CPA Australia Tax News

This edition of Tax News was current at the time of publication on 16 July 2026. You can subscribe to the Tax News email in your comms preference centre. 

Trust minimum tax: the consultation paper 

Treasury's consultation paper on the 30% minimum tax on discretionary trusts was released on 8 July, and submissions close 31 July. There is one idea in the paper deserves particular attention.

Tucked away at page 11 is an "election model": allowing an existing discretionary trust to make an irrevocable election to be treated, and taxed, as a fixed trust, without any asset transfer, and therefore without the state transfer duty and contract novation problems that make physical restructures commercially impossible for many businesses. Broadly speaking, duty costs could range from nothing in Queensland and South Australia to thousands in Victoria for an identical transaction, so an election that potentially sidesteps these costs could be an attractive option.

A fixed trust election suits passive investment and landholding trusts. It might not be a preferred vehicle for trading businesses, because a fixed trust still cannot retain profits: undistributed income is taxed at the top marginal rate. The businesses such as construction, property and other capital-intensive trading groups arguably need a corporate structure, with retention at the corporate rate and access to tax consolidation. In such cases, perhaps there should be both the option to be taxed as a fixed trust or a company for income tax purposes. But I see more complexity being added to the tax system for small businesses in order to avoid the state/territory transfer duty risk from the option to restructure out of discretionary trusts into a corporate structure.

For many small, family-only businesses, given the duty risk, the rational response may be to do nothing — keep the trust and pay the minimum tax as restructuring costs incurred could mean three-to-four-years before they break-even in most states.

Our submission is due 31 July, and member input on real client scenarios — particularly multi-trust groups, wind-down businesses and premises-holding structures — is invaluable.

In addition, if you want to be in the room where these debates happen: CPA Tax Forum 2026 to be held in the Hilton Sydney this year and brings together the people shaping this reform featuring — Rob Heferen, Commissioner of Taxation, Ruth Owen, Tax Ombudsman,  Diane Brown, Deputy Secretary, The Treasury, the Hon David Bradbury, Chair of the Board of Taxation , plus sessions on AI in the tax function with the ATO's Second Commissioner and many more tax technical sessions with the ATO. Registrations are open now: Program - CPA Australia Tax Forum 2026

CPA Australia supports stronger action against tax practitioner misconduct

CPA Australia has shared its support for reforms aimed at strengthening accountability for tax practitioner misconduct while protecting ethical tax practitioners. The reforms strike an important balance.

CPA Australia Regulations and Standards Lead Belinda Zohrab said the proposed reforms provide the Tax Practitioners Board with stronger tools to address serious misconduct, while ensuring fairness for the vast majority of practitioners who do the right thing.

The reforms include increased civil penalties, new sanctions for unregistered tax agent service providers and tighter safeguards around the TPB's power to immediately suspend registration, limiting its use to circumstances involving a significant risk of harm to clients.

Minimum tax on discretionary trusts: consultation paper

Treasury has released the consultation paper Minimum tax on discretionary trusts. The Paper seeks feedback on the design and implementation of a new 30 per cent minimum tax on discretionary trusts, set to commence from 1 July 2028. 

Amounts already taxed in the hands of the trustee will generally not be affected by the tax. If no beneficiary is made entitled to trust income, the highest marginal rate plus the Medicare levy will continue to generally apply to the income in the hands of the trustee. 

Feedback includes the scope of the minimum tax, rollover relief, the treatment of excess franking credits, collection mechanisms, and the interaction between the minimum tax and the High Court's Bendel decision on unpaid present entitlements.

Send your comments by 24 July to [email protected]

Calls for practical reform to make start-up tax concession work 

CPA Australia says it supports Treasury's consultation on the proposed capital gains tax concession for investors in Australian start-ups, but warns the measure will fall short unless practical design issues are addressed.

In its submission to Treasury CPA Australia says the concession has the potential to encourage greater investment in innovation and productivity-enhancing businesses, but must be accessible, commercially workable and provide certainty for investors, employees and founders.

CPA Australia Tax Lead Jenny Wong said Australia continues to lag behind many of its regional peers when it comes to innovation and technology adoption among small businesses.

ATO clarifies position on vulnerability and GIC remission

Commissioner Rob Heferen has responded to practitioner concerns raised during a recent Tax Professionals live stream. Key messages include that the ATO:

• cannot change taxpayers’ tax obligations or waive debt, even for those experiencing vulnerability or hardship. ATO staff can help explore assistance options, such as payment plans
• put in a number of mechanisms to improve the consistency of remission outcomes. However, requirements for remission have not changed. The ATO encourages you to send contestable incidences where you think the decision is wrong.
    

