In this edition of Andersen in Australia’s Monthly Tax Update, we provide recent legislative updates and outline the latest developments in the areas of corporate tax, individual tax, indirect tax and international tax. We also examine the ATO’s recent activities, publications, rulings and other guidelines and discuss the latest Australian tax cases.

Key Sections

Legislation Updates

Payday Super Bills Introduced Into Parliament

The Federal Government has now introduced two bills, the Superannuation Guarantee Charge Amendment Bill 2025 and the Treasury Laws Amendment (Payday Superannuation) Bill 2025 into Parliament. The Bills propose to reform the superannuation guarantee framework and introduce ‘Payday Superannuation’ for employers.

These proposed Bills also introduce new administrative penalties for employers who fail to pay their superannuation guarantee (SG) on time. Instead of the current fixed administrative component, a new scalable administrative uplift will apply. Furthermore, the general interest charge will now be calculated on the total SG charge, not just on the individual SG shortfall amounts.

A choice loading will be imposed if an employer makes contributions to a complying superannuation fund without meeting the choice of superannuation fund requirements. This choice loading is to be treated as a distinct part of the superannuation guarantee (SG) shortfall.

The Bills give full effect to the ‘Securing Australians’ Superannuation Package’ measure—aimed at increasing the frequency of Superannuation Guarantee payments and strengthening SG compliance—as announced in the 2023–24 Federal Budget.

The bills will commence on 1 July 2026 and apply to SG contributions in respect of qualifying earnings days on or after 1 July 2026.

Other Legislation Update

Income Tax Regulations for ITAA 1936 Remade

The Income Tax Assessment (1936 Act) Regulations 2025 replace the Income Tax Assessment (1936 Act) Regulation 2015 (the 2015 Regulations) ahead of their scheduled “sunset” on 1 October 2025. The updated regulations streamline and modernise existing provisions by removing outdated content, simplifying language, and ensuring continued alignment with current tax policy. They cover areas such as deductions, rebates for low-income pensioners, Defence Force income treatment, amendment timeframes, and foreign income rules.

To support these changes, the government also introduced Treasury Laws Amendment (Income Tax Assessment Repeal and Consequential Amendments) Regulations 2025 (the Supporting Regulations) that repeal the 2015 Regulations and update references in other laws. Both sets of regulations commenced on 1 October 2025, following public and targeted consultation, including input from the ATO.

Simplified Accounting Method Available to Eligible Food Retailers for Calculation of Net GST Amount

Eligible food retailers, typically being smaller supermarkets and convenience stores, can continue using a Simplified Accounting Method (SAM) for calculating their GST net amount, under the A New Tax System (Goods and Services Tax) (Simplified Accounting Methods – Supermarket and Convenience Stores) Determination 2025  (the Determination), which takes effect from 9 September 2025.

This new Determination replaces the 2015 version, which was due to sunset on 1 October 2025, and maintains the same substantive provisions to reduce compliance costs.

Key Eligibility Criteria Include:

• The business mainly sells a range of food and other goods typical of supermarkets or convenience stores.
  
• Businesses primarily selling fuel (e.g., petrol stations) are excluded.
  
• Less than 5% of total sales can be from taxable goods containing GST-free ingredients.
  
• The business’s GST turnover must not exceed $2 million.
  
• Adequate point-of-sale (POS) equipment is required to track:
  
  – GST-free vs. taxable sales,Total consideration for GST-free sales, and
  
  – Total consideration for GST-free sales, and
  
  – Total consideration for all goods sold in a given period.

GST Attribution Rules Altered for Supplies and Acquisitions Relating to Collecting Societies

The GST attribution rules are being updated for certain supplies and acquisitions involving collecting societies under the Copyright Act 1968, through a new legislative instrument — A New Tax System (Goods and Services Tax) (Attribution Rules – Supplies and Acquisitions Relating to Collecting Societies) Determination 2025  (the Determination).

This Determination modifies the standard rules in Division 29 of the GST Act to better reflect the unique operations of collecting societies, which manage copyright licensing and royalty distributions on behalf of artists, authors, and other copyright owners. Specifically, it adjusts how GST and input tax credits are attributed for:

• Taxable supplies made by collecting societies to copyright owners.
  
