Compliance
Staying Compliant in the Age of Fraud Prevention: What Businesses Need to Know
The ATO’s increased powers in fraud detection, withholding, and data gathering mean compliance is more serious than ever—businesses must prepare now.
By NomadicTax Research Team • 6 min read • June 4, 2026
## Why This Matters Now
The 2026-27 Budget doesn’t just bring generous cuts—it also strengthens compliance and misconduct prevention in the tax and superannuation system. Notably, the government is boosting the Australian Taxation Office’s ability to detect fraud, enforce integrity, and expand reporting powers. ([pm.gov.au](https://www.pm.gov.au/media/tax-reform-workers-businesses-and-future-generations?utm_source=openai))
## Key Compliance Changes
- **Counter Fraud Strategy (Phase 2)**: From 1 July 2026, ATO receives an additional A$86.3 million over four years (and ongoing from 2030-31) to modernise fraud prevention and detection across tax & super. New powers include ability to pause/waive tax debts for taxpayers victimised by intermediaries, target exceptions to tax secrecy, and garnishee powers over certain jointly held assets in fraud contexts. ([pwc.com.au](https://www.pwc.com.au/tax/monthly-tax-updates/may-2026.html?utm_source=openai))
- **Enhanced information-gathering & tax secrecy**: Expanded authority for the ATO to request data, particularly where fraud or abuse is suspected. ([mallesons.com](https://www.mallesons.com/au/en/insights/latest-thinking/australian-federal-budget-2026-27-tax-compliance?utm_source=openai))
- **Global / Domestic Minimum Tax (Pillar Two)**: Australia’s rules updated in 2024 registered with amendments to ensure effective administration, including clarification of domestic minimum tax in overlap with group consolidation. Retrospective from 1 January 2024 for some rules. If you’re a multinational or part of a corporate group, this is relevant. ([pwc.com.au](https://www.pwc.com.au/tax/monthly-tax-updates/may-2026.html?utm_source=openai))
- **Payday Super**: Employers need to ensure that super guarantee is paid each payday starting 1 July 2026, speeding up contribution timing and increasing administrative demands. ([softwaredevelopers.ato.gov.au](https://softwaredevelopers.ato.gov.au/PaydaySuper?utm_source=openai))
## What Businesses Should Do
### Update internal controls & payroll systems
- Ensure payroll software can handle rate changes for 16→15% (2026-27) and 15→14% (2027-28) bands. Align withholding, PAYG, etc.
- Implement systems to support the **Payday Super** requirement: new code Q, ensure super fund payments within 7 business days, upgraded data feeds. ([softwaredevelopers.ato.gov.au](https://softwaredevelopers.ato.gov.au/PaydaySuper?utm_source=openai))
### Review trust distributions and entity structures
- Discretionary trusts will face a **30% minimum tax** on undistributed income from 1 July 2028. Plans for distributing income before that date may change beneficiary strategies. ([austax.tools](https://austax.tools/tax-insights/federal-budget-2026-summary/?utm_source=openai))
- Entities in multinational groups should assess exposure to Pillar Two minimums, adjust tax planning for the rules that already apply from January 2024. ([pwc.com.au](https://www.pwc.com.au/tax/monthly-tax-updates/may-2026.html?utm_source=openai))
### Strengthen record-keeping & transparency
- With instant deduction up to A$1,000 without receipts, but beyond that or for larger claims: keep documentation robust, especially for pre-1 July 2026 expenses under previous rules.
- Be prepared to respond to new information requests, including from agents/intermediaries, with accurate data on property transactions, related party dealings, etc.
## Real-World Examples
- **Tech startup**: facing R&D tax incentive reforms from 1 July 2028 now, so begin preparing claims, expense documentation, and project thresholds now to avoid last-minute scramble. ([austax.tools](https://austax.tools/tax-insights/federal-budget-2026-summary/?utm_source=openai))
- **Property developer**: Acquire new builds or contract them before reforms take full effect to maintain eligibility for negative gearing. Existing contracts or holdings get grandfathered. ([pm.gov.au](https://www.pm.gov.au/media/tax-reform-workers-businesses-and-future-generations?utm_source=openai))
## Strategic Takeaways
- Compliance is no longer just about avoiding penalties—it’s integral in preserving tax benefits under new reforms.
- Early adoption of process and system upgrades will reduce risk and cost.
- Advisors and business leaders should model forecasts considering tax rate changes, entity tax floors, minimum taxes, and altered deductions.
Being proactive now, rather than reactive when laws are in place, can save organisations both money and regulatory risk.