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

Treasury Laws Amendment (Strengthening Financial Systems and Other Measures) Bill 2025.

The Treasury Laws Amendment (Strengthening Financial Systems and Other Measures) Bill 2025 (the Bill) containing changes to extend the existing instant asset write-off for small business entities, as well as changes to enhance ownership disclosure for listed entities and other tax-related measures has been introduced into parliament.

Key Measures contained within this Bill:

$20,000 Instant Asset Write-Off Extension:

• Extended for small businesses (turnover < $10 million) until 30 June 2026.
  
• Applies to assets first used or installed ready for use by that date.

Enhanced Ownership Disclosure for Listed Entities:

Strengthens disclosure rules under the Corporations Act 2001.

Includes:

• Application to foreign listed bodies.
  
• Higher penalties for non-compliance.
  
• Equity derivatives and short positions.
  
• Expanded ASIC powers (tracing notices, freezing orders).

GST and Fuel Tax Amendments:

• Disability services funded under the new Act are GST-free.
  
• Clarifies attribution of omitted credits to the first return they’re included in.
  
• Aligns Commissioner’s power with time limit rules for claiming input tax credits.

Income Tax Deduction for Reverse-Charged GST:

• Allows deduction where GST paid exceeds input tax credits, effective from 1 July 2023 onwards.

Excise Act Amendments:

• Aligns with Customs Act on tariff proposals.
  
• Commences 28 days after assent.

Cirector Penalty Notices:

• Commissioner can rely on ASIC address records.
  
• Applies retrospectively from 1 July 2024.

ACNC Secrecy Provisions:

• Allows public disclosure of investigations, subject to a public harm test.

Financial Regulator Reviews:

• Reduces review frequency of ASIC and APRA from every 2 years to every 5 years.

Administrative Review Tribunal and Other Legislation Amendment Bill 2025.

The Administrative Review Tribunal and Other Legislation Amendment Bill 2025 (the Bill) was introduced to the Parliament on 3 September 2025.

The Bill proposes amendments to the Administrative Review Tribunal Act 2024 (ART Act) that would expand the situations in which the Administrative Review Tribunal can make decisions without holding a hearing.

The Bill has been referred to the Senate Legal and Constitutional Affairs Legislation Committee, which is scheduled to report its findings by 24 November 2025.

Other Legislation Update

Australian Financial Crimes Exchange data-matching program.

Based on ATO Gazette notice: Commissioner of Taxation – Notice of an AFCX data-matching program 11 August 2025, the ATO will obtain account and transaction data from the Australian Financial Crimes Exchange (AFCX) for the 2024–25 to 2026–27 financial years as part of a data-matching program. This includes personal identification information (e.g., names, addresses, dates of birth, ID document details, IP addresses) and bank transaction details.

The ATO will use this data to match against its own records to:

• Protect taxpayers from identity theft and fraud involving unlawful registration, lodgment, and refunds.
  
• Gather intelligence on scams, fraud, and financial crimes to protect the integrity of the tax and super systems.
  
• Detect and address emerging risks, reduce the impact of scams, and safeguard tax revenue.
  
• Investigate and prosecute financial crimes such as identity theft, money laundering, and organised crime.

Taxation (Multinational—Global and Domestic Minimum Tax) (Qualified GloBE Taxes) Determination 2025 (F2025L00985).

The Taxation (Multinational—Global and Domestic Minimum Tax) (Qualified GloBE Taxes) Determination 2025 formally sets out:

• When a jurisdiction is considered to have a Qualified Income Inclusion Rule (IIR), and/or a
  
• Qualified Domestic Minimum Top-up Tax (QDMTT).
  
• When a jurisdiction is granted QDMTT Safe Harbour status for a fiscal year.
  

This is essential for the correct application and sequencing of the GloBE Rules, ensuring that a country’s domestic legislation aligns with internationally agreed standards.

The list of jurisdictions meeting these requirements will be updated regularly as new information becomes available or tax laws evolve across different jurisdictions.

The determination also specifies jurisdictions with qualifying GloBE taxes retrospectively. Retrospective application is necessary and consistent with the policy outlined in the GloBE Rules that allows jurisdictions to adopt the GloBE Rules from 31 December 2023.

Find out more here.

Simplified GST for government entities selling food in prison.

A new legislative instrument has been issued to continue allowing certain government entities selling food in prisons or detention centres to use simplified GST accounting methods.

The A New Tax System (GST) (Simplified Accounting Methods – Government Entities Selling Food in Prisons and Detention Institutions) Determination 2025:

Some key points of the legislative instrument are:

• Commenced on 28 August 2025.
  
