8 December 2025 to 12 December 2025
Weekly Bulletin Contents
TAX
Monday 8 December 2025
ATO Employees guide for work expenses updated
The ATO has updated its Employees guide for work expenses for the following matters; deducting dental expenses, medical expenses, passport expenses and travel insurance expenses; the increased fixed rate for working from home expenses; how to calculate home charging of electricity from 1 July 2024 for a plug-in hybrid electric vehicle.
Matter before ART dismissed for failure to attend etc
The ART has granted the Commissioner’s request for the dismissal of a long running matter before it. The ART did so essentially on the basis of the taxpayer’s failure to attend hearings or conferences etc (from which it inferred that the taxpayer was no longer interested in progressing her application). It also took into account that the taxpayer was no longer legally represented and so was at a disadvantage in the conduct of the application compared to the Commissioner. (PJFX and FCT (Taxation) [2025] ARTA 2560, 26 November 2025)
Critical minerals regulation re prescribed activities
The Government has released the Income Tax Assessment (1997 Act) Amendment (Critical Minerals) Regulations 2025. The regulations will prescribe certain critical minerals processing activities that are intended to be eligible for the Critical Minerals Production Tax Incentive (“CMPTI”) refundable tax offset that would not otherwise meet the general test.
PS LA 2025/2 released re public country-by-country reporting exemptions
The ATO has released Practice Statement Law Administration PS LA 2025/2 Public country-by-country reporting exemptions. It outlines: the background on the Public CBC reporting regime; considerations relevant to exercising the discretion; the process for seeking an exemption from Public CBC reporting obligations; the information that reporting entities (applicants) should provide with the exemption application, and guidance about timeframes and review options.
Synthesised text of MLI with Argentina
The Government has released the synthesised text of the “Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting”) and the Agreement between Australia and the Government of the Argentine Republic for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income.
Draft miscellaneous amendments to Treasury portfolio Laws
The Government has released miscellaneous draft amendments for comment related to the Treasury portfolio. The proposed amendments correct technical or drafting defects, remove anomalies and address unintended outcomes. Comments due 2 January 2026.
Tuesday 9 December 2025
ATO returns over $1 billion in unpaid super to employees
The ATO has released new data, revealing $1.1bn in unpaid super has been returned to nearly a million individuals’ super accounts in 2024–25. The ATO said the latest figures show its compliance efforts to protect employee’s super entitlements are continuing to pay dividends and that it issued over 200,000 proactive reminders and prompts, helping more employers stay on track, as well as taking stronger action against those employers who failed to comply.
The ATO also said it raised almost $800m in SGC liabilities, through: 120,000 reminders to employers; more than 70,000 prompts to employers; and approximately 15,000 audit cases. The ATO also said that the more than $200m raised in penalties should act as a warning to employers that paying correct super entitlements on time is not optional.
TPB announces its 2026 compliance priorities
Armed with an expanded Code of Professional Conduct that has been in place for nearly six months now, the Tax Practitioners Board (TPB) has announced its 2026 compliance priorities to provide greater transparency and clarity to the tax profession. By publishing these priorities for the first time, the TPB aims to promote integrity, support voluntary compliance, and strengthen community confidence in the tax profession.
These priorities include targeting tax practitioners who:
- help clients avoid paying tax debts or engage in illegal phoenix activities, undermining employee entitlements and creditors’ rights;
- put clients into schemes designed to avoid tax, such as artificially shifting profits to low-tax jurisdictions, hiding income or assets in secrecy havens illegally, and misusing research and development concessions;
- facilitate shadow economy activities;
- encourage clients to overclaim work-related expenses;
- engage in activities that exploit vulnerable Australians; and
- fail to meet their personal tax obligations.
Some of these wrongdoings may be in the eyes of the beholder, but failing to keep up with your personal lodgement and payment obligations is not.
Wednesday 10 december 2025
No R&D Tax Incentive for gambling or tobacco
The government is seeking feedback on recently released draft legislation to stop gambling and tobacco related activities from being eligible for the Research & Development Tax Incentive.
The government announced the change in the 2024-25 MYEFO in December 2024. It will help ensure the R&DTI doesn’t subsidise research and development activities in these areas.
The change will apply for income years starting on or after 1 July 2025. R&D activities that are solely aimed at harm minimisation, for example to reduce addiction, will remain eligible for the incentive.
Deloitte Access Economics calls for tax based budget repair
In its December 2025 Budget Monitor (see here), Deloitte Access Economics calls for five major tax policy changes to help put Australia’s Budget on a more sustainable footing:
- Simplifying the personal income tax system and indexing the tax brackets to inflation. This is intended to increase incentives to work and nail the problem of bracket creep on the head.
- Harmonising the company tax rate at 20% for all companies, while introducing a new tax that only applies to “super profits”.
- Increasing and broadening the GST, alongside a commensurate increase in welfare payments. Rich people spend a lot of money on fresh food, health and education services.
- Reducing the capital gains tax discount from 50% to 33% to better reflect the impact of inflation.
- Introducing a broad-based, low-rate inheritance tax.
More grist for the tax reform mill.
Thursday 11 December 2025
CSLR funding broadened across retail financial sectors
The Minister for Financial Services, Dr Daniel Mulino, has discussed how the Compensation Scheme of Last Resort (CSLR) will be funded in 2025–26 following the collapse of the Shield and First Guardian Master Funds.
A special levy of $47.3 million for the 2025–26 year will be raised across all 23 consumer-facing (retail) sub-sectors of the financial services industry. This includes advice, platforms, superannuation and other retail-facing businesses.