• Taxable supplies made by copyright owners to third parties, and
  
• Creditable acquisitions made by copyright owners.

The new Determination replaces the 2015 version, which was due to sunset on 1 October 2025, but maintains the same substantive effect. It came into force on 10 September 2025.

Application of Intermediary Arrangements to Multi-Media Industry for GST Purposes

The GST treatment of multi-media product transactions will continue to allow the use of simplified intermediary arrangements under section 153-50 of the GST Act, following the release of a new legislative instrument — A New Tax System (Goods and Services Tax) (Application of Intermediary Arrangements to the Multi-Media Industry) Determination 2025  (the Determination).

Under these arrangements, intermediaries (such as distributors or agents) are treated as if they are the supplier or acquirer, rather than the principal, simplifying GST reporting obligations. The Determination uses section 153-65 to deem that such arrangements apply automatically to multi-media product supplies or acquisitions, without requiring a written agreement between the intermediary and principal — unless either party opts out in writing.

This new Determination replaces the 2015 version, which was set to sunset on 1 October 2025, and retains the same substantive effect. It came into effect on 10 September 2025.

Determination on Effective Life of Depreciating Assets Finalised

The ATO has finalised a legislative instrument setting out the effective life of certain depreciating assets for tax depreciation purposes. The Income Tax Assessment (Effective Life of Depreciating Assets) Determination 2025, made under section 40-100(1) of the ITAA 1997, helps taxpayers calculate depreciation under Division 40 of the Act.

Taxpayers may use either the Commissioner’s determined effective life (as provided in this instrument) or choose to self-assess under section 40-105.

This instrument replaces the Income Tax (Effective Life of Depreciating Assets) Determination 2015, which was due to sunset on 1 October 2025, and maintains the same substantive effect.

The instrument commenced on 16 September 2025.

News Instrument on PAYG Withholding Finalised

A new legislative instrument has been finalised that allows the Commissioner to reduce PAYG withholding to nil for certain allowances in specific cases. The Taxation Administration (Withholding Variation for Payment of Certain Allowances) Legislative Instrument 2025, made under section 15-15 of Sch 1 of the Taxation Administration Act 1953, applies where the allowance is a specified type (e.g. for car expenses, laundry expenses, travel expenses, overtime meal allowances, and award transport payments), the payer reasonably expects the payee will incur deductible expenses equal to or exceeding the allowance, and the payment is separately recorded.

This instrument replaces the 2015 version, which was due to sunset on 1 October 2025, and maintains the same substantive rules. It commenced on 17 September 2025.

GST Determination on Extension of Time for Adjustment Note Finalised

A new legislative instrument has been finalised to extend the time allowed for electricity distributors and public utility providers to issue adjustment notes in certain situations. The A New Tax System (Goods and Services Tax) (Extension of Time to Issue an Adjustment Note – Electricity Distributors and Public Utility Providers) Determination 2025 replaces the following 3 instruments that were due to sunset on 1 October 2025:

• Goods and Services Tax: Extension of Time to Issue An Adjustment Note Determination (No 35) 2015.
  
• Goods and Services Tax: Extension of Time to Issue An Adjustment Note Determination (No 36) 2015, and
  
• Goods and Services Tax: Extension of Time to Issue An Adjustment Note Determination (No 37) 2015 – Supplies made by electricity distributors to electricity retailers.

The new instrument maintains the same substantive effect as the 3 instruments it replaces, allowing adjustment notes to be issued in line with standard industry practices. The instrument took effect from 17 September 2025.

GST Determination on Input Tax Credits for Second-Hand Goods Finalised

A new legislative instrument has been finalised to continue allowing GST-registered entities to use the global accounting method for calculating GST on certain second-hand goods. The A New Tax System (Goods and Services Tax) (Acquisitions of Second-hand Goods) Determination 2025 enables entities to pool input tax credits for eligible second-hand acquisitions from unregistered suppliers and offset them against GST on later sales, rather than tracking each item individually.

This instrument, which maintains the same effect as the 2015 version it replaces, ensures continued administrative ease for businesses who are dealing in second-hand goods.

It came into effect on 17 September 2025.