• Repeals and replaces the 2015 instrument (F2015L01578), which was set to sunset on 11 October 2025.
  
• Maintains the same substantive effect as the previous instrument.
  
• Allows eligible government entities to use one of two simplified methods to calculate their net GST.

To be eligible under section 6 of the determination, an entity must:

• Be a GST-registered government retailer.
  
• Sell both taxable and GST-free food through a sub-entity located in a prison or detention institution.
  
• Have a GST turnover under $2 million for that sub-entity.

Tax invoice requirement waived for supply of a “direct entry service”.

A new legislative instrument – A New Tax System (GST) (Waiver of Tax Invoice Requirement – Direct Entry Services) Determination 2025 has been issued to waive the need for recipients of direct entry services to hold a tax invoice in certain cases before claiming input tax credits.

This 2025 Instrument replaces the 2015 Determination, which was set to expire on 1 October 2025, and maintains the same substantive effect.

Key points:

• Direct entry services refer to the processing of high-volume direct debit and credit payments (e.g., internet banking transactions) by authorised deposit-taking institutions (ADIs).
  
• These services are taxable supplies under the GST system.
  
• Normally, recipients must hold a tax invoice to claim input tax credits for such services.
  
• Given the volume of transactions, requiring a tax invoice for each one would be impractical.
  
• The Commissioner of Taxation will therefore waive the invoice requirement if the conditions outlined in the new Instrument are met.

WET determination: correcting WET errors.

A new determination – A New Tax System (GST) (Correcting Wine Equalisation Tax Errors) Determination 2025 has been issued to allow taxpayers to correct wine tax or wine tax credit errors from an earlier tax period in a later tax period, under specific conditions.

This 2025 determination replaces the 2015 version and maintains a similar purpose.

Key conditions for correcting WET (Wine Equalisation Tax) errors:

• The error must relate to WET or WET credits under the Wine Equalisation Tax Act 1999.
  
• The error must have occurred in a tax period that started on or after 1 July 2012.
  
• The GST return for the later tax period (in which the correction is made) must be lodged within the period of review for the original tax period.
  
• At the time of lodging the GST return:
  
  
  • The error is not subject to a compliance activity, or
    
  • If it is, the Commissioner has given written approval to correct the error under this instrument.
    
• The taxpayer has not already corrected the error in another tax period.
  
• If the error is a debit error (i.e. results in more tax payable), additional conditions in section 7 of the determination must be met.
  
• The taxpayer must be registered for GST.

This determination provides greater flexibility and administrative efficiency for taxpayers in managing past wine tax reporting

Taxation Administration (Withholding Schedules) Instrument (No 2) 2025.

The ATO has issued a new legislative instrument updating the formulas and procedures for calculating PAYG withholding amounts across a range of payment types.

The Taxation Administration (Withholding Schedules) Instrument (No 2) 2025 has been released under section 15-25 of Schedule 1 to the Taxation Administration Act 1953. It outlines how much tax must be withheld from different types of payments under the PAYG system.

The instrument contains 15 withholding schedules for different types of workers, covering:

• Salary and wages.
  
• Allowances.
  
• Annuities.
  
• Unused leave payments.
  
• Return to work payments.
  
• Back payments, bonuses and commissions.
  
• Employment termination payments.
  
• Superannuation income streams and lump sums.
  
• Payments to seniors and pensioners.
  
• Working holiday makers.
  

Schedule 8 has been notably updated to reflect changes from the:

• Universities Accord (Cutting Student Debt by 20 Per Cent) Act 2025.
  
• This includes revised repayment income thresholds for study and training support loans.
  
• A new Quick Code (QC105239) has been assigned to Schedule 8 for easy reference.

The updated instrument will commence on 24 September 2025. It replaces the previous instrument registered on 4 June 2025. No changes have been made to the other 14 withholding schedules.

No public consultation was conducted on this instrument due to the routine nature of the update and the importance of giving employers and software providers time to adjust. The instrument is supported by an explanatory statement, providing further details for payroll professionals, software developers, and tax agents.

OECD Updates

OECD Updates BEPS Action 5 Transparency Framework.

The OECD has revised the minimum standard under Base Erosion and Profit Shifting (BEPS) Action 5, aimed at improving transparency and countering harmful tax practices, particularly around the spontaneous exchange of tax rulings.

A new report titled “Revised BEPS Action 5 Transparency Framework on Tax Rulings” has been released.

The report outlines:

• Results of the OECD’s review of the transparency framework.
  
• Updated terms of reference (effective from the 2025 review year).
  
• New peer review assessment methodology (from 2026).
  
