28 July 2025 to 1 August 2025
Weekly Bulletin Contents
TAX
Monday 28 July 2025
Taxpayer derived interest on its receipt, not as it accrued
A taxpayer has been unsuccessful before the ART in arguing that he derived interest in respect of contributions he made to a “construction industry long service leave fund” as it accrued each year and not when he received the interest on payment of his entitlement. In finding that the interest was assessable on its receipt, the ART took into account relevant case-law precedent, the trust deed and the rules of the fund to find the taxpayer was only entitled to the interest once he had met the relevant period of continuous service and that there was a written request for payment. Moreover, the ART emphasised that under the trust deed a beneficiary of the fund did not have “any right, title or interest of any nature to or in the Fund or … any Income … until the Trustee declares that the Beneficiary is presently entitled to it under clause 3.3”. (Bennetts and FCT (Taxation) [2025] ARTA 1092, 22 July 2025)
Government response to Committee on NFP self-review assessment regime
The Government has responded to the Senate Economics Committee’s final report on Not-for-profit entities – Tax assessments in which contained 5 recommendations relating to, among other things, the self-review assessment regime for not-for-profit (NFP) entities. These recommendations included: introducing thresholds to exempt smaller NFP entities from the self-review assessment regime; the appropriateness of the Australian Charities and Not-for-profits Commission (ACNC) managing the self-review assessment regime; and extending the deadline for the return of the NFP self-review assessment beyond 31 March 2025. In its formal response the government “noted” all of the recommendations. It also said that the Government supports the ATO continuing to help not-for-profits meet their obligations to provide a self-review return and that the ATO decides the best way of providing such assistance.
Entities fail in claim for substantial deductions
The Federal Court has dismissed the appeals of four taxpayer entities associated with a Mr Vanda Gould, a former tax accountant. The entities had been issued amended assessments in respect for the 2001 to 2014 income years in relation to substantial deductions claimed for interest and management fees involving alleged “sham” offshore borrowing arrangements. The taxpayers’ case depended upon the credibility of a Mr Gould as a witness who had put into place relevant arrangements. In dismissing the appeal and finding that the taxpayers had not discharged the onus of showing that the assessments were excessive, the court found, among other things, that no reliance could be placed on the version of events given by Mr Gould. It also found that the Commissioner that the taxpayers had not discharge the onus of proving that there was no fraud or evasion in relation to the issue of assessments that had been issued out of time. (South Seas Holdings Pty Ltd (Trustee) v FCT [2025] FCA 848)
Taxpayer Alert re GST refund arrangements
The ATO has published TA 2025/2: Arrangements designed to improperly obtain goods and services tax refunds. It strongly warns businesses against participating in arrangements the ATO has identified that are characterised by collusion between related businesses to create fraudulent invoices and attempt to claim large GST refunds. It says use of these arrangements is increasing, predominantly among privately owned medium to large businesses. Those involved are exploiting the system and gaining an unfair advantage over honest businesses.
Tuesday 29 July 2025
ATO: Helping your clients get their car claims right
The ATO has recommended that tax agents share these tips with clients before preparing their returns: (a) If you use your own car for work (whether you own it, lease it or hire under a hire-purchase agreement) you may be able to claim a deduction; (b) You can only claim for trips that were directly related to your work or were necessary to perform your work duties (which might include travelling directly between two separate jobs on the same day, or attending a work-related meeting); and (c) If you’re eligible, you can claim work-related car expenses using the cents per km method, or the logbook method – as long as you’ve kept the right records.
ATO: How to get stronger security re ATO app
The ATO has released information on how to get stronger security for ATO online services using myID and extra security with the ATO app. It involves the following 3 steps: Step 1: make your myID as strong as possible; Step 2: use your myID to access or link to ATO online services; Step 3: get the ATO app and allow push notifications. For full details see, here.
WA super schemes prescribed re unclaimed super
The Superannuation (Unclaimed Money and Lost Members) Amendment (2025 Measures No. 1) Regulations 2025 has been made. It provides for the following Western Australian public sector superannuation schemes to be included in the list of prescribed schemes under the relevant Regulations: the Government Employees Superannuation Board Super (Retirement Access) Scheme; GESB Super Scheme; Gold State Super Scheme, and West State Super Scheme.
Wednesday 30 July 2025
ATO: Attempted GST refund fraud on increase
The ATO has advised that tax professionals should be aware that GST fraud is on the increase – and that typically the fraud involves arrangements where a business colludes with another related business to create fraudulent invoices, so they can attempt to claim large GST refunds. The ATO said that fraud is currently predominantly within the property and construction industry. It also said that it has also identified early signs of it proliferating in other industries, particularly by privately owned and wealthy groups. The arrangements vary, but have some, or all, of the following features: false invoicing between related parties; deliberately misaligning GST accounting methods across a group to contrive a GST refund; duplicating GST credit claims in related entities for a single high-value transaction; and claiming GST credits for alleged purchases, development, and construction (by related entities) that never occurred. The ATO also warned that it regularly intercepts and stop suspicious claims before a refund is issued.
ATO: Public CBC reporting exemption consultations
The ATO has advised that it is hosting virtual consultation sessions about Public country-by-country (CBC) reporting exemptions on Thursday 7 August 2025, 11:00 am to 12:30 pm AEST and Friday 22 August 2025, 11:00 am to 12:30 pm AEST. The ATO said that to express your interest in participating, email [email protected]
RBA and APRA update their Memorandum of Understanding
APRA and the Reserve Bank of Australia (RBA) have published an updated Memorandum of Understanding (MOU), to further strengthen their cooperation and coordination arrangements in support of financial stability in Australia. The updated MOU sets out the RBA and APRA’s respective roles and responsibilities for contributing to financial stability, as well as arrangements for consultation, liaison and information sharing between the two agencies. The MOU also sets out specific arrangements for coordination between the RBA and APRA in relation to macroprudential policy, liquidity support, payments policy and crisis management.
