phoenix Taskforce update

Spotlight on payday super

Superannuation and financial planning

Commissioner's remedial power limitations

The ATO has released information detailing situations where the Commissioner's remedial power (CRP) cannot be used to modify superannuation law operations. This provides clarity on the boundaries and limitations of the CRP in addressing various superannuation-related issues, highlighting when legislative amendments are required instead.

The CRP allows the Commissioner to resolve certain unintended and unforeseen outcomes in the operation of the tax and superannuation laws provided taxpayers will benefit or remain no worse off.

ASIC expands email lodgement options 

ASIC has expanded email lodgement options to 35 paper forms, streamlining regulatory compliance and reducing administrative burden for stakeholders. 

Legislation

ASIC extends relief for foreign financial services providers

ASIC has extended relief from Australian Financial Services (AFS) licensing requirements for certain foreign financial services providers (FFSPs) until 31 March 2027 by releasing the following instruments:

• ASIC Corporations (Foreign Financial Services Providers) Instrument 2025/798
• ASIC Corporations (Amendment) Instrument 2025/799.

The instruments continue three types of relief for FFSPs while the government finalises law reform regarding FFSP regulation:

• sufficient equivalence relief
• limited connection relief
• funds management relief. 

Date of effect: The two instruments continue in effect relief from AFS licensing requirements for certain foreign financial services providers (FFSPs) until 31 March 2027.

Rulings and guidance

Public CbC reporting exemptions: PS LA 2025/2

The ATO has issued Practice Statement PS LA 2025/2: Public country-by-country reporting exemptions. It outlines the ATO's administrative approach to granting exemptions from Public Country-by-Country (CBC) reporting obligations.

Reporting obligations apply to Public CBC entities for reporting periods commencing on or after 1 July 2024, unless they have been granted an exemption.

Class rulings

Rulings released:

• Class Ruling CR 2025/83 (Salary Packaging Australia Pty Limited – benefits provided to fly-in fly-out employees) - the provision of air travel to qualifying employees who are FIFO workers is a residual benefit, which is exempt from FBT;
• Class Ruling CR 2025/84 (TPG Telecom Limited – return of capital and special dividend) – the capital return is not a dividend and the dividend anti-avoidance rules do not apply; and
• Product Ruling PR 2025/15 (North West Rural Supplies Pty Ltd - Prepayment Program) – prepayments incurred under this program are immediately deductible in the income year they are paid.

Cases

ATO loses appeal in business restructure

The Full Federal Court has dismissed the ATO's appeal against a decision that anti-avoidance provisions in the ITAA 1936 (s 45B and Pt IVA) did not apply to a $52m capital reduction that was part of restructuring a business faced with serious Div 7A problems.

As regards s 45B, the Full Court said that given the purpose of the capital return by Methuselah was to fund the epayment of the Div 7A loans owed to each of Mastergrove, Ierna Beneficiary and Hicks Beneficiary, the pattern of dividend distributions by Mastergrove did not support a purpose of a party in entering into or carrying out the scheme to   enable each of Mr I and Hicks Beneficiary to obtain a tax benefit. Turning to Pt IVA, the Full Court agreed with the primary judge that the taxpayers did not obtain a tax benefit in connection with the scheme. (FCT v Hicks [2025] FCAFC 171, Derrington, Feutrill and Hespe JJ, Full Federal Court, 3 December 2025.)

Taxpayer loses appeal cancelling imputation benefit

The Full Federal Court has unanimously dismissed the taxpayer's appeal against a decision affirming an ATO determination under s 177EA of the ITAA 1936 cancelling an imputation benefit.

The court agreed with the AAT that the relevant purpose under s 177EA(3) was the purpose of the persons carrying out the scheme rather than the purpose of the scheme. The court then said that the AAT did not err in law when it assumed that the dividend and the franking credit were both contemplated by the Settlement Deed and that this supported, rather than negated, the view that the taxpayer had a purpose of obtaining an imputation benefit that was not merely incidental. (Ziegler v FCT [2025] FCAFC 168, Full Federal Court, Bromwich, Thawley and Jackman JJ, 26 November 2025.)

Appeals update

The full High Court has unanimously granted the taxpayer special leave to appeal against the decision of the NSW Court of Appeal in Chief Commissioner of State Revenue v Uber Australia Pty Ltd [2025] NSWCA 172. The Court of Appeal had determined that Uber Australia was liable for payroll tax on payments under contracts with its drivers, thereby allowing the Chief Commissioner's appeal.

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