11 August 2025 to 15 August 2025
Weekly Bulletin Contents
TAX
Monday 11 August 2025
Roundtable issue papers released
The Treasurer has released three issues papers ahead of the Government’s Economic Reform Roundtable from 19-21 August. The papers cover each of the three themes of the Economic Reform Roundtable – resilience, productivity, and budget sustainability and tax reform. In issuing the papers the Treasurer said the papers are deliberately factual and the issues are already well known and broadly understood, but that the paper are being circulated now so participants can spend time at the Roundtable on specific ideas not just problem identification. The issues papers are available on the Treasury website.
Extension granted to lodge objection out of time
The ART has allowed a taxpayer’s application for an extension to lodge an objection out of time. The taxpayer was involved in property development and one of the substantive issues with the ATO was whether activities were undertaken via a joint venture, partnership or trust and the application of the GST margin scheme to properties sold. In allowing the taxpayer’s application the ART took into account the relevant factors (including, the explanation for delay, the merits of the taxpayer’s case, any prejudice suffered by the parties and the interests of justice) to conclude that the balance of factors favoured the objection being accepted as in time. (PTBS and FCT (Practice and procedure) [2025] ARTA 1262, 7 August 2025)
ATO releases its Corporate Plan 2025–26
The ATO has advised that it has released its Corporate Plan 2025–26, covering the period 2025–26 to 2028–29. It provides coverage of the functions of the Australian Taxation Office (ATO), the Tax Practitioners Board (TPB) and the Australian Charities and Not-for-profits Commission (ACNC). The plan has been prepared as required under paragraph 35(1)(b) of the Public Governance, Performance and Accountability Act 2013.
Tuesday 12 August 2025
Consultation on reforms to retirement phase of superannuation
The Government has released consultation papers on 2 key planks of its super retirement phase reforms. The reforms are intended to ensure there is as much of a policy and product focus on the retirement phase as there is on the accumulation phase. It is seeking views from the superannuation sector, workers, retirees and the broader community on the following: the best practice principles for superannuation retirement income solutions (the principles); and the retirement reporting framework (the framework). Comments: due by 18 September 2025.
ATO to data match crime information
The ATO has advised that it will acquire relevant account and transaction data from Australian Financial Crimes Exchange (AFCX) for the 2024-25 financial year through to 2026-27 financial year. The data items include: Client identification details (names, addresses, phone numbers, dates of birth, identity verification document details, IP addresses etc); Bank account transaction details (bank account details, transaction date and amount, IP addresses etc).
Stay granted pending completion of criminal proceedings
The ART has allowed a taxpayer’s unopposed application for proceedings regarding her tax dispute to be stayed pending the completion of criminal proceedings in the Queensland District Court. The stay was the third stay sought by the taxpayer and was subject to various procedural directions. The stay was granted for an initial period of twelve months, and the ART said it would review the progress of the criminal proceedings at the end of that period. (SRSH and FCT (Practice and procedure) [2025] ARTA 1246, 6 August 2025)
Waiver of Tax Invoice Requirement determination made
The A New Tax System (Goods and Services Tax) (Waiver of Tax Invoice Requirement – Direct Entry Services) Determination 2025 has been made. It waives the requirement for a recipient of a supply of a direct entry service, in certain circumstances, to hold a tax invoice in order to attribute the relevant input tax credit to a tax period where the requirements in section 6 are satisfied. Under para 6(a) the recipient must make a creditable acquisition of a direct entry service from an Australian ADI which can include direct credit payments (eg salary and welfare payments), direct debit payments (eg utility bills), and consumer ‘pay anyone’ bank transfers. Para 6(b) requires that the recipient hold a document at the time that they give the GST return to the Commissioner from the Australian ADI that meets the relevant information requirements.
Wednesday 13 August 2025
GST margin scheme incorrectly applied by property developer
In a matter involving the application of the GST margin scheme to a property developer in the Australian Capital Territory (ACT) who had acquired 99-year leases from ACT development authority, the Tribunal has affirmed the Commissioner’s decision to disallow objections to amended assessments which had been issued on the basis that the taxpayer had incorrectly calculated the margin in relation to “non-money consideration” received and the application of the “reasonable valuation method”. The matter also involved whether GST Ruling 2001/6 and GST Ruling 2015/2 applied to bind the Commissioner and what was actually acquired by the developer for the purposes of ss 9-75 and 75-10 of the GST Act. (ZKSM and FCT (Taxation) [2025] ARTA 1298, 11 August 2025)
TPB terminates registration of former PWC partner
The Tax Practitioners Board has advised that it has terminated the tax agent registration of a former PricewaterhouseCoopers (PwC) partner and imposed a 4-year ban prohibiting him from re-applying for registration. The former partner was found to have breached multiple obligations under the Tax Agent Services Act 2009 and the Code of Professional Conduct. In light of this, the TPB found he was no longer fit and proper to be registered as a tax agent. ASIC said that in his capacity as a PwC partner and a specialist in Research & Development, former partner made false or misleading statements in applications for the Research & Development Tax Incentive (RDTI) lodged on behalf of clients – and that these applications did not meet the eligibility requirements for the RDTI and could not be substantiated.