Dr Mulino said the broad-based levy is intended to:
- ensure the CSLR has sufficient funds to continue paying determinations where firms cannot;
- spread the cost so it is not “overly burdensome on any particular sub-sector”; and
- reflect that all retail sectors benefit from confidence and strong consumer protections.
A discussion paper will be released in February on longer-term CSLR funding settings, including possible contributions from parent companies of advice firms, high-risk managed investment schemes and other sectors.
“What have the Romans ever done for us?”
Evoking the not so rhetorical question posed by one of the John Cleese characters in The Life of Brian, the Tax Practitioner Stewardship Group last week released a letter from Commissioner Rob Heferen to the Treasurer and Finance Minister ahead of the September roundtable on fostering improved productivity and economic growth, outlining various administrative initiatives the ATO is planning to introduce in the near term.
Those initiatives include:
- extending the use of third-party data to expand pre-fill;
- embedding an ATO approved simplified instalment calculation in accounting software products used by small business;
- supporting small businesses to voluntarily move to monthly GST reporting;
- supporting businesses through einvoicing – the direct exchange of invoice data between buyers’ and sellers’ systems;
- data driven improvements for trust administration by facilitating more accurate and efficient tax reporting;
- delivering an online experience for unrepresented individuals disputing their tax assessment;
- strengthening the ATO App with new security features; and
- developing a framework to estimate compliance costs.
Crucifixion anyone? [check out the movie – it’s bound to still be streaming somewhere]
A copy of the Commissioner’s letter can be found here
Friday 12 December 2025
Part IVA and personal services businesses – the end of income splitting and deferrals?
Quite possibly for PSI income.
We have noted concerns among practitioners about the recent release of PCG 2025/5, which states that Part IVA can still apply to what the ATO regards as high risk arrangements (income splitting or deferrals), even where a PSE is conducting a PSB. This has, in fact, always been the ATO’s position – they have just rarely enforced it.
Your association has argued in its submission to the draft PCG that the application of Part IVA is far from assured, as the dominant purpose of having an interposed entity in the first place is generally to comply with the demands of end clients who prefer to deal with a corporate entity for a variety of reasons, not all of them tax related. But as is more common than not, the final PCG has maintained its position, and practitioners with clients potentially impacted will need to carefully consider how to move forward.
What may be needed now is a taxpayer who is prepared to put their head above the parapet and take the Commissioner on, Bendel-like – any volunteers?
One important change from the draft PCG is the date of effect. The draft adopted the standard both before and after application, whereas we argued in our submission that where taxpayers fall into line with the final ruling, it should only be prospective. PCG 2025/5 has pretty well taken up our suggestion:
“taxpayers should not be concerned that we will apply compliance resources to pursue
Part IVA where they have made a genuine attempt to move into a low-risk arrangement by 30 June 2027.”
Only a small win, perhaps, but much better than being exposed in relation to prior years.
GIC and SIC rates updated
The ATO has released the GIC and SIC rates for the period from 1 January 2026 to 31 March 2026.
The rates are as follows:
- the GIC rate is 10.65%
- the GIC daily compounding rate is 0.02917808%
- the SIC rate is 6.65%
- the SIC daily compounding rate is 0.01821918%
And by way of contrast, the interest rate on overpayments, early payments and delayed refund interest is 3.65% – creating a gross margin that any banker would envy.
Those rather steep non-deductible rates are probably best avoided.
SUPER & FINANCIAL SERVICES
CSLR funding broadened across retail financial sectors
The Minister for Financial Services, Dr Daniel Mulino, has discussed how the Compensation Scheme of Last Resort (CSLR) will be funded in 2025–26 following the collapse of the Shield and First Guardian Master Funds.
A special levy of $47.3 million for the 2025–26 year will be raised across all 23 consumer-facing (retail) sub-sectors of the financial services industry. This includes advice, platforms, superannuation and other retail-facing businesses.
Dr Mulino said the broad-based levy is intended to:
- ensure the CSLR has sufficient funds to continue paying determinations where firms cannot
- spread the cost so it is not “overly burdensome on any particular sub-sector”, and
- reflect that all retail sectors benefit from confidence and strong consumer protections.
A discussion paper will be released in February on longer-term CSLR funding settings, including possible contributions from parent companies of advice firms, high-risk managed investment schemes and other sectors.
ATO returns over $1 billion in unpaid super to employees
The ATO has released new data, revealing $1.1bn in unpaid super has been returned to nearly a million individuals’ super accounts in 2024–25. The ATO said the latest figures show its compliance efforts to protect employee’s super entitlements are continuing to pay dividends and that it issued over 200,000 proactive reminders and prompts, helping more employers stay on track, as well as taking stronger action against those employers who failed to comply.
The ATO also said it raised almost $800m in super guarantee charge liabilities, through:
- 120,000 reminders to employers
- more than 70,000 prompts to employers, and
- approximately 15,000 audit cases
The ATO also said that the more than $200m raised in penalties should act as a warning to employers that paying correct super entitlements on time is not optional.
ASIC releases November 2025 financial adviser exam results
ASIC have announced the outcomes of the 31st Financial Advisers Exam cycle.
Key highlights from the November cycle:
- 308 candidates sat the exam
- 67.5% (208) passed
- 75.6% (233) were first-time participants
Results are issued as pass or fail. To date, 22,386 individuals have taken the exam overall, with 20,754 (92%) passing, showcasing strong competency in practical scenarios.