CPA Australia Tax News

This edition of Tax News was current at the time of publication on 20 August 2026. You can subscribe to the Tax News email in your comms preference centre. 

Tax Ombudsman: OSFA review report released

The Tax Ombudsman, Ruth Owen has released her report on the review of Online Services for Agents (OSfA) and Practice Mail today, the day of CPA Australia’s Tax Forum.  Her three recommendations reflect long-standing practitioner concerns.

Practical Improvements (Rec 1): Essential for reducing practice overhead.

We strongly support eliminating communication “black holes” by ensuring agents can see client notices, expanding BAS agent access to SGC data, digitising FBT and franking credit lodgements, enabling digital initiation of high-threshold payment plans, and automating TFN redaction.

Strategic Prioritisation (Rec 2): A long-overdue focus.

We agree that agent needs have historically been underweighted compared to consumer portals such as myGov and support a transparent framework that clearly shows how OSfA feature requests are assessed and progressed.

Digital Interaction (Rec 3): Crucial for modernising workflows.

We support the introduction of a secure, ticketed two-way messaging platform, together with practical improvements to Practice Mail to reduce reliance on postal mail and other communication channels.

ATO interest income 

Prefill data for ATO interest has not yet been available this tax time. Due to challenges in ATO systems and changes in the legislation, the ATO cannot currently use calculations from previous years. If you're preparing and lodging your tax return now, you can manually calculate ATO interest.

The ATO is working toward a fix and will send out updates if there are further delays.

2026 Budget measures: CGT, Negative Gearing and Trusts

The ATO will hold an optional out-of-session meeting for TPSG and TPDIG members, including CPA Australia, to discuss the recent 2026 Budget measures.

The session will seek member feedback on early ATO implementation approaches and any support materials required to help tax practitioners and digital service providers navigate these changes. Email and let us know what you need from the ATO.

Send your comments by 25 August to: [email protected]

Thin cap statutory review consultation session

Following our thin cap submission, the Board of Taxation will hold a consultation session with ‘Peak Bodies’, including CPA Australia. The session will focus on how the new rules are operating in practice, including verifiable impacts on commercial and financing decisions, investment outcomes and compliance costs. 

Topics are expected to include:

• The key practical and commercial impacts of the reforms
• Concerns regarding compliance costs, uncertainty and administration
• Potential solutions that address stakeholder concerns while maintaining the integrity objectives of the regime

Send your comments by 25 August to: [email protected]

More convictions under Operation Protego

The ATO reported that Operation Protego has seen convictions of four more individuals with jail time in July and August for fraudulently obtaining over half a million in illegitimate claims. The individuals registered for ABNs, created fake businesses to submit business activity statements and used these claims to obtain refunds from the ATO.

ATO website updates

• CBC reporting exemptions and administrative relief
• Missed June quarterly SG filing date 
• Division 293 tax threshold and end of year interest rate
• Access to client digital communication
• Average dividend and franking credit yields
• Monthly exchange rates for 1 July 2026 to 30 June 2027

ASIC consults on remake of qualified accountant instrument

ASIC has released CS 58 Proposed remake of qualified accountant legislative instrument, seeking feedback on its proposal to remake ASIC Corporations (Qualified Accountant) Instrument 2016/786, which is due to expire on 1 October 2026. 

The instrument identifies which professional bodies have members that can be recognised as "qualified accountants" under the Corporations Act 2001. 

Professional standards schemes for accountants and lawyers

The Treasury Laws Amendment (Professional Standards Schemes) Regulations 2026 were registered on 10 August 2026. The regulations update the list of prescribed professional schemes that have capped civil liability for misleading and deceptive conduct under the ASIC Act 2001, the Competition and Consumer Act 2010, and the Corporations Act 2001.

Negative gearing and CGT changes

A private members' bill seeks to implement changes for individuals whose assets have grandfathered access to the negative gearing or the 50 per cent CGT discount, but would otherwise lose access should the ownership change hands due to divorce proceedings, relationship breakdown or death of a joint owner. 

The Treasury Laws Amendment (Removing the Widows and Spouses Tax) Bill 2026 was introduced into the Senate on 13 August 2026 and has 2 sponsors, i.e. Senator Canavan (Nationals) and Senator Pocock (Independent).

Super guarantee for part-time employees aged under 18

 Greens Senator Barbara Pocock introduced the Superannuation Legislation Amendment (Fair Super for Young Workers) Bill 2026 into the Senate on 12 August 2026. It intended to remove the restriction which excludes persons aged under 18 who work part time from receiving superannuation.

The Bill proposes to repeal reg 11(f) of the SGAR and insert s 10A(3) into the SGAA 1992 to ensure that all employees aged under 18 cannot be exempted from the super guarantee, regardless of how many hours they work.

Practice statements updated

PS LA 2011/21 (Offsetting of refunds and credits against taxation and other debts) was updated to include commentary on small business restructuring plans. 

The ATO says that until a company is released from its admissible debts and claims, any excess credits can be applied to reduce any liability (first to any post-administration debts and then to pre-administration debts). 

However, a credit relating to a pre-restructuring period will be offset against pre-restructuring debts regardless of whether the company has been released from those debts.

The following practice statements were also updated:

• PS LA 2016/6 (Exchange of information with foreign revenue authorities about indirect taxes); and
• PS LA 2022/1 (Administrative penalties for electronic sales suppression tools).

