CPA Australia Tax News

This edition of Tax News was current at the time of publication on 18 June 2026. You can subscribe to the Tax News email in your comms preference centre. 

CPA Australia at the Senate: What happened in the hearing room

CPA Australia appeared before the Senate Economics Legislation Committee on Tuesday, giving evidence on the Treasury Laws Amendment (Tax Reform No. 1) Bill 2026.

Together with CEO Chris Freeland AM and Chief of Policy Elinor Kasapidis, we went in with a clear message: our focus is not on whether this reform should occur, but on whether this measure, as currently designed, will operate effectively in practice.

In our submission, we identified three categories of unresolved design issues: key legislative instruments that determine who is taxed, at what rate, and on which assets have not yet been written; significant gaps in how the new rules interact with existing law — including deceased estates, CGT rollovers and private company sales; and a compliance burden on taxpayers and their advisers that is substantial.

The compliance cost debate

Much of the hearing focused on our compliance cost estimates — and for good reason.

Treasury's regulatory impact assessment puts the cost of the CGT and negative gearing changes at $88.4 million. Our analysis, set out in Appendix F of our submission, tells a very different story.

Treasury's figure appears to miss three structural costs baked into the design of the legislation itself. First, every disposal of a pre-2027 asset requires a two-regime CGT calculation, applying different rules to pre- and post-2027 components — adding an estimated 45 to 90 minutes of professional time per event across approximately 800,000 annual disposals.

Second, a five-step minimum tax calculation must be performed on every CGT return under the new regime, including returns where the top-up is nil. Third, every CGT asset held on 30 June 2027 requires a market value — and for unlisted assets like residential investment properties, private company shares, business goodwill and collectibles, that means a formal valuation. Treasury has not disclosed this cost at all.

CPA Australia estimates ongoing annual compliance costs at $295 to $542 million per year, and a one-off transitional cost of $675 to $825 million — figures that received significant media attention during and after the hearing. Treasury confirmed the department had consulted with the ATO on its modelling but attributed the disparity to "differences in the model." 

Errors in the explanatory memorandum

Also picked up by the media: CPA Australia identified six errors in Treasury's own worked examples in the explanatory memorandum. A Treasury official acknowledged these on the record, telling the Committee: "We will look to review that, and there will be an opportunity to correct those errors." That these errors existed at all — in a document designed to explain how the law works in practice — speaks to the pace at which this legislation has been developed.

Design concerns that didn't make the questions — but matter just as much

There were substantive concerns in our submission that the Committee didn't get to, and they deserve to be on the record.

On the 30% minimum tax, we raised serious questions about how it will treat genuine low-income earners and taxpayers who realise capital gains involuntarily — through deceased estate distributions, compulsory acquisition, or insolvency. These are not the populations the policy is designed to target, yet the minimum tax makes no distinction. 

We also noted that when Australia last used CPI indexation between 1985 and 1999, it came with an income averaging mechanism — spreading the tax on multi-year gains across the accumulation period rather than bunching the entire gain into one income year. The current Bill has no equivalent. We asked Treasury to model and publish the distributional impact of the minimum tax provisions before the Bill passes. Without that analysis, Parliament is voting on a redistributive mechanism without knowing its distributional consequences.

Our submission is available on our website, including the full compliance cost analysis in Appendix F.

I welcome your thoughts. Email me.

Jenny Wong
Tax Lead
CPA Australia

ATO response to FCT v Bendel

The ATO advised that it’s considering the implications of the High Court's decision in FCT v Bendel (2026) HCA 18 and will update the views set out in its Interim Decision Impact Statement to provide practical guidance.

In its Interim DIS , the ATO flagged the potential application of s 100A of the ITAA 1936 (trust reimbursement agreements) where the trustee "retains funds that a corporate beneficiary has been made entitled to without converting that entitlement to a loan at least as commercial as the terms set out in Div 7A". 

The ATO reminded the application of s 100A and Subdiv EA "does not depend on the outcome of the High Court appeal process in Bendel". Under the terms of the trust, the amounts set aside were required to be held on separate trusts.

Increased AML/CTF certainty 

Updated AUSTRAC guidance provides more AML/CTF certainty for the BAS/bookkeeper community. According to the additional guidance, bookkeeping services where the service provider does not have substantive discretion over the disposition of the funds, are unlikely to be a designated service.

PSI priority education requirements

We made a submission to ATO’s consultation paper: PSI Priority Education and Guidance Requirements. 

Recent ATO communications do not provide sufficient practical certainty for tax practitioners dealing with real world client structures, corrective action and income alienation risks. 

Practitioners need clear guidance on what constitutes a genuine attempt and workable benchmarks for commercial remuneration and profit retention. Practical examples would help establish ATO’s expectations for the transition to lower-risk arrangements before 30 June 2027.

ATO website updates

• Car thresholds from 1 July 2026 
• Information session on Pillar Two
• Tax treaty residency claims
• Private capital program
• First Pillar Two lodgments due 30 dates
• 2026 Tax time changes to non-individual form

AFCA authorised as EDR scheme for scams

The Australian Financial Complaints Authority and the government have confirmed that AFCA will act as the single, centralised External Dispute Resolution scheme for scam complaints under the Scams Prevention Framework. The authorisation expands AFCA's jurisdiction to consider the role of banks, telcos and digital platforms in scam complaints, providing consumers with a one-stop-shop where matters cannot be resolved through Internal Dispute Resolution.

Designated organisations will be required to become AFCA members by 1 September 2026, and AFCA will start handling scam complaints from 31 March 2027.

