Compliance
Compliance Alert: New Penalties for Tax Agent Misconduct & Super Changes Over $3 Million
Australia has introduced tougher sanctions for unregistered tax agents and updated superannuation tax rules for balances above $3 million from mid‐2026—what you need to know.
By NomadicTax Research Team • 5-8 min read • July 29, 2026
## Stronger Penalties for Tax Practitioners Services
- **Criminal penalties** will now apply to **unregistered tax preparers** engaging in misconduct. ([ministers.treasury.gov.au](https://ministers.treasury.gov.au/ministers/andrew-leigh-2025/media-releases/stronger-penalties-tax-misconduct?utm_source=openai))
- **Civil penalties** under the **Code of Professional Conduct** will increase; the Tax Practitioners Board (TPB) will also be empowered to issue **infringement notice penalties**, allow **interim or contingent registration suspensions** and order **voluntary undertakings**. ([ministers.treasury.gov.au](https://ministers.treasury.gov.au/ministers/andrew-leigh-2025/media-releases/stronger-penalties-tax-misconduct?utm_source=openai))
- The **maximum period** for termination of registration will double to **10 years**. All these measures are in response to issues like the **PwC tax leaks** and a TPB review. ([ministers.treasury.gov.au](https://ministers.treasury.gov.au/ministers/andrew-leigh-2025/media-releases/stronger-penalties-tax-misconduct?utm_source=openai))
## Division 296 – Super Balances Exceeding $3 Million
- From **1 July 2026**, if your **total superannuation balance (TSB)** exceeds **AU$3 million**, you may pay **15% tax on the portion of earnings** that corresponds to the balance over this threshold. ([community.ato.gov.au](https://community.ato.gov.au/s/article/a07Mo00001w0qcO/what-division-296-tax-changes-means-for-your-super-balance?utm_source=openai))
- If your balance exceeds **AU$10 million**, an extra **10% tax** applies on earnings linked to amounts above that very large threshold. ([community.ato.gov.au](https://community.ato.gov.au/s/article/a07Mo00001w0qcO/what-division-296-tax-changes-means-for-your-super-balance?utm_source=openai))
## Practical Implications and Steps to Take
- Tax practitioners should **review credentials**, ensure registration compliance, and understand greater risk of lengthy suspensions or criminal exposure.
- Individuals with super balances approaching or exceeding **AU$3 million** should examine investment strategies, timing of withdrawals, or isolating portions of super to manage exposure.
- Accountants, estates, or wealth advisors need to update modelling to reflect the **new tax on earnings** above thresholds—old assumptions no longer hold.
## Example Scenarios
- *Case A*: Someone with a **super balance of AU$5 million**—**AU$2 million** of that is above the $3 million threshold. Earnings proportional to that income over $3 million will be taxed at 15%.
- *Case B*: Someone with **AU$12 million**—Earnings on AU$7 million above $3 million taxed at 15%; earnings above $10 million taxed at additional 10% over that portion.
## Actionable Advice
1. **Monitor your TSB** during 2026-27 financial year.
2. **Adjust contributions** if possible to stay under the next threshold limit.
3. **Seek professional advice** now rather than waiting until tax assessments.
4. For agencies, firms, and practices: **review internal processes**, ensure staff know new practitioner obligations and exposure to penalty risks.
Compliance is not optional. With these strengthened rules and higher penalties, both individuals and advisors need to stay proactive.