Thursday 31 July 2025
ATO Joint operation exposes re scam syndicate
The ATO has advised that, together with the Australian Federal Police (AFP) and Services Australia, it executed search warrants at four properties across Western Sydney associated with individuals allegedly involved in an identity, tax and welfare fraud syndicate targeting innocent Australians. It said the ATO-led operation, which commenced in October 2024, has identified four individuals who are alleged to have engaged in an array of offences, including tax fraud, identity fraud, welfare fraud and money laundering. The alleged fraud involved the distribution of scam emails to unsuspecting Australians which contained links to websites that, when clicked on, enabled the fraudsters to gather their personal information and take over their identity.
CPI for June 2025 quarter
The Australian Bureau of Statistics has released the Consumer Price Index (CPI) number for the June 2025 quarter has been released. It is 141.7 (up from 140.7 for March 2025 quarter). Note: the CPI number is used for indexation of various tax related thresholds, including the CGT improvement threshold and various superannuation amounts.
ATO: Fuel tax credit rates
The ATO has released fuel tax credit rates for business (both present and past). It also sets out eligibility criteria to claim fuel taax credits. The ATO also said that its fuel tax credit calculator is the easiest way to work out what you can claim in your business activity statement (BAS), or calculate an adjustment or correction for a previous BAS. The ATO has also released fuel tax credit rates for non-businesses from 4 August 2025 and from 1 July 2025 to 3 August 2025.
FRIDAY 1 August 2025
No release from debt arising from partial CGT main residence exemption
A taxpayer has failed in her application before the ART for a release from a tax liability on the grounds of “serious hardship”. The liability related to a capital gain of $73,000 arising from a partial CGT main residence exemption from the sale of her home which resulted in a CGT liability (and from which proceeds had been used to make a “super downsizer contribution”). In affirming the decision not to grant the taxpayer release from the debt, the ART considered the meaning of phrase “serious hardship” and factors relating to the exercise of the discretion. It then concluded that release would not be appropriate in view of, among other things, that she prioritised other non-tax liabilities over her tax liability and that she had access to funds in her super account – some of which were contributed from the transaction which gave rise to the liability. (Alexander and FCT (Taxation and business) [2025] ARTA 1163, 30 July 2025)
Average small business tax refund tops $5k
New data shows, on average, that small business owners received a tax return of around $5,000 for financial year 2024. The number of refunds processed between July and September in 2024 were 75% per cent higher than the average number processed in the prior three quarters. According to the data, based on funds deposited into small business customer accounts by the ATO, the States with the highest average tax refunds were ACT and Queensland ($5,700), followed by Victoria ($5,300), NSW ($4,900) and WA ($4,800). Electricians and plumbing businesses top the list for average tax returns in NSW and TAS, mining contractors for WA, and education and communication services for VIC, while small agriculture businesses top the average tax return in Queensland. (Source: Commonwealth Bank media release, 31 July 2025)
ATO: Excise duty rates for alcohol
The ATO has released the current excise duty rates for alcohol on beer, spirits and other excisable beverages. The ATO has also released information on: How to use the right rate; How rates are determined; and Historical excise duty rates.
SUPER & FINANCIAL SERVICES
Government Writes 20% off Student Debts
The Universities Accord (Cutting Student Debt by 20 Per Cent) Bill 2025 has passed through Parliament and awaits royal assent. Upon receiving royal assent the legislation will:
- provide a one-off 20% reduction to Higher Education Loan Program (HELP) debts in HESA, and other student loans provided under the Student Loans Acts that are incurred on or before 1 June 2025 (debt reduction measure)
- increase the minimum repayment threshold from $54,435 in 2024-25 to $67,000 in 2025-26 (which will continue to increase each year with the growth in wages), and
- introduce a marginal repayment system where compulsory student loan repayments are calculated only on income above the new $67,000 threshold rather than having it based on a percentage of the repayment income.
Aged Care Amendments
A Bill making changes to the Aged Care Act 2024, Aged Care and Other Legislation Amendment Bill 2025 has passed the House of Representatives and is now in the Senate. The changes contained in the Bill support the rollout of aged care reforms.
Amongst other things, the Bill clarifies the application of retention rules to Refundable Accommodation Deposits (RADs) and Refundable Accommodation Contributions (RACs).
Institute of Financial Professionals Australia (IFPA) comment
The implementation of the new Aged Care Act was postponed to 1 November 2025. The new Act introduces significant reforms to Residential Aged Care and Home Care and was originally set to take effect on 1 July 2025.
ASIC Sues Advice Business Over Cybersecurity Failures
In a recent media release, ASIC confirmed they are suing a financial services licensee for not adequately managing cybersecurity risks.
ASIC claims the business lacked sufficient policies, frameworks, systems, and controls, exposing the company, its authorised representatives (ARs), and their clients to significant cyber-attack risks.
ASIC emphasised that protecting sensitive client information is an enforcement priority.
IFPA comment
The media release follows ASIC’s Key issues outlook 2025 which identified ‘cyber-attacks, data breaches, and internal system failures undermining market confidence and causing financial loss’ as an area of its focus.
Ruling Highlights Potential Overseas Tax for Non-Resident Super Pensions
A recent ATO private ruling serves as a reminder that superannuation pensions may be taxed overseas. The ruling noted that Australia does not have taxing rights over pensions received by a tax resident of another country where there is a double tax agreement granting taxing rights to the country of residency.
Whilst superannuation pensions are generally tax free to member’s age 60 or older in Australia this may not be the case overseas.