ATO and AEC data-matching notices

The ATO has issued a notice for data matching with the Australian Electoral Commission  on an ongoing basis. The data collected will be used to:

• identify people that may be operating outside of the tax and superannuation systems
• locate taxpayers with outstanding tax and superannuation obligations
• assist with the administration of Australia's Foreign Investment Framework requirements in residential and agricultural land, where a person acquires Australian property and does not appear on the electoral roll. 

ATO website updates

• Over-claimed expenses and GST credits
• New tax on large and very large super balances
• Renewable Energy Zone (REZ) projects tax treatment.

2025-26 Cost Recovery Implementation Statement

ASIC has issued its 2025-26 Cost Recovery Implementation Statement, which outlines how ASIC will recover regulatory costs from industry under the industry funding model.

For the 2025–26 financial year, ASIC’s total estimated recoverable costs are $400.5 million—a 19 per cent increase from the previous financial year. For the personal advice subsector, the total estimated recoverable costs for the 2025-26 financial year are $48.7 million—a 22 per cent increase. The per-adviser levy is estimated to increase from $2,398 to $3,037 (27 per cent).

The increases reflect additional funding to support ASIC’s regulatory activity, supervision and enforcement outcomes.

For the auditors of disclosing entities subsector, the total estimated recoverable costs for the 2025-26 financial year are $15.9 million – a 57 per cent increase. The increase reflects ASIC’s increased regulatory activity related to auditors including supervision, surveillance and enforcement work.

Meet the Ombo in Darwin

Monday 27 July

Meet the Tax Ombudsman, Ruth Owen CBE, and hear about her important work to improve the fairness and integrity of the tax system.

Register now.

Advanced Financial Modeler Accreditation

Strengthen your financial modelling skills with this accreditation from the Financial Modeling Institute. Find out more.

Advisory Delivery Certification

Gain practical skills in advisory, communication and problem-solving to deliver greater client value, in partnership with Leaders in Business. Register now.

Business registries stabilisation and uplift

The government has registered the Treasury Laws Amendment (Business Registries Stabilisation and Uplift) Regulations 2026. The purpose of the Amending Regulations is to support various amendments made by the Treasury Laws Amendment (Business Registries Stabilisation and Uplift) Act 2026 (the Business Registries Act).

Date of effect: Schedule 1 (Director ID and address information measures) commences 1 July 2027. Schedule 2 (delegation settings) commenced 11 July 2026.

2020 BAS Services instrument repealed

Treasury has registered the Tax Agent Services (Specified BAS Services No. 1) Repeal Instrument 2026, repealing the Tax Agent Services (Specified BAS Services No. 2) Instrument 2020 which was registered 5 November 2020.

Date of effect: 7 July 2026. 

ASIC simplifies legislative instrument for IDPS platform operators

ASIC has released ASIC Corporations (Platforms -- IDPSs and IDPS-like Schemes) Instrument 2026/395, a new legislative instrument for operators of investor directed portfolio services and IDPS-like schemes.

The new instrument replaces the relief previously provided under:

• ASIC Corporations (Investor Directed Portfolio Services Provided Through a Registered Managed Investment Scheme) Instrument 2023/668
• ASIC Corporations (Investor Directed Portfolio Services) Instrument 2023/669.

Date of effect: 7 July 2026

ATO relief from the effects of failing to substantiate

The ATO released an Addendum to TR 97/24, which was a ruling on granting relief where a taxpayer fails to substantiate expenses. Where documents have been lost or destroyed due to the taxpayer experiencing vulnerability (e.g. sudden homelessness or family violence), the ATO will have regard to evidence of the taxpayer's vulnerability. 

Date of effect: retrospective. 

Practice statements updated 

• The ATO updated PS LA 2006/8 (Remission of SIC and GIC for shortfall periods). Where experiences of vulnerability (e.g. family violence, financial coercion, homelessness or serious mental health challenges) are directly attributable to delays in supplying information to the ATO, a full remission of interest charges may be granted.
• The ATO also updated PS LA 2016/3 (Cancellation of registrations in the Australian Business Register), making minor changes.

Global and domestic minimum tax lodgment obligations

The ATO updated PCG 2025/4. This guideline sets out the ATO's approach in relation to the Global and Domestic Minimum Tax lodgment obligations of MNE Groups during the transition period (covering fiscal years starting before 1 January 2027 and ending before 1 July 2028). It now includes commentary on the OECD common understanding on the central filing (at paras 27 to 30) and exchange of the GloBE Information Return.

