CPA Australia Tax News

This edition was current at the time of publication.

ATO to sharpen focus on private groups compliance in 2026

The Australian Taxation Office has made it clear that the era of pandemic-era leniency is well and truly over. For large private groups, particularly those in the Top 500 program, which comprises of Australia’s largest privately owned and wealthy groups, the ATO’s current posture reflects a decisive shift back to enforcement, assurance and scrutiny of long-standing risk areas – many of which are now being amplified by Australia’s unprecedented intergenerational wealth transfer.

At the core of the ATO’s Top 500 program is a focus on transparency, substantiation and tax governance. Where groups cannot clearly explain or evidence their tax positions, compliance activity is escalating, often with significant exposure to penalties and interest.

Trust taxation is firmly in the spotlight. The ATO continues to see family trust distribution tax (FTDT) triggered unintentionally, often due to a “set and forget” approach to family trust and interposed entity elections. Historic errors – in some cases dating back decades – are now coming to light as trusts are used in succession planning and income-splitting arrangements. While the FTDT provisions are widely regarded as harsh, the ATO’s message is clear: groups should self-review now, particularly while the partial GIC remission (up to 80%) opportunity remains available until 31 December 2026.

Private company benefits and Division 7A compliance remain another major focus. Around 13 per cent of Top 500 engagements raise Division 7A concerns, including undocumented loans, missed repayments and uncommercial arrangements. Unpaid present entitlements and the Bendel case highlights the continued uncertainty in this area, reinforcing the need for robust documentation and conservative risk management.

Capital gains tax continues to feature prominently, particularly where groups fail to recognise CGT events during restructures, succession planning or changes in residency, or where income is incorrectly characterised as capital rather than revenue. Property and construction groups remain a particular focus, with heightened attention on manipulation of income and expense recognition between related-party dealings including through the use of long term construction contracts.

Beyond these core issues, the ATO is also scrutinising “business as usual” income and deductions, GST and FBT governance, international related-party financing and the integrity of not-for-profit structures (with a particular focus on private ancillary funds) within private groups.

The clear takeaway is that proactive governance, early engagement and high-quality advice are no longer optional. In a tighter fiscal environment, the ATO’s tolerance for error particularly among those with capacity to pay  is diminishing.

Jenny Wong
Tax Lead
CPA Australia 

TPB Guidance

On 23 December, while Santa was making a list and checking it twice, the TPB were busy making amendments to their guidance on breach reporting and false or misleading statements. 
The amendments are intended to clarify aspects of the TPB’s policy positions in relation to the 'significant breach' definition and the reporting threshold of 'reasonable grounds' and to reference additional factors tax practitioners may wish to consider when deciding whether to report. 

The revised guidance can be found here:

TPB(I) 43/2024 Breach reporting

2026 TPB compliance priorities

The Tax Practitioners Board (TPB) has released its 2026 compliance priorities to increase transparency for tax professionals and support voluntary compliance. ATO data matching program notice 

The ATO has issued a notice that it will acquire 300,000 child support data from Services Australia for 2024-25 to 2026-27. 

The program's objectives include allowing Services Australia to more accurately assess child support obligations and collect debts. 

Electric car discount statutory review

The government has issued the terms of reference in relation to the statutory review of the electric car discount. The review's main purpose is to evaluate the effectiveness of the Electric Car Discount (which includes FBT exemption and tariff exemption for eligible electric cars) in encouraging the uptake of zero or low emissions vehicles in Australia, and how it contributes to reducing carbon emissions. 

Send comments to: [email protected] by 23 January 2026. 

 

Superannuation and financial planning

ASIC Legislation template error

The Federal Register of Legislation has recently rectified an omission error, with the question restored in the Reference checking template in Schedule 3 of ASIC Corporations and Credit (Reference Checking and Information Sharing Protocol) Instrument 2024/647 (LI 2024/647). 

The error was omission of the dishonesty question in that Schedule, which occurred as part of a ‘compilation’ of LI 2024/647 that was prepared in September 2025 to incorporate an amendment that ASIC Corporations and Credit (Amendment and Repeal) Instrument 2025/590 made. 

$100m compensation for Netwealth members 

ASIC has commenced Federal Court proceedings against Netwealth Superannuation Services Pty Ltd (NSS) and Netwealth Investments Limited, securing over $100m in compensation for more than 1,000 Australians who invested their superannuation in the First Guardian Master Fund. Compensation payments will be made by 30 January 2026.