• A revised XML Schema and User Guide for the Exchange on Tax Rulings (ETR), to be used from 1 January 2027.

These updates are designed to enhance consistency, accuracy, and effectiveness in the exchange of tax rulings between jurisdictions.

For further information, please refer to the OECD website.

ASIC Cracks Down on Financial Reporting Non-Compliance.

ASIC has stepped up its oversight of financial report lodgements by large proprietary companies, particularly those that were previously exempt under the grandfathering provisions.

A recent ASIC review revealed significant non-compliance:

• 755 out of 1,166 previously grandfathered companies failed to lodge financial reports for the 2023–24 financial year, despite the removal of lodgement exemptions in 2022.
  
• Of 58 companies suspected to be large proprietary entities, 32 were confirmed to have breached their reporting obligations.

Commissioner Kate O’Rourke stressed the importance of timely and accurate financial reporting, warning that regulatory action will be taken where necessary. She also expressed concern about the lack of breach notifications from auditors, highlighting the critical role auditors play in maintaining corporate transparency.

ASIC is urging companies to proactively assess their reporting obligations and reminding auditors of their duty to report suspected breaches. The regulator has made it clear that it will use its full enforcement powers to ensure compliance.

Please refer here for further information.

Tax Ombudsman Launches Independent Review of ATO’s Case Handling.

The Inspector General of Taxation and Taxation Ombudsman (IGTO) has initiated an own-motion review into the ATO’s management of what’s being called a complex and long running case.

The review aims to investigate allegations of maladministration raised by a taxpayer. It will also look for any systemic issues or broader patterns that might indicate recurring failings in how the ATO handles similar cases.

For now, the Ombudsman has stated that no further public comment will be made until the investigation is finished.

For further information, please refer here.

Economic Reform Roundtable.

The Treasury released three issues papers in the lead-up to the government’s Economic Reform Roundtable hosted in late August.

One of these papers focuses on Budget sustainability and tax reform, outlining key trends, challenges, and opportunities for policy discussion.

The papers aimed to define the key issues for consideration and help shape informed discussion among Roundtable participants.

Key insights from the tax reform paper include:

• Rising pressure on the tax system: Australia’s tax system is increasingly strained by demographic changes and economic shifts. Its future design will be crucial to boosting productivity, ensuring long-term Budget sustainability, and supporting fairness between generations.
  
• Uneven taxation of savings: Inconsistencies in how passive income is taxed are influencing how people choose to save and enabling tax minimisation strategies. Currently, some of the largest tax concessions benefit higher-income earners, while labour income generally faces higher tax rates.
  
• Impact of company tax settings: Existing company tax policies may be discouraging investment and influencing business decisions in ways that reduce productivity, limit job creation, and put downward pressure on wages.
  
• Decline in indirect tax contributions: Over the past two decades, the share of indirect taxes (such as fuel and tobacco excise) has dropped from 29% to 22% of total tax revenue—and this trend is expected to continue due to changes in technology and consumer behaviour.

While the issues paper acknowledges that more work is needed to ensure long-term Budget sustainability, it also highlights the significant progress made by the government in recent years.

Please refer to the Treasury website for further information.

ATO Rulings & Activity

Draft instrument on Pillar Two global minimum tax lodgment exemptions.

The ATO has released a draft legislative instrument proposing exemptions from lodgment requirements for certain large multinational enterprise (MNE) groups under Australia’s recently implemented Global Anti-Base Erosion (GloBE) Rules. These rules, enacted in December 2024, require in-scope MNEs to lodge both an Australian Income Inclusion Rule (IIR)/Undertaxed Profits Rule (UTPR) tax return and an Australian Domestic Minimum Tax (DMT) tax return.

The draft instrument — Taxation Administration (Exemptions from Requirement to Lodge Australian IIR/UTPR tax return and Australian DMT tax return) Determination 2025 outlines situations where, for a fiscal year, entities may be exempt from these lodgements. Exemptions apply where eligibility criteria are met, broadly where the Commissioner considers lodgement unnecessary, such as when an entity would only ever have a nil tax liability under these rules.

However, the Commissioner cannot exempt lodgement of the GloBE information return or foreign lodgement notification, which must still be submitted. Once finalised, the instrument will commence the day after registration, and the ATO is accepting public comments until 24 September 2025.

ATO updates practice statements for global and domestic minimum tax.

The ATO has also updated practice statements for Pillar two global and domestic minimum tax as follow:

• PS LA 2005/2 Penalty for failure to keep or retain records.

• PS LA 2011/15 Lodgment obligations, due dates and deferrals.