ASIC takes action against a further 28 SMSF auditors
ASIC has advised that during the second half of FY25 it acted against the registration of 28 approved self-managed superannuation fund (SMSF) auditors. ASIC said that this brings its total actions against approved SMSF auditors in FY25 to 48. ASIC took these actions for various breaches of professional obligations, such as failing to maintain independence, non-compliance with auditing and assurance standards, non-compliance with continuing professional development requirements, failure to lodge annual statements, and/or for not being a fit and proper person to remain an approved SMSF auditor.
Thursday 14 August 2025
High Court – Pepsico: Commissioner loses on royalty and DPT claims
In a majority decision, the High Court has dismissed the appeals of the Commissioner from the decision of the Full Federal Court in PepsiCo Inc v FCT [2024] FCAFC 86. In that case the Full Court ruled that payments made by Schweppes Australia Pty Ltd to PepsiCo Beverage Singapore Pty Ltd for the supply of concentrate was not a royalty payment for the use of intellectual property, and that therefore it was not subject to withholding tax. The Full Court also ruled that diverted profits tax (“DPT”) under s 177J of Pt IVA of the ITAA 1936 did not apply to the arrangement. In dismissing the Commissioner’s appeals, the High Court held that on proper construction of the relevant agreements, the payments were for concentrate only and did not include any component which was a “royalty”. It also held that no tax benefit had been obtained by Pepsico (or others) in connection with a scheme under s 177J and that therefore DPT did not apply. (FCT v PepsiCo Inc and Ors v FCT [2025] HCA 30, 13 August 2025)
ATO response: The ATO said it “welcomes the High Court’s clarification of these important areas of law”. It also said it is currently considering this decision including any broader impact it may have on the reasoning set out in draft Taxation Ruling TR 2024/D1 Income tax: royalties – character of payments in respect of software and intellectual property rights.
Reminder: Special leave to appeal to High Court in Bendel case
The ATO has advised that it has updated its Decision Impact Statement on the decision of the Full Federal Court in FCT v Bendel [2025] FCAFC 15 in which the Court confirmed that Div 7A did not apply to a UPE made by a trust. It has been updated to note that special leave to appeal decision was granted to the Commissioner by the High Court on 12 June 2025.
GST cash basis for representatives of incapacitated entities
The A New Tax System (Goods and Services Tax) (Choosing to Account on a Cash Basis – Representatives of Incapacitated Entities) Determination 2025 has been made. It allows representatives of incapacitated entities to choose to account for GST on a cash basis under section 29-40 of the GST Act 1999.
ASIC to review superannuation investment requirements
ASIC has advised that it has commenced a review on the requirements to disclose stamp duty payments in Regulatory Guide 97 Disclosing fees and costs in PDSs and periodic statements (RG 97). It said concerns have been raised that the disclosure may impact performance test results and discourages investment in property by superannuation funds.
FRIDAY 15 August 2025
ATO crackdown on GST fraud continues
The ATO has advised that it continues in its crackdown on GST fraud, securing 4 further convictions. It said that these latest convictions push the total number of individuals held accountable under this operation to 126 sentenced to date, sending an unmistakable message that the ATO will not relent in its pursuit of those who defraud the tax system. The ATO also said that while prosecutions may take time, the ATO is consistently pursuing a broad spectrum of compliance actions against those involved and that every avenue is being leveraged to ensure individuals involved in this fraud face real and lasting consequences.
Small Business Superannuation Clearing House closing
The ATO has advised that as part of the Payday Super reform, the Small Business Superannuation Clearing House will close on 1 July 2026. It said to support small businesses to transition to alternative services prior to this time, new users will be unable to register to use the service from 1 October 2025. Existing users are encouraged to take steps now to transition to alternative options. These include reviewing your existing software and payroll packages, which may already include super functions, or looking at options offered by super funds, commercial clearing houses, or other payroll software or providers.