 

Professional Development

Excel Masterclass series 2026

Featuring a different topic each month, the Excel Virtual Masterclass series focuses on four key areas to improve your Excel effectiveness. This series is designed and delivered by Neale Blackwood with over 20 years' experience in training finance professionals in Excel. Register now.

 

Legislation

Beneficiary TFN reporting for trusts

Treasury has issued the exposure draft of the Treasury Laws Amendment Bill 2025: Modernising trust administration systems. By linking TFNs directly to the trust's tax return, the ATO can more accurately match trust income to the correct beneficiary, supporting pre-filling of individual tax returns and ensuring the correct amount of tax is paid.
Date of effect: The new rules for TFN reporting apply for income years starting on or after 1 July 2026. Quarterly reporting requirements remain for income years before this date.

Send comments to: [email protected] by 23 January 2026.

Registry stabilisation and uplift exposure draft

Treasury has issued the exposure draft of the Treasury Laws Amendment (Business Registries Stabilisation and Uplift) Bill 2025. The draft Bill proposes a series of amendments aimed at strengthening Director ID rules, expanding ASIC powers and unwinding the Modernising Business Registers (MBR) program, including.

• Enhance Director ID requirements
• Expand ASIC powers
• Stabilise business registers.

Date of effect: Most provisions commence on the day after Royal Assent with exception to certain transitional arrangements. The unwinding of the MBR program is proposed to take effect on 30 June 2026.
Send comments to: [email protected] by 23 January 2026

Global and domestic minimum tax return 

The ATO has issued the Taxation Administration (Exemptions from Requirement to Lodge Australian IIR/UTPR Tax Return and Australian DMT Tax Return) Determination 2025 legislative instrument. It provides exemptions from lodging:

1. Australian Domestic Minimum Tax (DMT) returns – for entities that cannot have Australian domestic minimum tax liability; and
2. Australian Income Inclusion Rule (IIR) or Undertaxed Profits Rule (UTPR) returns – for entities that cannot have Income Inclusion Rule or Undertaxed Profits Rule tax liability.

Date of effect: The day following registration at the Federal Register of Legislation, ie 23 December 2025.

Multinational corporation minimum tax amendments

Treasury has registered the Taxation (Multinational -- Global and Domestic Minimum Tax) Amendment (2025 Measures No. 1) Rules 2025 (Amending Rules). The Amending Rules amend provisions incorporating the release of the OECD's Administrative Guidance, including:

• clarifying the limited circumstances where Securitisation Entities would be liable to pay Undertaxed Profits Rules (UTPR) top-up tax;
• inserting an Equity Investment Inclusion Election and the related rules on Qualified Flow through Tax Benefits;
• minor amendments to the Domestic Minimum Tax (DMT) provisions; and
• clarifying the Investment Entity Transparency Election for Regulated Mutual Insurance Companies.

The Amending Rules aim to ensure that administrative guidance released by the OECD is incorporated appropriately in order that Australia's implementation of the GloBE Rules achieves qualified status.

Date of effect: 6 January 2026

 

Rulings and guidance

Category B football players of SANFL clubs

The ATO has issued a factsheet providing guidance on the non-taxability for involvement in Australian Rules Football as a 'Category B player' for a club associated with, or governed by the South Australian National Football League (SANFL). It does not apply to, such as senior players or those playing as a career.

Class rulings

Rulings released:

• CR 2025/87 (CSIRO - studentship or internship stipends);
• CR 2025/88 (WorkCover WA - settlement of compensation claim – Workers Compensation and Injury Management Act 2023 (WA));
• CR 2025/89 (Diabetes Victoria - loans from public and private ancillary funds);
• CR 2025/90 (Equity Mates Media Pty Ltd - employee share scheme – disposal of shares under an off-market takeover);
• CR 2025/91 (Infomedia Ltd - scheme of arrangement and dividends); and
• CR 2025/92 (Leo Lithium Limited - return of capital and special dividend). 

 

Cases

Appeals update: Merchant (Pt IVA and wash sale of shares)

The High Court (Gageler CJ, Gordon, Edelman, Steward, Gleeson, Jagot, Beech-Jones JJ) in October 2025 unanimously granted the taxpayer special leave to appeal against the Full Federal Court decision in Merchant v FCT [2025] FCAFC 56. The Full Federal Court had (by a 2-1 majority, Logan J dissenting) upheld a first instance decision that Pt IVA applied to a scheme where a family trust made a capital loss on a "wash sale" of shares to a super fund.