Notional Liability for GST by Commonwealth Entities

A new legislative instrument, the A New Tax System (GST, Luxury Car Tax and Wine Tax) Directions 2025 (2025 Directions), has been made to replace the similar 2015 Directions, which was due to sunset on 1 October 2025.

The 2025 Directions maintain the existing GST and related tax arrangements for Commonwealth entities, ensuring that they remain notionally liable for certain taxes as intended by Parliament.

The 2025 update makes changes which are primarily administrative, aligning references and drafting with current laws and the Public Governance, Performance and Accountability Act 2013, without changing the underlying policy.

The 2025 Directions apply to tax periods starting on or after 1 October 2025.

GST-Free Supply of Small Packs of Analgesics

A new legislative instrument has been introduced to maintain the GST-free status for supplies of analgesic packs containing 25 tablets or fewer, where the active ingredients are aspirin, ibuprofen, or paracetamol.

The GST-free Supply (Drugs and Medicinal Preparations) Determination 2025 (2025 Determination) extends the grant of GST-free status to small packs of analgesics currently provided under a 2015 instrument (F2015L01466) which was due to sunset on 1 October 2025.

The 2025 Determination is substantially the same as the 2015 instrument and extends the GST-free status beyond 1 October 2025.

Replacement Instrument on Valuation Methods for ESS Start-Up Concession Finalised

The ATO has finalised a new legislative instrument (Income Tax Assessment (Methods for Valuing Unlisted Shares for the Employee Share Scheme start-up concession) Legislative Instrument 2025 (F2025L01085) outlining approved valuation methods for unlisted shares offered under employee share schemes (ESS) that qualify for the start-up concession in s 83A-33 of the ITAA 1997.

This replaces the Income Tax Assessment (Methods for Valuing Unlisted Shares) Approval 2015  instrument, which would otherwise expire on 1 October 2025.

To access the concession, companies must meet market value conditions – shares must be offered at no more than a 15% discount, or rights must be exercisable at no less than the share’s market value at grant. Companies must also report estimated market values under Division 392 of the Taxation Administration Act 1953.

The approved valuation methods under the instrument are:

• Comprehensive method.
  
• Net tangible assets method.

Use of these methods is optional but provides a safe harbour for compliance and reporting. Companies may use alternative valuation methods, but these won’t be Commissioner-approved unless they yield values at least equal to those from the approved methods noted above.

The new instrument took effect from 1 October 2025.

OECD Updates

OECD 2025 Peer Review Reports on Country-By-Country Reporting

The OECD has published its eighth annual peer review, evaluating how 142 jurisdictions are meeting the minimum requirements for Country-by-Country (CBC) Reporting under BEPS Action 13.

The OECD’s 2025 peer review report on BEPS Action 13 found that over 120 of 142 jurisdictions have implemented CBC Reporting requirements for large multinationals, with 22 needing to finalise legal frameworks and 27 advised to make targeted improvements. CBC reports, which detail financial metrics by jurisdiction, are shared between tax authorities under strict confidentiality rules.

To date, 101 jurisdictions have exchange agreements, and 89 meet standards for appropriate use. No jurisdictions were found lacking in confidentiality safeguards. The OECD will continue to assess implementation through these annual reviews.

For further information, please refer to the OECD website.

Other Updates / News

Tax Agent Registration Terminated Against Former Managing Partner Connected to PwC Leaks

The Tax Practitioners Board (TPB) has terminated the tax agent registration of Mr Thomas Seymour, former managing partner of PwC Australia’s Tax and Legal Services division, due to his role in the PwC tax leaks scandal. He is also banned from reapplying for registration for four years.

As a senior leader responsible for supervising partners and overseeing the division’s culture and compliance, in the view of the TPB it noted that Mr Seymour failed to:

• Act with integrity, by allowing a culture within PwC’s Tax and Legal Services division that normalised the sharing of confidential government information, despite internal warnings about its confidentiality.
  
• Implement adequate conflict of interest management, as confidential information from Treasury consultations (2013–2017), involving partners like Mr Peter-John Collins, was widely shared within PwC – including internationally – to gain a competitive and commercial advantage.

These findings constituted breaches of the Tax Agent Services Act 2009 as per the TPB’s release.

Please refer here for further information.