• PS LA 2011/19 Administration of the penalty for failure to lodge on time.

• PS LA 2012/4 Administration of the false or misleading statement penalty – where there is no shortfall amount.

• PS LA 2012/5 Administration of the false or misleading statement penalty – where there is a shortfall amount.

Compliance approach on thin cap third party debt test finalised by the ATO.

The ATO has finalized its Practical Compliance Guideline PCG 2025/2, which outlines its compliance approach and risk assessment framework for restructures undertaken in response to the new thin capitalisation rules and debt deduction creation rules.

The new rules, introduced by the Treasury Laws Amendment (Making Multinationals Pay Their Fair Share—Integrity and Transparency) Act 2024 (the Act), aim to limit debt deductions for certain entities.

PCG 2025/2 applies to all restructures initiated on or after 22 June 2023, being the date the Act was introduced into Parliament. It was previously released as Draft Practical Compliance Guideline PCG 2024/D3 and a compendium has been issued on the feedback received on the draft PCG.

ATO finalises guidance on Section 109R: Disregarding Certain Payments Under Anti-Refinancing Rules.

The ATO’s Taxation Determination TD 2025/5 clarifies that s 109R of the ITAA 1936 can be used to disregard certain loan repayments, even when the original loan is a “notional” one created by the interposed entity rules in ss 109T and 109W.

Key notes of TD 2025/5:

• Division 7A aims to prevent private companies from distributing profits to shareholders as tax-free loans.

• Section 109R is a specific anti-avoidance rule that prevents shareholders from circumventing Division 7A by repaying a loan with another loan from the same company.

• Sections 109T and 109W are “interposed entity rules” that create a “notional deemed loan” when a private company provides money or property to an interposed entity (like a trust) which then provides it to a shareholder or their associate.

• The ATO’s determination confirms that s 109R can operate to disregard two types of repayments:
  
  
  • An actual loan repayment made to a private company by a borrower who has a notional loan under s 109T or s 109W.
    
  • A notional loan repayment that would otherwise be considered to have been made under s 109W(3).

• The TD also notes that the ATO may apply Part IVA, the general anti-avoidance provision, to arrangements where loans are refinanced for the purpose of gaining a tax benefit.

This determination applies to both past and future arrangements, unless a settlement has already been reached on the matter.

ATO Fact Sheet: No More Deductions for ATO Interest Charges from 1 July 2025.

The ATO has released a fact sheet outlining recent legislative changes that deny income tax deductions for certain ATO-imposed interest charges, following amendments introduced in the Treasury Laws Amendment (Tax Incentives and Integrity) Act 2025.

Key changes:

From 1 July 2025, taxpayers can no longer claim deductions for:

• General Interest Charge (GIC).
  
• Shortfall Interest Charge (SIC).

For most taxpayers using a 30 June income year, this means interest incurred on or after 1 July 2025 is non-deductible.

For taxpayers with a substituted accounting period (SAP), the changes do not apply if the SAP started before 1 July 2025.

The fact sheet covers:

When interest is “incurred” and provides examples covering:

• Amended assessments.
  
• Late lodgment penalties.
  
• Running balance account (RBA) deficit debts.
  
• This timing determines whether a deduction is denied.

Remissions unaffected:

• The Commissioner’s power to remit GIC or SIC remains unchanged.
  
• Remitted interest is only assessable if the original charge was deductible.

Other guidance includes:

• Treatment of payment plans and GIC.
  
• Deductibility of interest on borrowings used to pay tax liabilities.
  
• Links to further ATO guidance and policy references.

Tax determination confirming bitcoin not a foreign currency.

The ATO has released an addendum to Taxation Determination TD 2014/25 to incorporate the revised definition of “foreign currency” as per Schedule 2 of the Treasury Laws Amendment (2022 Measures No 4) Act 2023.

This addendum clarifies that digital currencies, such as bitcoin, are not considered “foreign currency” under Division 775 of the Income Tax Assessment Act 1997.

Additionally, the addendum includes editorial changes to enhance accessibility, updates to legislative and dictionary references, and revisions to explanatory content to align with the broader interpretation of “currency” under the Currency Act 1965.

This addendum is effective retrospectively from 1 July 2021.

Decision impact statement – DFC of T v MWB Accountants Pty Ltd.

The ATO has accepted a court ruling in DFC of T v MWB Accountants Pty Ltd [2019] which limits its power to recover unauthorized refunds from a tax agent. The case involved an agent, MWB, who lodged a fraudulent BAS, leading to an undeserved refund being paid into its bank account. The ATO attempted to recover the money from MWB using s 8AAZN of the Taxation Administration Act 1953, which allows for the recovery of “administrative overpayments” from the “recipient.”