Court refuses application to give evidence from overseas
A taxpayer who lived outside Australia and owed $23m to the ATO has had his application dismissed for his testimony to be taken “on commission” in the UK pursuant to s 7(1) of the Foreign Evidence Act 1994. The taxpayer was unwilling to come to Australia to give evidence in his dispute with the ATO because of his “apprehension of detention” by a relevant law enforcement agency upon return to Australia (including the Commissioner). In refusing his application, the Federal Court took into consideration a range of matters including whether the taxpayer was able to give evidence that was material to issues to be tried and whether, having regard to the interests of the parties to the proceeding, “justice” would be better served by granting or refusing the application. (Gumm v FCT (No 3) [2025] FCA 927, 11 August 2025)
ATO: New data tackles fraud faster
The ATO has advised that it has further expanded its data-matching capability to safeguard taxpayers from identity crime enabled fraud attacks via its new Australian Financial Crimes Exchange (AFCX) data-matching program for 2024–25 to 2026–27 financial years. The ATO said that AFCX data will be matched against ATO records and other data holdings to identify bank accounts that are being used in fraudulent activity and that it anticipates receiving more than half a million records of suspected money mule bank accounts and malicious IP addresses through this program each year. The ATO also emphasised that its existing data-matching capability is already powerful and widespread and that receiving this additional data will strengthen its systems to ensure individuals who commit fraud are caught and held to account.
Addendum to GST Ruling re telecommunication supplies
The ATO has issued an addendum to GSTD 2012/7 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? It is updated to include amendments from the Treasury Legislation Amendment (Repeal Day) Act 2015 and update references.
SUPER & FINANCIAL SERVICES
APRA Highlights Urgent Need for Enhanced Retirement Income Strategies
In a recent address to the Conexus Retirement Conference, APRA Deputy Chair Margaret Cole emphasised the need for superannuation trustees to bolster retirement income strategies, driven by the Retirement Income Covenant introduced three years ago. There has been a recent shift towards prioritising retirement outcomes as retirement assets in APRA-regulated funds are projected to grow from $550 billion to $3 trillion over the next two decades.
Cole noted ongoing gaps, particularly in tracking and measuring the success of retirement income strategies, urging faster and more consistent progress across the sector.
To enhance transparency, APRA is collaborating with Treasury on a retirement reporting framework, set for annual publication from 2028. This framework will detail product offerings, member outcomes, and cohorting practices. Additionally, APRA’s June 2025 release of performance data for 600 multi-sector retirement-phase products aims to drive competition and innovation by providing clearer insights into investment returns, fees, and costs.
Cole highlighted technical challenges, including increased cyber and operational risks as more members access retirement funds, heightening scam and fraud vulnerabilities. Trustees must tackle liquidity risks, investment governance, and robust pension payment systems to effectively manage the expanding retirement asset pool.
Small Business Superannuation Clearing House closing
The ATO has advised that as part of the Payday Super reform, the Small Business Superannuation Clearing House will close on 1 July 2026. It said to support small businesses to transition to alternative services prior to this time, new users will be unable to register to use the service from 1 October 2025. Existing users are encouraged to take steps now to transition to alternative options. These include reviewing your existing software and payroll packages, which may already include super functions, or looking at options offered by super funds, commercial clearing houses, or other payroll software or providers.
ASIC Launches Review to Boost Superannuation Property Investment
ASIC announced it has initiated a targeted review of Regulatory Guide 97 (RG 97) to address disclosure requirements for stamp duty payments, which may be discouraging superannuation funds from investing in property. The review, prompted by industry feedback at a recent Treasurer-convened investor roundtable, aims to reduce regulatory barriers and enhance investment in Australia’s $4 trillion superannuation system.
ASIC Chair Joe Longo emphasised that the review will assess whether changes to stamp duty disclosure rules can improve transparency and performance test outcomes without compromising investor information. The review will also explore consistent disclosure for internally and externally managed private credit arrangements, potentially lowering costs for superannuation members and supporting business credit growth.
Question of the week
My client, a single member of an SMSF, failed to draw the minimum pension from her fund in 2024/25. What are the implications and what can I do to fix it?
Answer
If your client failed to draw the minimum pension in 2024/25 the pension ceased for tax purposes on 1 July 2024. As the pension rules were not met the account will be treated as being an accumulation account. This means there was no Exempt Current Pension Income (ECPI) in 2024/25.
If your client wants to resume claiming ECPI she must formally commute and restart the pension.
For Transfer Balance Cap purposes (TBC) the ‘debit value’ on the Transfer Balance Account (TBA) arises on 30 June 2025 for the value of the ‘pension’ at that time. The ‘credit’ value relating to the ‘new’ pension will be the commencement value at the time the new pension is commenced.