Review Into ATO’s Management of Remission of GIC Commences

The Tax Ombudsman has launched a review into the ATO’s decision-making practices regarding the remission of General Interest Charges (GIC) on tax debts, following strong stakeholder support and rising concerns about the approach being adopted to GIC remissions.

This review comes amid a noticeable increase in complaints—134 in the last financial year—about the ATO’s stricter approach to debt collection and GIC remission. The Ombudsman, Ruth Owen, noted that fewer GIC remissions are being granted, prompting concerns about fairness and transparency in the remission process.

The review will assess the clarity of ATO policies and communications, the reasons behind its tighter GIC remission approach, and whether decisions are consistent, fair, and account for individual circumstances. It will also evaluate whether taxpayers receive adequate explanations when remission is denied, and explore opportunities to improve ATO systems and processes, particularly in light of the financial impact on taxpayers.

For further information, please refer here.

Consultation on Critical Minerals Production Tax Incentive Regulations

Treasury has released exposure draft regulations to clarify and expand the scope of the Critical Minerals Production Tax Incentive (CMPTI) under Division 419 of the Income Tax Assessment Act 1997.

The CMPTI, introduced by the Future Made in Australia (Production Tax Credits and Other Measures) Act 2025, provides a refundable tax offset for companies undertaking eligible processing of critical minerals.

While the Act defines qualifying activities as those involving substantial transformation of critical mineral feedstock through extractive metallurgical processing, the draft Income Tax Assessment (1997 Act) Amendment (Critical Minerals) Regulations 2025 proposes to prescribe additional processing activities and outcomes that don’t fit the general definition but are still intended to qualify.

Specifically, the draft regulations extend eligibility to processing activities involving:

• High Purity Alumina.
  
• Graphite.
  
• Critical mineral-containing precursor cathode active material.

These activities, when conducted with the prescribed purpose, would be treated as CMPTI processing activities. The incentive applies to eligible expenditure incurred from 1 July 2027 to 30 June 2040. The regulations will commence the day after registration, with consultation closed on 10 October 2025.

For further information, please refer here.

Former ATO Employee Sentenced to 5 Months’ Imprisonment

A former ATO employee has been convicted and sentenced to five months’ imprisonment for fraudulently claiming Victorian and Australian government payments using the sensitive personal information of four taxpayers. The offender pleaded guilty to 10 charges, including obtaining financial advantage by deception and aiding and abetting an attempted offence.

The misconduct occurred between October 2020 and April 2022 and involved the creation of false accounts using real taxpayer data to claim up to $60,000 in COVID-19 Test Isolation Payments and income tax refunds.

The case arose from Operation Hay, a joint investigation by the former ACLEI and the ATO, with the matter later transferred to the National Anti-Corruption Commission (NACC) when it commenced operations on 1 July 2023.

An appeal against the sentence is scheduled for 9 February 2026.

More information is available here.

Board of Taxation Terms of Reference for Red Tape Reduction Review

The Board of Taxation has published its terms of reference for its review aimed at identifying opportunities to simplify the tax system and reduce unnecessary compliance burdens.

The government has directed the Board to consult with the business community to pinpoint areas within business tax law and administration where significant, tangible, and measurable reductions in red tape can be achieved to directly enhance productivity.

The terms of reference for the Board under the review include:

• For administrative changes, the Board will provide examples to the ATO to support its red tape reduction work.
  
• For legislative changes, the Board will recommend improvements to the government, ensuring that any proposals enhance productivity, remain revenue neutral, and address potential integrity risks.

The Board will stock take any tax-related compliance and red tape reduction recommendations from the Economic Reform Roundtable public submissions, previous Board reviews and recent stakeholder engagement by the Board as part of the review.

The Government has also requested for the ATO to develop a compliance cost framework to assist the ATO in understanding how regulation and compliance impact taxpayers.

For further information, please refer here.

ACNC Updates Guidance on Public Benevolent Institutions

The Australian Charities and Not-for-profits Commission (ACNC) has revised its Commissioner’s Interpretation Statement on how it determines whether an organisation qualifies as a public benevolent institution (PBI).

The changes incorporate the Full Federal Court’s 2024 decision in Equality Australia Ltd v ACNC, which confirmed that the definition of a PBI does not require a strict or direct link between an organisation’s activities and its benevolent outcomes.

