CPA Australia Tax News

This edition was current at the time of publication.

 

Talking Tax with Jenny

CPA Australia’s Pre-Budget Submission 2026-27

CPA Australia’s Federal Pre-Budget Submission 2026-27 sets out a vision to enhance Australia’s productivity, competitiveness, and prosperity. A central theme of the submission is that Australia must move beyond "piecemeal" changes and instead embrace a comprehensive tax reform roadmap. The current public debate over the Capital Gains Tax (CGT) discount (as well as a proposed net cashflow tax) should not occur in isolation, as it is not a "standalone lever" or "silver bullet" for complex issues like housing affordability and productivity.

Lifting Australia’s productivity requires a sustained effort to reduce the "cumulative regulatory burden" that currently acts as a handbrake on progress. CPA Australia recommends several measures to cut red tape, including:

• Establishing a single tax collector and unified digital platform to consolidate federal and state obligations
• Introducing an annual Small Business Simplicity Index to benchmark the ease of meeting tax obligations
• Reviving small business "fix-it squads" to rapidly resolve administrative pain points.

Instead of "one-off changes" or "piecemeal" adjustments, we need a tax reform roadmap setting out the possible long term reform options. A comprehensive review of the entire tax system to resolve Australia's over-reliance on personal and corporate taxes. 

Tax reform done well can support productivity; done poorly, it creates only uncertainty and distortion. In the short term the government should prioritise fixing red tape that’s become systemic in the tax system. It is time for a holistic approach that provides certainty for all Australian taxpayers.

I welcome your thoughts.

Jenny Wong
Tax Lead
CPA Australia

Consultation on updates to the AML/CTF Rules

Having identified targeted amendments needed to improve the effectiveness of the AML/CTF Rules, AUSTRAC has released several consultation documents.

One proposed amendment is to exclude from item 3 of table 6 in section 6 of the AML/CTF Act services by a real estate agent that involve receiving, holding and controlling, or managing money, accounts or other property as part of the service of managing rental income or expenses through a trust account. 

Steps to avoid compliance action for small businesses

The ATO has issued a media release to remind small businesses about steps to to avoid mistakes and most importantly, avoid compliance action. The key points made for small businesses are:

• seek advice from a registered tax practitioner to avoid common errors and navigate areas of complexity
• stay on top of tax debts or risk firmer recovery actions from the ATO
• keep separate bank accounts for GST and employee withholding to ensure cash is available when lodging
• consider moving away from manual record-keeping in favour of digital tools and the ATO app to report accurately
• prepare for Payday Super starting 1 July 2026.

Rental properties and holiday homes submission

We made a submission to the ATO’s Draft TR 2025/D1, draft PCG 2025/D6 and 2025/D7 on rental properties and holiday homes. A central concern is that the draft guidance reflects a revised ATO interpretation rather than a legislative change, particularly in the application of section 26-50.

Experience suggests that administrative reinterpretation alone may not drive significant changes in taxpayer behaviour. We therefore encourage the ATO to complement the draft guidance with simpler, more user-friendly materials to assist taxpayers in understanding and transitioning to the revised approach for holiday homes.

Modernising tax administration systems submission

We made a submission to Treasury’s Modernising tax administration systems. We recommend an exception be made, so that TFN withholding does not apply if the beneficiary provides their TFN before the earlier of the trust income being distributed or the trust tax return being lodged. 

This practical change would ease compliance without undermining integrity, even though it sits outside the current scope of the Exposure Draft.

OECD tax update

• Updated transfer pricing country profiles
• VAT systems - digital transformation 
• Empowering tax officials

ATO website updates

• Keep your business details secure
• $20,000 instant asset write-off for 2025-26
• Tax consolidated group lodgments guidance for Pillar Two
• Misreporting FBT on personal use of work vehicles
• Payday Super and qualifying earnings - get the facts straight!)SBSCH closure.

SUPERANNUATION AND FINANCIAL PLANNING

ASIC launches consumer website

ASIC has released further support measures for 11,000 Australians who invested about $1.1 billion in the collapsed Shield Master Fund and First Guardian Master Fund. 

The announcement states ASIC will distribute additional information to investors, including access to a dedicated consumer website at takeyoursuperback.com which provides trusted guidance and complaint options for affected investors.

ATO super updates

Superannuation

• New resources for Payday Super
• Super processing schedule
• CRT Alert 002/2026 

PROFESSIONAL DEVELOPMENT

Meet the Tax Ombudsman

Meet the Tax Ombudsman Ruth Owen and share your concerns on tax administration matters – in Perth, Melbourne, Sydney or Brisbane.

Register here.

