Stronger Penalties for Tax Practitioners Services
- Criminal penalties will now apply to unregistered tax preparers engaging in misconduct. (ministers.treasury.gov.au)
- 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)
- 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)
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)
- 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)
Practical Implications and Steps to Take
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Tax practitioners should review credentials, ensure registration compliance, and understand greater risk of lengthy suspensions or criminal exposure.
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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.
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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
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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%.
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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
- Monitor your TSB during 2026-27 financial year.
- Adjust contributions if possible to stay under the next threshold limit.
- Seek professional advice now rather than waiting until tax assessments.
- 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.