The revised statement explains that whether there is a sufficient connection between an organisation’s activities and its charitable purpose is a matter of fact and degree. It also clarifies that engaging in advocacy does not automatically disqualify an organisation from being recognised as a PBI.

To support potential applicants, the ACNC has included more examples to illustrate how the guidance applies in practice. The updated statement also acknowledges that the ordinary meaning of a PBI can change over time and that the ACNC will adopt a contemporary approach, recognising modern methods of collaboration and charitable activity.

A compendium summarising stakeholder feedback on the updates has also been published.

The revised interpretation statement took effect from 29 September 2025.

For further information, please refer here.

ATO Rulings & Activity

ATO Treatment of Exempt Income of International Organisations and Connected Persons

The ATO has finalised Taxation Ruling TR 2025/1, clarifying the income tax exemption for international organisations and people connected with them, under s 6-20 of ITAA 1997 and the International Organisations (Privileges and Immunities) Act 1963 (IOPI Act).

The ruling confirms that income is exempt where:

• The organisation is declared under the IOPI Act.
  
• The individual is currently connected in a prescribed way (e.g. office holders, committee members, etc.).
  
• The regulations provide a tax exemption for that role.

It also clarifies:

• Each organisation’s exemption scope varies and is specified in its own regulations.
  
• Exempt income does not apply to former employees (e.g. pensions, termination payments are not exempt).
  
• Income exempt under the IOPI Act is excluded from tax calculations entirely (not subject to “exemption with progression”).

A compliance appendix sets out acceptable documentation for proving eligibility. The ruling applies retrospectively unless it conflicts with an existing settlement.

ATO Guidance and Compliance Approach on Thin Cap Third Party Debt Test

The ATO has set out the Commissioner’s views on the third party debt test in Taxation Ruling TR 2025/2.

The Treasury Laws Amendment (Making Multinationals Pay Their Fair Share—Integrity and Transparency) Act 2024 (the Act) introduced significant reforms to Australia’s thin capitalisation rules in Subdivision 820-AA of the ITAA 1997.

The Act established three tests to limit debt deductions for general class investors:

1. Fixed Ratio Test.
   
2. Group Ratio Test.
   
3. Third Party Debt Test – the third party debt test also applies to financial entities that are not authorised deposit-taking institutions.

The Act also introduced Debt Deduction Creation rules in Subdivision 820-EAA of ITAA 1997. These rules disallow debt deductions arising from certain related party arrangements, further tightening the integrity of the thin capitalisation regime.

In addition, the ATO also updated its compliance approach to restructures carried out in response to these reforms. The guidance clarifies how the ATO will assess restructures and the application of the new tests, with a focus on arrangements that may seek to circumvent the intent of the law.

TR 2025/2 provides the ATO’s interpretation of the third party debt test, focusing on the conditions in s 820-427A. These conditions are crucial for working out an entity’s third party earnings limit, which in turn determines how much (if any) debt deductions are disallowed under the thin capitalisation rules.

The finalised ruling (previously released as draft TR 2024/D3) includes:

• Further guidance and clarification on how the “obligor group” is depicted in examples 5, 6, and 8.
  
• A clearer explanation of what constitutes “Australian assets,” with a new illustrative example (example 12).
  
• Clarification on how minor or significant assets interact with s 820-427A(4)(b).
  
• Expanded discussion of the phrase “commercial activities in connection with Australia.”

TR 2025/2 applies both before and after its date of issue, except where it would conflict with the terms of a dispute settlement agreed before 1 October 2025.

The ATO has published a compendium of feedback received on the draft ruling. The new ruling should be read together with Practical Compliance Guideline PCG 2025/2 for a complete understanding of the ATO’s compliance approach.

PCG 2025/2

Practical Compliance Guideline PCG 2025/2 provides an overview of the ATO’s compliance approach for the third party debt test, especially in light of recent legislative changes.

The guideline now includes Sch 3, which outlines how the ATO will approach compliance in the following areas:

Section 820-427A(3)(c):

How the ATO determines if this condition is satisfied, particularly in cases where:

• There is restructuring to remove recourse for payment of a debt to assets that are not “Australian assets.”
  
• There is a question of whether certain assets are considered “minor or insignificant.”