Lead the way as a confident advisor

This program will empower accountants to transition from technical experts to trusted business advisors, by sharpening advisory, communication, and problem-solving skills and learning how to position advisory services with clients. 

Register here.

Lead with Impact – Virtual Masterclass series

Strengthen your ability to inspire, influence and adapt in dynamic environments. The program focuses on building resilience, fostering meaningful connections, and developing the mindset and skills needed to contribute and lead effectively in a rapidly evolving world. 

Register here.

Division 7A – Core rules

Thursday 12 March | 2.00pm – 3:00pm
Discover the core Division 7A (Div 7A) concepts you should be aware of when you extract non interposed entity. This topic will focus on identifying circumstances when Div 7A applies.

Register here.

Winding up an SMSF 

Tuesday 17 March | 2.00pm – 3.00pm
In this webinar, we take you step-by-step through the process including indicative timelines, how to ensure a smooth audit sign off, strategies to deal with assets that are difficult to liquidate and finalising the SMSF’s reporting requirements with the ATO.

Register here.

 

LEGISLATION

Takeaways from the first sitting week of 2026

The controversial Div 296 "Better Targeted Superannuation Concessions" bill was introduced into Parliament on Wednesday. Despite the consultation period ending in mid-January, there was little change to the proposed tax for balances exceeding $3 million and $10 million. Similarly, the government's Bill regarding genetic testing protections in life insurance saw no progress.

Practitioners waiting for clarity on Payday Super will note that the necessary consequential amendments to the Superannuation Guarantee (Administration) Regulations, covering earnings exclusions and administrative uplift details, were not tabled. Without these, the 1 July implementation remains a significant "loose end." Several Treasury drafts also failed to reach the House, including:

• Trust tax administration: Simplifying beneficiary TFN reporting.
• Business registries: The "stabilisation and uplift" Bill regarding Director IDs.
• R&D tax incentive: Proposed exclusions for tobacco and gambling activities.
• Financial reporting reform: The proposed merger of accounting and auditing boards into "External Reporting Australia".

Super access for child sexual abuse victims

The government has released draft legislation for the Treasury Laws Amendment (Victims of Crime) Bill 2026 and accompanying explanatory materials, establishing a framework to enable victims and survivors of child sexual abuse to access perpetrators' superannuation to satisfy unpaid compensation orders. The draft law would:

• let victims and survivors apply to the ATO for information about a perpetrator's super
• let victims and survivors seek the release of certain amounts to meet unpaid compensation orders
• make compensation debts survive a perpetrator's bankruptcy, so victims and survivors can keep enforcing those debts.

Send your comments by 16 February to: [email protected]

RULINGS AND GUIDANCE

Class ruling

CR 2026/2 (Delta Lithium Limited - in specie return of capital) - Div 125 demerger roll-over relief is not available, and that either CGT event G1 (capital payment for shares) or CGT event C2 (cancellation etc) happened when the in specie distribution of shares was made.

CASES 

Profits of residential properties sale assessable

The ART has affirmed that profits from the sale of three newly built residential units were assessable as ordinary income and that the sales were made during an enterprise for GST purposes but only affirmed one of the GST assessments. The ART concluded that the properties were trading stock and that the profits arising from the sale of the relevant properties was assessable as ordinary income from a business. 

The ART also concluded that the sales were carried out in furtherance of the taxpayer's enterprise for GST purposes and thus the sales were subject to GST under s 9-5 of the GST Act. However, only the sale of 1C had been appropriately attributed to the correct BAS period (the sale of 1E was time-barred, while the sale of 1D was remitted to the ATO).(RRKC and FCT [2026] ARTA 95 Dunne GM, 28 January 2026.)

No entitlement to input tax credits claimed late

The Federal Court has upheld an ART decision that the objection, review and appeal provisions in Pt IVC of the TAA did not activate a taxpayer's right to claim input tax credits (ITCs) in respect of GST returns lodged more than four years after their due date. The time having expired, the right to the ITCs ceased. In turn, "all that the objection decision did in affirming it was to recognise that position". (Barth Family Trust (Trustee) v FCT [2025] FCA 1693, Fed Ct, Logan J, 12 December 2025.)

Taxpayer failed to lodge valid objection

The ART has dismissed an application for an extension of time to lodge an objection as it had no reasonable prospects of success. This was because the taxpayer had not lodged a valid taxation objection, as required by s 14ZU of the TAA. The form lodged by the taxpayer merely referred to "amended assessments" and phone call reference numbers, without identifying any specific objectionable decision. (Aus Loadshifting (ALS) Pty Ltd and FCT [2026] ARTA 116, ART, Smith GM, 2 February 2026.)