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) Key areas include:
- Tax Avoidance Taskforce getting AUD 717.8 million over four years, focusing on multinationals and large groups. (taxnews.ey.com)
- Shadow Economy Compliance Program with AUD 155.5 million, targeting under-reported income, illicit trade and worker exploitation. (taxnews.ey.com)
- Personal Income Tax Compliance funding of AUD 75.7 million, addressing non-compliance by individuals. (taxnews.ey.com)
- A Tax Integrity Program for medium/large businesses and wealthy groups, with AUD 50 million from 1 July 2026. (taxnews.ey.com)
Also notable: reforms to Tax Practitioners Board (TPB)—stronger regulatory powers, modernized registration, sanctions targeting high-risk practitioners. (au.andersen.com)
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)
- 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)
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)
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)
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)
- 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.