Section 820-427A(3)(d):

• How the ATO determines if this condition is satisfied in relation to certain distributions.

Section 820-427C(1)(d):

• The ATO’s approach to restructuring undertaken to comply with this provision.

These updates clarify the ATO’s compliance focus and provide practical guidance for taxpayers navigating the third party debt test, especially regarding asset classification, restructuring, and distributions.

The guideline is intended to help taxpayers understand the ATO’s expectations and risk assessment processes when applying the third party debt test under the thin capitalisation rules.

ATO Finalises Guidance on Div 7A and Loans Through Interposed Entities

The ATO has confirmed the Commissioner’s view in TD 2025/6 that section 109U of the ITAA 1936 does not restrict the type of entity that can be the “first interposed entity” in a loan arrangement guaranteed by a private company. This means the entity receiving the guarantee, such as a public company or bank, need not be a private company. However, to trigger Division 7A, the entity ultimately making the payment or loan to a shareholder or associate must be a private company.

The ruling clarifies that s 109U only applies where all conditions are met, including a reasonable person concluding the arrangement was made to benefit a shareholder, and the paying private company having insufficient distributable surplus.

The ATO will focus compliance efforts on high-risk, artificial arrangements designed to avoid Division 7A. However, it will not apply s 109U where a genuine Division 7A-compliant loan agreement exists. The determination applies both before and after its issue, unless it conflicts with prior settlements.

ATO Ruling on Superannuation Contributions Updated

The ATO has updated Taxation Ruling TR 2010/1 to clarify its position on how the amended non-arm’s length income provisions – introduced through the Treasury Laws Amendment (Support for Small Business and Charities and Other Measures) Act 2024 – which interact with the rules governing superannuation contributions.

It also confirms that the Commissioner will not apply a compliance approach to value shifting arrangements occurring on or after 28 November 2024.

However, Appendix 2 of the Ruling outlines compliance approaches for arrangements entered into prior to that date. Additionally, the Ruling reflects minor revisions and removes the maximum earnings test for claiming deductions on personal contributions, effective from 1 July 2017.

The amendments to this Ruling are intended to assist superannuation fund trustees in assessing how the non-arm’s length income and contribution provisions apply to their specific circumstances.

ATO Guidance on Employee Share Acquisition Schemes Withdrawn

The ATO has withdrawn Taxation Determination TD 93/60 and Taxation Ruling IT 2516 as they have no ongoing relevance.

TD 93/60 – It was determined that Australian employees granted shares through a foreign company’s employee share scheme fell within the scope of the now-repealed section 26AAC of the Income Tax Assessment Act 1936.

IT 2516 – It described the impact of a legislative amendment on the employee share scheme provisions previously set out in former section 26AAAC of the ITAA 1936. The explanation covered the conditions for excluding the discount on employee share scheme shares from assessable income, and clarified that, when calculating any capital gain or loss, the cost base of such shares must be reduced by the amount of the discount that was excluded from assessment under the former section 26AAAC.

The withdrawals take effect from 9 October 2025 and are withdrawn without replacement.

Employee share schemes are now governed by Div 83A of ITAA 1997.

ATO Corporate Tax Transparency Report

The ATO has released its annual corporate tax transparency report for the 2023-24 income year.

The report examines combined data from the 2023–24 income tax returns of major corporations in Australia. It reviews shifts and patterns in key summary figures for the overall group, and also breaks down the data by industry sector and type of ownership.

The data covers corporate tax entities with total income of $100 million or more, as well as those liable for petroleum resource rent tax (PRRT).

The report includes the following key highlights:

• The number of entities with total income over $100 million increased by 3.1%.
  
• Australian public and private entities represent 58% of the corporate tax transparency population and contribute 61% of total tax payable.
  
• Tax payable remains highly concentrated: entities with income above $5 billion make up only 2.3% of the population but account for 59.3% of tax payable.
  
• The mining, energy, and water sector continues to be the largest contributor to tax payable.
  
• The proportion of entities paying no tax continues to fall – about 28% paid nil tax, the lowest level in 11 years of reporting.
  
• More taxpayers are now paying Petroleum Resource Rent Tax (PRRT), rising from 11 to 16 payers, but total PRRT payable dropped by 20.6%, mainly due to lower production and oil prices.

