Compliance
Staying Compliant: Australia’s Expanded ATO Audit & Integrity Focus
Australia is ramping up funding and regulatory reforms aimed at boosting compliance. Businesses and individuals alike need to understand what’s changing to avoid penalties.
By NomadicTax Research Team • 5 min read • November 16, 2025
## New ATO Compliance Push
The 2025-26 Federal Budget includes nearly **AUD 1 billion** in additional funding for the ATO to enhance compliance programs. ([taxnews.ey.com](https://taxnews.ey.com/news/2025-0763-australias-2025-26-federal-budget?utm_source=openai)) Key areas include:
- **Tax Avoidance Taskforce** getting **AUD 717.8 million** over four years, focusing on multinationals and large groups. ([taxnews.ey.com](https://taxnews.ey.com/news/2025-0763-australias-2025-26-federal-budget?utm_source=openai))
- **Shadow Economy Compliance Program** with **AUD 155.5 million**, targeting under-reported income, illicit trade and worker exploitation. ([taxnews.ey.com](https://taxnews.ey.com/news/2025-0763-australias-2025-26-federal-budget?utm_source=openai))
- **Personal Income Tax Compliance** funding of **AUD 75.7 million**, addressing non-compliance by individuals. ([taxnews.ey.com](https://taxnews.ey.com/news/2025-0763-australias-2025-26-federal-budget?utm_source=openai))
- A **Tax Integrity Program** for medium/large businesses and wealthy groups, with **AUD 50 million** from 1 July 2026. ([taxnews.ey.com](https://taxnews.ey.com/news/2025-0763-australias-2025-26-federal-budget?utm_source=openai))
Also notable: reforms to **Tax Practitioners Board (TPB)**—stronger regulatory powers, modernized registration, sanctions targeting high-risk practitioners. ([au.andersen.com](https://au.andersen.com/federal-budget-report-2025/?utm_source=openai))
## Why This Matters
- The ATO is explicitly increasing oversight on **multinationals** and **high wealth individuals**, who often are under scrutiny for aggressive tax planning. ([taxnews.ey.com](https://taxnews.ey.com/news/2025-0763-australias-2025-26-federal-budget?utm_source=openai))
- Individuals and small businesses should expect increased audits or risk triggers if records are sloppy, if income is under-reported, or if deductions appear disproportionate.
- Tax agents and advisers face stricter compliance themselves: the TPB changes mean higher accountability and consequences for malpractice. ([au.andersen.com](https://au.andersen.com/federal-budget-report-2025/?utm_source=openai))
## Practical Measures You Should Take
- **Maintain thorough documentation**: income, expenses, deductions, and asset ownership must be clear and verifiable.
- **Rationalize deductions**: avoid aggressive or ambiguous deductions that could attract scrutiny.
- **Review your tax advisor**: make sure the professional is registered with TPB, with good standing, and that their advice is defensible.
- **Monitor your activities if a foreign investor or company**: recent proposals (e.g. foreign-resident CGT changes) show increasing attention to cross-border arrangements. ([dlapiper.com](https://www.dlapiper.com/en-AU/insights/publications/2025/03/australian-federal-budget-2025?utm_source=openai))
## Example Scenarios
- *Small business owner* who claims deductions for home office, travel and equipment. Key: keep receipts, evidence of business purpose. Public disclosure and standard practices should align with ATO rulings.
- *Foreign investor* selling shares: proposed rules will require notifying ATO for membership interest over AUD 20 million and broader CGT events connected with land. Actions: keep clear records, seek legal clarity on what assets are covered. ([dlapiper.com](https://www.dlapiper.com/en-AU/insights/publications/2025/03/australian-federal-budget-2025?utm_source=openai))
## Upcoming Triggers to Watch
- Legislation dates: many budget-measures take effect from **1 July 2025** or **1 July 2026**, depending on the program. ([taxnews.ey.com](https://taxnews.ey.com/news/2025-0763-australias-2025-26-federal-budget?utm_source=openai))
- Senate or Parliament reviews: proposed laws may change; always check latest from **ATO** or **Treasury**.
## Key Takeaway
Australia’s tax regime is moving towards a heavier compliance and integrity focus. For individuals, professionals, and businesses, staying compliant, transparent, and well-documented isn’t just good practice—it’s essential to avoid audit risk and be ready for forthcoming regulatory changes.