The court ruled that MWB was not the “recipient” of the overpayment; rather, the client was the intended recipient, and the agent’s bank account was merely the designated place for the client to receive payments. The ATO has withdrawn its appeal and now agrees with this interpretation.

As a result, the ATO has withdrawn its previous practice statement on this issue and now accepts that when an agent receives money on a client’s behalf, the client is considered the recipient.

This decision clarifies that the ATO cannot use this specific section of the law to recover unauthorized refunds directly from a tax agent who acts as a representative.

For further information, please refer here.

ATO decision impact statement on Landcom updated.

The ATO has updated its decision impact statement following the Full Federal Court’s decision in FC of T v Landcom [2022] FCAFC 204.

The Court confirmed that when multiple freehold interests in land are sold under a single contract, each is a separate supply for the purposes of the GST margin scheme. This upheld the earlier Federal Court ruling and dismissed the Commissioner’s appeal.

As a result:

• The ATO has reviewed relevant guidance materials.
  
• An addendum to GST Ruling GSTR 2006/6 was issued on 19 March 2025 to reflect the decision.
  
• Further updates will be made to the notional GST dispute resolution process, addressing jurisdictional issues and potential future legal changes.

Class rulings issued:

Other rulings issued:

• Product Ruling PR 2025/10 Bell Equity Lever instalment receipts. This ruling applies from 1 July 2025.

• Product Ruling PR 2025/11 Bell Geared Equities Investment. This ruling applies from 1 July 2025.

• Product Ruling PR 2025/12 eFleetPass Tolling – toll road gift cards. This ruling applies to specified entities from 20 August 2025 to 30 June 2028. 

• Product Ruling PR 2025/13 Swiss Life (Singapore) Pte. Ltd. This ruling applies to specified entities from 1 July 2025. 

• Addendum to GST Determination GSTD 2012/7A Goods and services tax: when are supplies of interconnection services made by an Australian resident telecommunication supplier GST-free under item 2 in the table in subsection 38-190(1) of the A New Tax System (Goods and Services Tax) Act 1999?. The addendum amends GSTD 2012/7 to include amendments from the Treasury Legislation Amendment (Repeal Day) Act 2015 and update references. The addendum applies both before and after 13 August 2025. 

• Addendum to GST Determination GSTD 2012/8A GST: when are telecommunication supplies made under arrangements for global roaming outside Australia by an Australian resident telecommunication supplier GST-free under item 3 in the table in s 38-190(1) of the A New Tax System (Goods and Services Tax) Act 1999?

• Addendum to GST Determination GSTD 2012/10A GST: when are telecommunication supplies made under arrangements for global roaming in Australia by an Australian resident telecommunication supplier GST-free under s 38-570(1) and s 38-570(3) of the A New Tax System (Goods and Services Tax) Act 1999?

• Addendum to Miscellaneous Taxation Ruling MT 2008/1 which deals with penalties relating to statements. The addendum applies from 1 January 2024.

• Addendum to Miscellaneous Taxation Ruling MT 2008/2 which relates to shortfall penalties for taking a position that is not reasonably arguable. The addendum applies from 1 January 2024. 

• Addendum to Miscellaneous Taxation Ruling MT 2012/3 which relates to administrative penalties in relation to voluntary disclosures. The addendum applies from 1 January 2024.

Latest Australian Tax Cases

• Royalty Withholding Tax: The High Court has by majority dismissed the Commissioner’s appeal against the Full Federal Court decision that PepsiCo was not liable for royalty withholding tax and that the diverted profits tax did not apply. [FC of T v PepsiCo Inc & Anor 2025 ATC [2025] HCA 30, 13 August 2025].
  
• GST Margin Scheme: The Administrative Review Tribunal (ART) has ruled against a property developer, finding that their valuation of long-term leases for GST margin scheme purposes was not reasonable. The decision hinged on the nature of the land acquisition and the taxpayer’s failure to account for it properly. [ZKSM v FC of T 2025 ATC [2025] ARTA 1298, 11 August 2025].
  
• Assessments: The Full Federal Court has dismissed the taxpayers’ appeal in Rusanov & Anor v FC of T for want of prosecution and default of appearance, leaving in place the Federal Court’s earlier decision which upheld default assessments treating unexplained deposits and expenses in the taxpayers’ bank accounts as taxable income. The court found no error in the AAT’s original decision, as the taxpayers failed to provide contemporaneous evidence to support their claims that the amounts were gifts or loans. [Rusanov & Anor v FC of T 2024 ATC[2024] FCA 777].

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