Please refer to the ATO website for further information.

ATO Consulted on Changes to High Assurance Top 100 GST Program Reporting

The ATO is proposing to transition from regular GST refresh reviews to a four-yearly assurance check-in for eligible Top 100 high assurance GST reporters. This change reflects the strong assurance already obtained in this group and the introduction of the Supplementary Annual GST Return (SAGR).

Under the proposal, high assurance taxpayers who prepare their own GST Analytical Tool (GAT) prior to lodging the SAGR would move to a less intensive review cycle. Ongoing assurance would be maintained primarily through independent tax control testing, alignment of accounting and tax data, and annual profiling.

The ATO was seeking feedback on this proposed approach. The comments for this consultation closed on 29 September 2025. Please refer here for further information.

ATO Access to Advice for a Corporate Board on Tax Compliance Risk

The ATO has updated Practice Statement PS LA 2004/14 to clarify that where a justified trust review has been conducted, the ATO staff will consider it when assessing whether a company has appropriate tax governance frameworks in place, which is a key condition for accessing the board-level tax risk advice concession.

The update reinforces that the concession applies only to companies demonstrating sound tax risk and governance practices, as outlined in the ATO’s governance review guide. It also confirms that tax compliance advice to corporate boards should generally remain confidential, and no adverse inference should be drawn if a company chooses not to share such advice with the ATO.

ATO’s Second R&D Tax Incentive Transparency Report

The ATO has released its second annual transparency report on the Research and Development (R&D) tax incentive, detailing which companies claimed the incentive during the 2022–23 financial year.

The report shows that companies claimed a total of $16.2 billion in R&D expenditure. Nearly 13,000 companies made claims, with small businesses (under $10 million turnover) representing 46% of claimants.

Privately owned and wealthy groups accounted for 35%, while public and multinational companies made up 19%.

The professional, scientific, and technical services sector had the most claimants, followed by manufacturing. The report includes original and amended expenditure amounts reported by entities but does not publish adjustments made by the Commissioner.

Under section 3H of the Taxation Administration Act 1953, as introduced by Schedule 6 to the Treasury Laws Amendment (A Tax Plan for the COVID-19 Economic Recovery) Act 2020, the ATO must publicly disclose certain details regarding the R&D activities of entities that claim the R&D tax offset. The ATO will continue publishing these reports annually.

For further information, please refer here.

Class Rulings Issued:

Latest Australian Tax Cases

Tax Agent Misconduct – Auz Taxation Pty Ltd & Sumit Bagga

Case: Auz Taxation Pty Ltd & Anor v Tax Practitioners Board [2025] ARTA 1711.

Date: 5 September 2025.

Summary: The ART overturned the termination of registrations for Sumit Bagga and Auz Taxation. Misconduct was traced to a single employee who committed fraud using shared login credentials. The tribunal found Mr Bagga took corrective steps and that cancellation would unfairly affect thousands of clients. A written caution and remedial actions were ordered instead.

R&D Tax Incentive Denied – Ultimate Vision Inventions Pty Ltd

Case: Ultimate Vision Inventions Pty Ltd v Industry, Innovation and Science Australia [2025] ARTA 1813.

Date: 17 September 2025.

Summary:

The ART denied R&D tax incentive claims for 2014–2016 due to lack of evidence that registered research activities were actually conducted. The tribunal found documentation unclear and activities unlikely to meet eligibility criteria.

Superannuation Guarantee Charge Upheld – PCQT

Case: PCQT v Commissioner of Taxation [2025] ARTA 1873.

Date: 19 September 2025.

Summary: The ART upheld SGC assessments against a professional services worker who failed to prove that payments to his former spouse were not wages. Evidence from PAYG summaries and tax filings supported the Commissioner’s position. Hearsay from unrelated proceedings was dismissed.

Input Tax Credits Denied – Barth Family Trust

Case: Trustee for Barth Family Trust v FC of T [2025] ARTA 1558.

Summary: The ART ruled that input tax credits claimed more than four years after the due date were invalid under section 93-5 of the GST Act. The taxpayer’s arguments about time extensions and review processes were rejected. The case is now under appeal in the Federal Court.