Derivation of childcare fees set aside and remitted to the ART

In Hasan v FCT (2026), the Federal Court has set aside an ART decision (BHMH and FCT (2025) ARTA 996) that all fees received by a family day care business (operated via a trust) were assessable to the trust. 

The Court found that the Tribunal erred in law by misconstruing the A New Tax System (Family Assistance) Act 1999 and had mischaracterised s 43 of the Act as in force during the relevant income years, as "creating" or "imposing" a liability on the parents to pay the total fees charged. 

The matter was remitted to the ART for determination according to law.

Jurisdiction to review GST assessments in suspected identity theft

In FCT and KYWNY, the ART confirmed that it has jurisdiction to determine an application for review of GST assessments in identity theft cases involving fraudulent payment of GST refunds to unrelated third parties, even if the theft is not yet proven. 

The taxpayer alleged that BASs generating GST refunds were lodged without his authority, due to identity theft. The ART pointed out that it was not necessary for the taxpayer to prove, at the jurisdictional stage, that the BASs were actually lodged without authority - the substantive facts would be determined at the hearing. 

Taxpayer's application for summary judgment dismissed

In Laureti v FCT, the Federal Court dismissed a taxpayer's application for summary judgment against the ATO. The taxpayer had been issued administrative penalties for alleged intentional disregard of a taxation law. The Court rejected the taxpayer’s arguments that: 

• there was no "shortfall amount" because the default assessments were made by the ATO by the formation of a judgment
• no statement in the tax returns was false or misleading in a material particular
• a default assessment made under s 167 after the taxpayer has lodged their tax return cannot retrospectively render statements in the tax return "false or misleading" for the purposes of the penalty provisions
• the taxpayer could not be assessed for an administrative penalty as an intentional disregard of a taxation law may also give rise to a criminal offence.

When land disposal will be a profit-making undertaking or scheme under s CB 3

We made a submission to IR’s Interpretation Statement PUB00519. While the draft provides useful conceptual guidance, we are concerned that applying section CB 3 as a residual taxing provision may undermine the certainty intended by the specific land-taxing rules and their statutory exclusions. 

In particular, greater clarity is needed on the boundary between mere realisation and a profit-making undertaking or scheme, the interaction with the bright-line test, and the evidentiary requirements for identifying when a scheme commences. 

We recommend that the finalised interpretation statement includes clear realistic examples, recognise a strong presumption against applying section CB 3 where a specific statutory exclusion is satisfied, and provide practical guidance to ensure IR does not apply section CB 3 as a default alternative where the specific land provisions do not apply.

Know your obligations and keep your customers safe

The Commerce Commission has released updated product safety videos to help businesses understand their obligations. 

They provide an inside look at what Commission investigators look for when assessing potentially non-compliant products, covering children's toys, children's nightwear, hot water bottles and high-strength magnets. The Commission encourage businesses to use the videos to strengthen compliance and to train staff.

How satellite data improves business decisions

What if some of your organisation's most valuable business intelligence came from space?

This podcast episode explores how satellite data is helping organisations improve decision-making, reduce risk and uncover new opportunities. Listen now.

Red tape tipline fixing ‘offensive trades’ problems

Following a submission to the Ministry of Regulation’s Red Tape Tipline, the government will remove the registration requirement for businesses conducting ‘offensive trades’ such as fish curing, leather tanning and nightsoil collection, listed by the 1956 Health Act.

These businesses will no longer have to complete registration paperwork or pay registration fees, and councils won’t have to administer the regime. 

The change is expected to deliver up to $2.26 million in savings for businesses, over 10 years. 

AI use at Business Mentors NZ

Business Mentors New Zealand continues to explore AI integration to better support small businesses. Recently, they developed an AI tool to create summaries and highlight next steps during mentoring sessions for business owners. 

To win a year of mentoring support, register by 2 September.

FMA seeks feedback on AI in financial advice

The FMA is undertaking a thematic review and seeks feedback on AI in financial advice in New Zealand understand how AI is being adopted and used in practice, the benefits and risks being observed, and any legal, operational or regulatory questions arising within the sector.

Income tax consequences of company amalgamation 

TDS 26/11 summarises a private ruling that considered the income tax consequences of a company amalgamation. 

The main issues were whether: 

• any net income or net loss will arise from the deemed disposal of shares in any amalgamating company. A: S FO 6 applies, no net income or net loss arises
• any income will arise in connection with an amalgamating company’s deemed disposal of the Shares. A: S FO 10 applies, no income arises
• the disposal of the amortising property gives rise to depreciation recovery income or depreciation loss for the amalgamating company making the disposal. A: No
• s HG 4 applied because the co-owners were in a partnership. A: No 
• any income or expenditure will arise for the amalgamating companies in connection with the loans from the parent company. A: No
• the loan between the amalgamated company and the amalgamating company will be treated as having been repaid. A: Yes
• whether s BG 1 applies to the Arrangement. A: No.

GST consequences of company amalgamation

TDS 26/10 summarises a private ruling that considered the GST consequences of a company amalgamation. 

The main issues were whether: 

• the amalgamating companies are eligible to be a GST group with Company A as the representative member. A: Yes
• the goods and services deemed to be supplied by the unincorporated body immediately before it ceases to be registered will be treated as being supplied to the member companies, and that supply is deemed to be supplied to Company A as the representative member of the GST group and zero-rated. A: Yes 
• any GST liability will arise as a result of any supplies made by the amalgamating companies to the amalgamated company. A: No 
• s 76 applies to the Arrangement. A: No.

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