SMSF LRBA safe harbour rates 2026-27

SMSF related-party limited recourse borrowing arrangement (LRBA) "safe harbour" interest rates for acquisition are expected to be:

• 9.35% for real property (previously 8.95% in 2025-26)
• 11.95% for listed securities (previously 10.95% in 2025-26).

When an SMSF acquires an asset under a LRBA, the non-arm's length income (NALI) provisions (45% tax) may apply to ordinary or statutory income generated from the asset if the terms of the LRBA are not consistent with an arm's length dealing. If an LRBA is structured in accordance with PCG 2016/5, the ATO will accept that the LRBA is consistent with an arm's length dealing.

ATO and Services Australia data-matching notices

The ATO has registered the following notices for data-matching programs:

• Medicare entitlement statement
• Paid parental leave superannuation contribution

Ancillary funds provision of benefits

TD 2026/3 sets out the ATO's views on when a private or public ancillary fund provides a "benefit" under the relevant guidelines. The Taxation Administration (Private Ancillary Fund) Guidelines 2019 and the Taxation Administration (Public Ancillary Fund) Guidelines 2022 require ancillary funds to make annual distributions to deductible gift recipients that meet or exceed a prescribed minimum amount. The ATO says that the undefined term "benefit" is not limited to paying money or transferring property but may encompass anything that puts the entity in a “more favourable position". 

Date of effect: retrospective.

Cross-border supplies to Australian consumers

Draft GST Ruling GSTR 2026/D1 helps overseas suppliers of things other than goods or real property (such as digital products) decide whether their recipient is an Australian consumer and how the "safeguard approach" under s 84-100 of the GST Act affects this task.

Appendix 1 sets out various compliance approaches that overseas suppliers may follow in determining whether the recipient is not an Australian consumer. The ATO's existing approach to residency remains unchanged.

Proposed date of effect: retrospective.

Send comments by 6 July to: [email protected]

Property sale not business of property development

The ATO issued a DIS on earlier this month outlining its response to the Full Federal Court's decision in FCT v Morton (2026) FCAFC 31. In that case, the Full Court upheld a decision that no part of the proceeds from the sale of subdivided land was assessable income.

In the ATO's view, the decision does not change the relevant legal principles concerning whether a taxpayer is carrying on a business and undertaking a profit-making undertaking or plan. ATO's long-standing approach to property development issues is articulated in TR 97/11 and TR 92/3.

Executive deemed a tax resident of Singapore

In Bulie and FCT (2026), a taxpayer was taken to be a tax resident of Singapore and not Australia under a DTA despite having strong personal ties to Australia. The ownership of a home in Sydney home and Australian superannuation accounts did not alter the analysis that the taxpayer's earned employment income in Singapore was his strongest and most important economic relation.

BAS agent experience insufficient for tax agent registration

In Albadeen and TPB (2026), the ART affirmed the TPB's decision denying the applicant for registration as a tax agent. found that there was insufficient evidence to establish the nature, character and extent of the applicant’s work as a BAS agent. The SRE did not identify the tasks performed, the extent to which the applicant exercised professional judgement, whether he ascertained liabilities or obligations under a taxation law, or whether he provided advice on which clients could reasonably be expected to rely.

Tax Information Bulletin 

IR’s June 2026 Tax Information Bulletin contains information about the latest changes to tax-related legislation, proposed legislation, judgments, rulings and other specialist tax topics including many of the publication-types.

Proposed legislative changes to tax intermediaries

We support IR's review of the regulatory framework for tax intermediaries. An appropriate balance needs to be struck between the regulation necessary to uphold the integrity of the tax system and unnecessary barriers to intermediaries performing their role. Read our submission. 

Square metre rate for home office calculations

IR has set the square metre rate for home office calculations at $57.30 for the 2026 income year. Guidance on home office expenses can be found here.

Changes to submitting taxpayer ruling applications 

In order to align with existing IR processes, IR will make the following changes to how customers submit taxpayer ruling applications:

• From September 2026, all individuals, organisations and tax agents will need to submit applications through myIR
• myIR must be used to request any pre-lodgement meetings 
• The current paper forms, with some exceptions, will be retired once the myIR process is in place.

There are no changes to the information required to make an application or the taxpayer ruling process itself. Read more here.

AI support for small businesses

New government funding aims to support New Zealand's small businesses by backing two initiatives to put AI-powered tools into the hands of the country's 600,000 small businesses.

The government is funding Business South to expand AcceleratorNZ, a programme that uses AI to provide business owners with growth action plans, and Business Mentors New Zealand, which will develop an AI tool to help better match mentors with businesses.

Ensuring fair consumer outcomes from insurer benefits 

FMA’s newly released insights looks at how insurers manage customers’ interests during periods of short-term sales campaigns and incentives. The report outlines observations of current industry practices, reinforces expectations under the Conduct of Financial Institutions (CoFI) regime and identifies the need to improve: 

• stakeholder involvement when designing incentives to better identify risks early and consider how these align with the fair conduct principle  
• governance, record-keeping and approval processes  
• monitoring of how incentives influence behaviour and consumer outcomes  
• use of proactive, outcomes-focused reviews rather than relying solely on reactive controls, such as complaints or reactive feedback.

Third reading of Credit Contracts and Consumer Finance Amendment Bill

The Credit Contracts and Consumer Finance Amendment Bill has passed its third reading. The Bill will now go to the Governor General for royal assent. Regulatory responsibility for the Credit Contracts and Consumer Finance Act 2003 (CCCFA) will transfer from the Commerce Commission to the FMA on 1 July 2026. 

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