Compliance
Strengthening Compliance: What Businesses Must Know from ATO’s New Enforcement Measures
New laws and funding boosts targeting tax avoidance and under-reporting mean businesses need to update their compliance strategies.
By NomadicTax Research Team • 5-8 min read • April 20, 2026
## What’s New in Compliance
The Australian Government is sharply increasing the resources and scope of enforcement for tax compliance. Measures include:
- **AU$1 billion funding boost** over the next four years for the ATO to expand its **Tax Avoidance Taskforce**, Shadow Economy Compliance, Personal Income Tax Compliance, and Tax Integrity programs. ([ashurst.com](https://www.ashurst.com/en/insights/australia-federal-budget-2025-2026-key-tax-measures/?utm_source=openai))
- Introduction of the **Treasury Laws Amendment (Delivering an Efficient and Trusted Tax System) Bill 2026**, proposing several technical and structural changes to streamline reporting and tighten deduction rules. ([pwc.com.au](https://www.pwc.com.au/tax/monthly-tax-updates/april-2026.html?utm_source=openai))
- Key changes from this Bill and related legislation include **removing the AU$2 threshold for deductible gifts or contributions**, **streamlining how closely held trusts report beneficiary information**, and **excluding tobacco and gambling activities from the R&D tax incentive**. ([pwc.com.au](https://www.pwc.com.au/tax/monthly-tax-updates/april-2026.html?utm_source=openai))
- A new **division 296 tax** is now law, reducing tax concessions for individuals with **large superannuation balances**. Also, the **low-income superannuation tax offset** is being amended. ([pwc.com.au](https://www.pwc.com.au/tax/monthly-tax-updates/april-2026.html?utm_source=openai))
## Implications for Businesses and Tax Professionals
- Prepare for increased audits and enquiries, particularly in **trust structures, multinational entities**, and **high-income earners**. Good record-keeping is more critical than ever.
- Review your business’s eligibility for R&D incentives: if any part of your R&D relates to **tobacco or gambling**, those parts are being excluded. This could affect ongoing claims. ([pwc.com.au](https://www.pwc.com.au/tax/monthly-tax-updates/april-2026.html?utm_source=openai))
- For charities, trusts, and individuals making gifts, the removal of the AU$2 threshold for deductible gifts makes even small donations fully deductible. Ensure processes are updated.
- Closely held trusts must review beneficiary reporting practices: more transparency, more consistent reporting may be required under the amended Bill.
## Actionable Steps
- Conduct a risk assessment of your entity: where is your exposure—trusts, superannuation, R&D, large deductions?
- Update governance and advisor engagement: ensure tax advice is well-documented and covers new rules.
- Reassess R&D projects in light of new exclusions. Consider reallocating R&D work away from excluded activities.
- For high net-worth individuals and those with large super balances, evaluate super structure and thresholds to minimise extra Division 296 taxation.
- Train staff and advisors on updated reporting obligations, especially beneficiary reporting and deduction qualification.
## Example Scenario
**Optima Pty Ltd**, a company with multiple R&D projects, recently includes an experimental study involving testing tobacco-derived compounds. Under current drafts, any R&D spending linked to **tobacco or gambling** is excluded from tax credits. Unless the company modifies its R&D program or segregates these elements in accounting, it risks losing tax incentive benefits. Hence, it restructures project accounting to exclude those excluded activities.
Similarly, a family trust in which beneficiaries move in and out frequently must tighten up reporting processes to meet the new “beneficiary information” rules proposed. Failure to comply could trigger penalties or loss of trust integrity.
In short: the **compliance landscape is tightening**. Getting ahead now—through process, documentation, and engagement—can avoid financial and reputational risk down the road.