Trust beneficiaries may still be employees

ATO has issued a DIS on SEPL Pty Ltd as trustee of the SFT Trust v FCT (2026) stating:

• It is important to correctly identify an employee, an appointor and an eligible beneficiary of the discretionary trust.
• The finding that the 3 brothers were each not an employee was based on the unique and unusual factual circumstances of the case.
• Directors of a corporate trustee of a discretionary trust may still fall within the definition of "employee" for FBT purposes, even if the common law meaning of the term is applied.
• The capacity in which persons receive benefits from the trust will need to be determined having regard to all of the facts and circumstances of a case. 
• The definition of "in respect of" in the phrase "in respect of the employment of the employee" still requires a meaningful connection which is sufficient or material, having regard to the object and structure of the FBT regime.

Directors fail to establish defence to director penalty notices for SGC

In Ostwald v FCT (2026), the Federal Court dismissed applications for judicial review of decisions that three directors of a company had not established the "all reasonable steps" defence to director penalty notices issued in respect of unpaid superannuation guarantee charge.

Firstly, the Court held that taxpayer's applications were not competent. The Court then found the ATO had not failed to take into account relevant considerations. It held that the ATO's decisions were not legally unreasonable.

New ground of objection refused in SMSF penalty proceedings

In QQCS, CZMV, JRFK, PJXX and WHVG and FCT (2026), the corporate trustee of an SMSF and its directors were not allowed to amend their grounds of objection against administrative penalties to include a new argument concerning agency and responsibility for statements in SMSF returns. 

Firstly, the ART determined that the proposed argument concerning agency was genuinely new rather than a reformulation of an existing ground. The ART then concluded that the applicants should not be granted leave to amend their grounds of objection due to delay, legislative purpose and procedural efficiency, merits of the new ground and interests of justice.

2025-26 vehicle kilometre rate guidance

IR sets kilometre rates based on vehicle costs in the previous income year. Employers may use these rates to provide reasonable estimations of how much they’ll need to reimburse employees for the business use of their private vehicle. 

Due to changes in fuel prices this year, IR is considering providing you with more guidance for employers' reimbursements for the 2027 income year. 

For now, you can still use the 2025-26 kilometre rates or another method that provides a reasonable estimate of your employee’s costs. 

Read more about km rates OS 19/04, OS 19/04A and OS 19/04B.

Free food safety basics for food businesses

The government launched a free online food safety course in May and its second module is now available. It covers why personal hygiene is essential for anyone working with food and how everyday habits can protect customers from foodborne illnesses. New modules will be published regularly.

Government support for flood-hit Kaikoura farmers

The government is providing $50,000 to the Farmers Adverse Events Trust to support flood-affected Kaikoura farmers, with Federated Farmers to match the funding through fundraising. After receiving double its average rainfall in just two days, Kaikoura suffers from damages to farms, livestock feed and vital infrastructure such as roads and fences.

Farmers and growers elsewhere, including in Otago and the Wairarapa, are still feeling the effects of recent severe weather. The government continues to assess whether further support is needed.

Farmers should stay across MetService forecasts and take precautions, including moving livestock to safe ground. Farmers and growers needing assistance can contact the Rural Support Trust on 0800 787 254. Those with animal welfare concerns can phone MPI on 0800 00 83 33.Strategic diesel reserve ready for use 

IR website updates

• Registering new business tax accounts in myIR

Operational resilience thematic: findings and insights

The FMA conducted a series of surveys as part of its thematic review of operational resilience supporting its regulatory priority of identifying emerging risk and opportunities, as set out in the 2025 Financial Conduct Report.

The purpose of these surveys is to promote market integrity and support continuous improvement in a constructive and collaborative way.

Auckland builder sentenced on tax charges

An Auckland builder who persistently refuses to pay tax was sentenced to six months community detention when he appeared in court on 3 July. He faced two representative charges of not providing information to IR with the intention of evading the assessment or payment of income tax and GST.

He was sentenced to six months community detention and ordered to pay $22,549.50 in reparation. Previously, he had been sentenced and convicted in 2019 in relation to 34 changes of failing to provide information in relation to income tax and GST over a five year period. The total tax evaded was $40,618.60-$26,027.10 in income tax and $14,591.50 in GST.  

High court dismisses judicial review

In Jia v Commissioner of Inland Revenue (2026), the taxpayer applied to judicially review the decision of the commissioner declining to consider his application under s 113 to amend his tax assessments for the 2014, 2015, and 2016 tax years. The taxpayer did this despite the TRA having found the assessments to be correct in unsuccessful challenge proceedings brought by him under Part 8A of the TAA. The Court found issue estoppel applies. 

The decision of the TRA is a final decision of a court of competent jurisdiction as to the correctness of the commissioner’s assessments. The TRA determined that the assessments are correct. Therefore, it is not open to the taxpayer to argue in this (or any other) proceeding with the commissioner that the assessments are not correct. Read more.

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