CPA Australia Tax News

This edition of Tax News was current at the time of publication on June 4. You can subscribe to the Tax News email in your comms preference centre. 

Feature:

ATO’s tax time focus areas for 2026

ATO assistant commissioner Anita Challen unpacks the ATO’s major focus areas this tax season. 

Watch video podcast.

 

Tax reform conversation has a long way to go

CPA Australia has warned the government’s tax reform legislation risks creating a more complex and uncertain system, after the Treasury Laws Amendment Bill 2026 was introduced into Parliament last week.

CPA Australia Tax Lead Jenny Wong said the most structurally significant measure for private business and family wealth had been deferred.

“This Bill is consistent with the CGT and negative gearing changes announced in the Budget, however the proposed minimum tax on discretionary trusts – arguably the most consequential reform for private business owners – has been split into a separate Bill, leaving a major gap in the system,” Ms Wong said.

Read more in our media release.

 

Tax Reform Bills: Senate inquiry

The Treasury Laws Amendment (Tax Reform No 1) Bill 2026 ("the Bill"), Income Tax Rates Amendment (Tax Reform No 1) Bill 2026 have been referred to the Senate Economics Legislation Committee for inquiry.

The Bill contains four schedules of the 2026-27 Budget tax reforms: 

• replacing the 50% capital gains tax (CGT) discount with a new discount based on inflation for gains accruing from 1 July 2027
• limiting negative gearing for residential property to new builds from the 2027-28 income year
• delivering a new Working Australians Tax Offset (WATO) to provide a permanent annual tax offset of up to $250 to eligible working Australian taxpayers
• introducing a minimum tax rate of 30% on real capital gains accruing from 1 July 2027 and rate mechanism

Since the Budget, CPA Australia has participated in a roundtable with the Assistant Treasurer, maintained regular contact with senior advisers to the Treasurer and Assistant Treasurer, and collaborated with business groups including ACCI and COSBOA. We also delivered a follow-up webinar for members on the major Budget changes. 

Send your comments by Friday 5 June to [email protected]  

 

Tax Time toolkit for small business 

The ATO has launched its 2026 Tax Time toolkit for small businesses, providing agents with practical guidance to help them prepare and lodge their small business client’s obligations.  

 

Tax Time webinar 

Join the ATO for their Tax Time live stream on Wednesday 10 June 2026, 2:00–3:00 pm AEST, to hear directly from: ATO Commissioner Rob Heferen, TPB Chair Peter de Cure and ATO Tax Time spokesperson Anita Challen. Add to your calendar  

 

Applying debts on hold to accounts with payment plans 

The ATO has advised that if a client’s debt on hold is added to their account balance while they already have an active payment plan for another debt, they will have six months before action may be required. During this period, the client must either:

• pay the debt on hold in full, or 
• establish a new payment plan to cover the debt on hold amount.

If a client has both a debt on hold and an existing payment plan, a notification will appear in Online services.

Agents can assist clients in setting up a new payment plan by contacting the ATO on 1800 305 499. For more information, visit ato.gov.au/debtsonhold

 

 

ATO website updates

• Business record-keeping rules 
• Landcare operations
• Instant asset write-off 
• Fund Validation Service user guide 
• Payday Super resources 

 

 

PROFESSIONAL DEVELOPMENT

Preparing for Payday Super with ACCI

25 June | 2 CPD hours 

Strengthen your productivity by applying structured approaches to identifying inefficiencies and improvement opportunities.

REGISTER NOW.

Productivity and Efficiency in Finance  

16 June

With Payday Super set to commence from 1 July 2026, the Australian Chamber of Commerce and Industry (ACCI) is hosting a webinar to help employers prepare. The session will cover key obligations, including aligning contribution payments with pay cycles, the seven-day processing requirement, and broader compliance considerations. It will also explore practical implementation steps and cashflow impacts for businesses. 

REGISTER NOW.

 

LEGISLATION

Deduction rate for car expenses 

The ATO has issued the Draft Income Tax Assessment (Cents per Kilometre Deduction Rate for Car Expenses) Determination 2026. For work-related car expense deductions, the Instrument sets the rate at 91 cents per kilometre for the 2026-27 income year.

The 91 cents per kilometre is a temporary one-off uplift of 2 cents per km on top of the base cents per kilometre rate of 89 cents, For future income years, the calculated annual indexation rate will be applied to the 2026-27 base cents per kilometre rate of 89 cents.

Date of effect: The Instrument commences on 1 July 2026.

 

RULINGS AND GUIDANCE

Payday Super: exceptional circumstances   

Draft Practice Statement PS LA 2026/D3, provides guidance to ATO staff on exercising the Commissioner's power to make an exceptional circumstances determination under the Payday Super reforms.

Such a determination may be made in response to a natural disaster or widespread technology outage and would give affected employers additional time to make eligible contributions. If an employee is paid qualifying earnings for a QE day during the period specified in the determination, they will have 20 business days to make an eligible contribution.

Proposed date of effect: 1 July 2026.

Send your comments by 19 June to: [email protected]

Geocon Land Holdings No. 5 Pty Ltd v FCT   

The ATO has issued a Decision Impact Statement (DIS) outlining its response to the Full Federal Court's decision in Geocon Land Holdings No. 5 Pty Ltd v FCT (2025). In that case, the Full Court held that due to insufficient or incomplete facts, it was unable to conclude whether an amount of excess goods and services tax (GST) had been "passed on" for the purposes of s 142-10 of the GST Act and remitted the matter to the ART for redetermination.

