7 September 2026 to 11 September 2026
Weekly Bulletin Contents
TAX
MONDAY 7 september 2026
Federal Court confirms taxpayer not a resident
The Federal Court has dismissed the appeal of the taxpayer from the decision of the ART in Quy and FCT [2025] ARTA 174. In that case, the ART found that the taxpayer who lived and worked in Dubai between 2015 and 2020 (albeit, returning to Australia 12 time to visit his wife and children for periods ranging from a week to 5 weeks) was a resident of Australia under the “domicile test” on the basis that he had not established a “permanent place of abode” outside Australia. In affirming the ART decision, the Court found that there had been no “misapprehension, mistake, misconception, unreasonableness or miscarriage of judgment” that would authorise it to interfere with the ART’s decision and set aside its conclusion. The Court also found that it was open to the ART to conclude that it was not satisfied that the taxpayer had a “permanent place of abode” outside Australia. (Quy v FCT [2026] FCA 1316, 4 September 2026)
Ruling finalised: Royalties re software and intellectual property rights
The ATO has finalised TR 2026/2: Income tax: royalties – character of payments in respect of software and intellectual property rights. The Ruling considers when a payment under a software intermediation arrangement is subject to withholding tax because it is a royalty as defined in s 6(1) of the ITAA 1936. It focuses on cross border payments: for the use of, or right to use, copyright or other like property or right; and that may otherwise fall within another element of the definition of a ‘royalty’. The Ruling states that where an amount paid under a software intermediation arrangement is a royalty under a standard tax treaty definition, it will also be a royalty under the domestic tax law definition.
ATO: Data quality matters for Payday Super!
In relation to the new Payday super obligations, the ATO has advised employer to keep payroll data up to date to reduce errors, prevent delays and supports timely super payments. In particular, the ATO said to support super contributions going where they should, make sure you: keep employee details up to date, including names, dates of birth, TFNs and super account details; check employee information is accurate before processing payroll; work with your payroll or super service provider to resolve data issues promptly; and review your payroll processes regularly to reduce errors.
tuesday 8 september 2026
Draft compliance guideline on cross-border software payments
The ATO has released Draft Practical Compliance Guideline PCG 2026/D4. It outlines the ATO’s compliance approach to identifying whether any part of a cross-border payment made to a non-resident is a royalty and subject to withholding tax (royalty risk). This includes providing clarity on arrangements that will not attract its attention, thereby providing confidence to, and avoiding unnecessary compliance costs for, in-scope businesses. Comments due: 2 October 2016.
Man jailed over NSW fraud syndicate re GST and NDIS
The ATO has advised that a man aged 37 was recently sentenced by the Paramatta District Court to four years’ imprisonment for his role in a multimillion-dollar fraud against the National Disability Insurance Scheme (NDIS) and ATO. The man was also ordered to repay the Commonwealth $30,675 and will be eligible for parole after serving two years and four months’ imprisonment. This is the final sentencing under Operation Pegasus, an investigation into a criminal syndicate which operated across three companies to defraud the NDIS of millions of dollars in false claims, and made false claims for GST refunds to the ATO.
Charity secrecy reform – deregistration and finalised investigations
Treasury has released new draft regulations that will allow the Australian Charities and Not‑for‑profits Commission (ACNC) to share more information about how it regulates charities. This will make its actions more open and easier for the public to understand. Under the proposed new rules, the ACNC must explain why it makes the decision to cancel a charity’s registration. These regulations will also allow the ACNC to release information about its investigations when it is in the public interest. The ACNC will apply a public interest test before it discloses this information. These regulations form part of the 2023–24 Budget measure to increase transparency in ACNC activities. Comments due by 2 September 2026.
wednesday 9 september 2026
ATO: SMSF quarterly statistical report June 2026
The ATO has released the June 2026 quarterly SMSF statistics. Highlights include: there are 680,301 SMSFs; there are 1,246,552 members of SMSFs; the total estimated assets of SMSFs are $1.107 trillion; the top asset types held by SMSFs (by value) are (a) listed shares (26% of total estimated SMSF assets) and (b) cash and term deposits (16%); 53% of SMSF members are male and 47% are female; and 74% of SMSF members are 50 years or older. Also published highlights for 2024–25 include: the average assets per SMSF member were $920,000; the average assets per SMSF were $1.7m; member contributions into SMSFs were $23 billion; and employer contributions into SMSFs were $6.9 billion.
Australia/France agreement: arbitration re Base Erosion and Profit Shifting
The Government has released the “Competent Authority Arrangement on the Mode of Application on the Implementation of Part VI of the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting between the competent authorities of the Government of Australia and the Government of France” It provides that a request that unresolved issues arising from a Mutual Agreement Procedure case be submitted to arbitration pursuant to Article 19 of the Convention will be made in writing and sent to one or both of the competent authorities. The request must contain sufficient information to identify the case. The request will also be accompanied by a written statement that no decision on the same issues has already been rendered by a court or administrative tribunal.