The ATO considers that whether excess GST has been passed on is a question of fact to be determined on a case-by-case basis. Taxpayers who have a decision from the ATO that they have passed on excess GST may consider that the decision is incorrect. Those taxpayers may have rights of objection under Pt IVC of the TAA.

FCT v Baya Casal

The ATO has issued a Decision Impact Statement (DIS) outlining its response to the Full Federal Court's decision in FCT v Baya Casal (2026).The Full Court dismissed the ATO's appeal against a decision that the taxpayer's position was genuinely redundant when her workplace was restructured and, therefore, a payment she received was a genuine redundancy payment within the meaning of s 83-175 of the ITAA 1997.

The ATO accepts that a material reduction in hours (and, as a consequence, remuneration) for an hourly paid employee can be a relevant factor in determining whether an employee's position is genuinely redundant. Ultimately, however, it is a question of fact and degree. 

The ATO is reviewing TR 2009/2 (Income tax: genuine redundancy payments).  

 

 

CASES 

Update on FCT v Toowoomba Regional Council (2026) 

The taxpayer has lodged a notice of appeal to the High Court against the decision in FCT v Toowoomba Regional Council (2026). The Full Federal Court held that a shopping centre car park was a "commercial parking station" for FBT purposes.

Australian resident status denied to long-term overseas resident 

In Ward and FCT (2026) the ART agreed with the ATO that the taxpayer was not a tax resident of Australia, finding that she had established a permanent place of abode outside Australia, firstly in the US and then in the Netherlands. The ART gave considerable weight to the length of time the taxpayer had spent living overseas — in excess of 17 years at the time of the decision and almost 14 years at the time of the relevant CGT event_ and that her return visits to Australia were infrequent and short. Another relevant factor was that the nature of the taxpayer's overseas living arrangements was settled and permanent rather than temporary or current transitory.

 

 

NEW ZEALAND TAX NEWS

Crime By Numbers: Inside the money laundering economy

In this series of Crime by Numbers, delve into the murky depths of the world’s laundromat.
 
Episode one explores why money laundering is so harmful and what we can do to clean it up. In episode two, we delve into how criminal moneys moves through today's financial systems.

Inside the money laundering economy

How criminals launder money through today’s networks

Budget 2026 tax changes

The government has issued a media release highlighting the tax changes: 

• R&D Tax Incentive: 

(i) Businesses will receive in-year credit payments
(ii) The cap on non-administrative internal software R&D claims is cut to $3m
(iii) Increased flexibility of RDTI return deadlines
(iv) Mining businesses getting broader R&D claim eligibility

 

IR consultation on current GST issues

IR identifies current GST issues and seeks feedback on potential changes. The Paper covers:

• Dwellings & commercial dwellings
• Solar electricity exports
• Cross-border issues
• Correcting GST errors
• Miscellaneous technical fixes
• Modernising the GST Act
• Business event services supplied to non-resident businesses
• Other international developments

Send your comments by 19 June to: [email protected] 

 

First shipment of extra diesel reserve bound for NZ

The first of two shipments of New Zealand’s diesel reserve is now on its way to New Zealand. The fuel was loaded on 31 May and is now en route to Marsden Point in Northland,where it is expected to arrive mid-June. The second shipment is expected to arrive in early July.

Channel Infrastructure is continuing work to refurbish two former crude oil tanks at Marsden Point to create around 93 million litres of capacity for the diesel. The tanks will be ready to receive the fuel when the first shipment arrives. 

Together, the two shipments represent around nine days of typical diesel consumption for the country. The additional supply will not count towards the fuel companies’ minimum stockholding obligations and will be controlled by the government.

IR website updates 

• Fees Free will finish at the end of 2026  
• Budget 2026 announced

 

PROFESSIONAL DEVELOPMENT

25 June | 2 CPD hours 

Strengthen your productivity by applying structured approaches to identifying inefficiencies and improvement opportunities.

Register now.

  

 

RULINGS AND GUIDANCE

PIE income from land development activities  

IR explains in QB 26/03  whether income derived from developing land, dividing it into lots and/or erecting buildings on the land for the purpose of sale is eligible income for a portfolio investment entity under s HM 12 of the ITA 2007. It concludes that this type of income counts as eligible portfolio investment entity income under s HM 12, because it qualifies as an amount derived from the disposal of property.

GST on low value pre-registration goods and services 

The Commissioner's statement CS 26/02: GST treatment of low value pre-registration acquired goods and services sets out the Commissioner's position and operational approach on the treatment of goods and services valued at $10,000 or less (excluding GST) that were acquired before GST registration and are used to make taxable supplies, on or following GST registration.   

 

Off-market share cancellation ruling 

IR issued technical decision summary, TDS 26/05: Off-market share cancellation, which considered: 

• whether the shares in an incorporated company (the Applicant) are all "shares of the same class" for the purposes of s CD 23 of the ITA 2007
• whether the Applicant's available subscribed capital under s CD 43, for the purposes of s CD 23, was at least enough to cover the amount to be paid to shareholders because of the proposed share cancellation
• for the purposes of s CD 22(3)(a), whether the proposed off-market share cancellation is a pro rata cancellation that results in a 15% reduction for the Applicant
• whether the amount the Applicant pays to a shareholder because of the proposed off-market share cancellation is "in lieu of the payment of a dividend" for the purposes of s CD 22(6)