ART affirms decision to ban financial adviser for 5 years
The ART has affirmed a decision of ASIC to ban a financial services adviser for 5 years for participation in an “advice giving model” in contravention of his “best interest” duties. The ART agreed that the advisers activity involved misleading and deceptive conduct and that a banning order of five years was the correct and preferable decision. (Hanley and ASIC (Taxation and business) [2026] ARTA 1928, 7 September 2026)
thusday 10 september 2026
Retirement village entry fee not an assessable lease premium
Five taxpayers who were the beneficiaries of trusts that operated a retirement village have been successful before the ART in arguing that “lease Loan payments” made by new residents on entering into a contract to reside in the retirement village was not assessable income in the form of a “lease premium”, but was of a non-assessable capital nature. In doing so, the ART accepted the taxpayers’ argument that the payment was a contribution to capital (as were the similar payments made by new residents previously under different contract arrangements). In arriving at this conclusion, the ART found it significant that there was a “repayment mechanism” on the resale of the unit or on the death of the resident, which meant that the trust did not derive any real financial benefit death. (Silverfern Investments (WA) Pty Ltd and FCT (Taxation and business) [2026] ARTA 1619, 5 August 2026)
Tribunal affirms decision to cancel the registration of a tax agent for 3 years
The ART has affirmed the decision of the Tax Practitioners Board (TPB) to cancel the registration of a tax agent for 3 years in connection with his multiple breaches of the Code of Professional Conduct in circumstances where he had been previously investigated and sanctioned and where he had failed to disclose adverse findings in other legal matters that were relevant to his good fame. His breaches of the Code included failure to meet personal tax compliance obligations and to report on continuing professional education. In affirming the decision, the ART noted his various health problems but nevertheless agreed the decision to cancel his registration was warranted in the circumstances. (Richards and Tax Practitioners Board [2026] ARTA 1951, 8 September 2026)
No input tax credits for AirBnb “property development” purchase
A taxpayer that claimed it carried on a business of acquisition, renovation and operation of properties as Airbnb accommodation has been unsuccessful before the ART in claiming input tax credits of $50,000 in respect of a property purchase that fell through. Essentially, the ART found on the evidence that the activities undertaken by the taxpayer had not moved beyond commencement steps and indicated “intention” rather than the actual carrying out of relevant activities. As a result, the ART ruled that the taxpayer had not established that the acquisitions were acquired for a creditable purpose. (XP Investments Pty Ltd and FCT (Taxation and business) [2026] ARTA 1890, 21 August 2026)
Average foreign exchange rates for August 2026
The ATO has released the average foreign exchange rates for August 2026 ($1A equivalent) for selected countries: Canadian dollar – 0.9878; Chinese renminbi – 4.7840; European euro – 0.6127; Hong Kong dollar – 5.5703; Indian rupee – 67.8075; Indonesian rupiah – 12653.3000; Japanese yen – 112.8730; Malaysian ringgit – 2.8862; New Zealand dollar – 1.2025; Singapore dollar – 0.9064; South Korean won – 996.0740; Thai baht – 23.4435; UK pound sterling – 0.5245; and United States dollar – 0.7102.
friday 11 september 2026
Deputy Commissioner: AI is a powerful tool!
In a recent conference speech, Deputy Commissioner Andrew Watson emphasised the powerful effect of using AI in conjunction with the ATO’s collected data especially when it comes to detecting fraud. Mr Watson also pointed out AI’s utility in “analysing deductions” and “identifying income”. Mr Watson concluded by saying that the ATO s approach is not to deploy AI just for the sake of AI, “but to combine quality data, strong analytics, AI capabilities and human judgement to solve real problems”.
Tax Bill amending CGT foreign resident regime passed
The Treasury Laws Amendment (Strengthening Accountability for Tax Adviser Misconduct and other Measures) Bill 2026 has been passed by Parliament and awaits Royal Assent. Measures contained in the Bill will: expand the Tax Practitioners Board’s regulatory penalty powers; amend the foreign resident CGT regime, including by clarifying and broadening the foreign resident CGT tax base by introducing a definition of ‘real property’ on which a foreign resident will be liable for CGT; provide a transitional 50% CGT discount for certain foreign residents who dispose of Australian renewable energy assets; amend the operation of the mandatory and suspensory merger control regime; update the list of deductible gift recipients; and rename public and private ancillary funds as public and private giving funds.
Pt IVA applies to capital gain of $173m on sale of major hotel
The Federal Court has dismissed the appeal of a taxpayer (Hilton International Australia Pty Ltd – HIA) in relation to the application of Pt IVA to its 2015 sale of the Sydney Hilton Hotel (and related assets). HIA, as provisional head of a multiple entry consolidated group, had structured the sale so that a related entity (AHA) held the hotel assets. The sale involved transferring the sole share in AHA to a third-party purchaser (with repayment of substantial intra-group debt), resulting in no net capital gain being included in HIA’s assessable income for the 2015 income year. The Commissioner determined under s 177F of the ITAA 1936 that a tax benefit of approximately $173.3m (in the form of the omission of a net capital gain) should be cancelled and included in HIA’s assessable income, and disallowed HIA’s objection.
In finding that Pt IVA applied to the sale, the Court found that in terms of the “tax benefit” requirement, the alternative postulates were reasonable and would have produced substantially the same commercial outcome but would also have required inclusion of a significant net capital gain in HIA’s assessable income. In terms of finding that the “dominant purpose” requirement was met, the Court found that the following factors pointed to tax avoidance as the prevailing purpose, rather than purely commercial objectives: the manner in which the scheme was implemented, its form and substance, timing, tax results and financial consequences. (Hilton International Australia Pty Ltd v FCT (No 2) [2026] FCA 1325)
Productivity Commission: Business reporting – call for submissions
The Productivity Commission (PC) has released a submissions paper to analyse non-financial business reporting requirements to identify significant regulatory pain points and instances where the objectives of this reporting could be achieved more efficiently. The submissions paper outlines: the scope of the project; our procedures; how to make a submission. However, the PC welcomes input on any issues that participants consider relevant to this inquiry.
SUPER & FINANCIAL SERVICES
ATO flags valuations in updated Division 296 auditor guidance
The ATO has updated its guidance for SMSF auditors on Division 296. Auditors are reminded to check that sufficient and appropriate evidence supports the market value reported for each asset. Regulation 8.02B requires trustees to value fund assets at market value. If there is insufficient evidence the auditor should consider lodging an auditor contravention report (ACR).
Regulation 5.03 requires trustees to allocate investment returns to members on a fair and reasonable basis. A breach may warrant a modified independent auditor’s report (IAR). Reg 5.03 is not reportable on an ACR. Auditors can raise related concerns in Section G – other regulatory information.
APRA Quarterly Superannuation Performance publication
APRA has released its Quarterly Superannuation Performance publication report for the June 2026 quarter. Total superannuation assets increased by 6.6% over the quarter to $4.8 trillion as at June 2026, of which $3.4 trillion was in APRA-regulated funds.
Key statistics
| June 2025 | June 2026 | Year-on-year change |
Total superannuation assets ($bn) | 4,353.9 | 4,767.2 | +9.5% |
Total APRA-regulated assets ($bn) | 3,047.4 | 3,411.5 | +11.9% |
Total self-managed super fund assets ($bn) | 1,068.7 | 1,107.2 | +3.6% |
Exempt public sector superannuation schemes assets ($bn) | 177.8 | 187.8 | +5.6% |
Balance of life office statutory fund assets ($bn) | 60.0 | 60.7 | +1.2% |
Draft legislation released for min 30% tax on discretionary trusts
The Government has released draft legislation to implement the core components of the minimum tax on discretionary trusts announced in the 2026-27 Budget. The Government said that the draft legislation builds on the consultation paper released in July and includes expanded options to limit or eliminate restructuring costs for small businesses and others using discretionary trusts. This includes a new option for discretionary trusts to be exempt from the minimum tax if they elect to make fixed distributions to pre-nominated beneficiaries, as an alternative to roll-over relief. The election would not require a restructure and is not expected to result in state and territory stamp duties.
Specifically, the Government is seeking feedback on the following matters: how the minimum tax will work; excluded types of trusts and income; the definition of fixed trust; how income tax-exempt entities will be treated; roll-over relief; the new electable regime for exclusion from the minimum tax; and, treatment of excess franking credits.
Submissions due by 18 September 2026. See Treasurer’s accompanying media release, here.
ATO warns payroll data errors can impact Payday super
The ATO has published guidance for employers on payroll data quality and its impact on Payday super. Under Payday super, super contributions must be made within 7 days of payday.
The common quality failures identified include invalid TFNs, incorrect dates of birth and generic placeholder values sitting in employee records. Where information for an optional field is not available, the ATO says to leave the field blank rather than substitute something.
Employers are reminded that member verification requests (MVR) are a good way to confirm fund details either before a first payment, after employee details change, or where a payment has previously been rejected.
ASFA reports Age Pension reliance at record low
New research from ASFA puts the share of people aged 65 and over receiving a full or part Age Pension at around 56%, down from 70% in 2012.
The Update on Superannuation Account Balances: 2026 Edition has mean balances for people aged 15 and over at $202,644 for men and $164,206 for women, both up by more than $10,000 over the year. For those aged 60 to 64 with super, the mean is $371,379 and the median $203,326.