Compliance
Tax Agents & Practitioners: Compliance During Transition-State Changes
New ATO administrative policies and reviews mean practitioners must adapt now to reduce risk related to interest, penalties, and governance expectations.
By NomadicTax Research Team • 5-8 min read • November 14, 2025
## Key Administrative Changes Practitioners Need to Know
Several changes from the ATO aimed at making compliance easier and more transparent for practitioners and their clients include:
- **Simplified interest and penalty remission process:** Interim changes are underway to streamline GIC (General Interest Charge) remissions, payment plan approvals, and failure to lodge penalties. More clarity on eligibility and processing times are being introduced. ([ato.gov.au](https://www.ato.gov.au/about-ato/consultation/in-detail/stewardship-groups-key-messages/tax-practitioner-stewardship-group/tpsg-key-messages-3-june-2025?utm_source=openai))
- **Reviewing taxpayer relief provisions:** ATO is examining how relief for those under financial stress operates – especially for small businesses, vulnerable individuals, and those with capacity constraints. ([ato.gov.au](https://www.ato.gov.au/media-centre/commissioners-address-to-the-tax-institutes-tax-summit-2025?utm_source=openai))
- **Client-to-Agent linking & digital identity:** Stronger ID controls, linking clients and agents, and improving access methods are becoming more important to reduce fraud and strengthen the security of accounts. ([ato.gov.au](https://www.ato.gov.au/about-ato/consultation/in-detail/stakeholder-relationship-groups-key-messages/tax-profession-digital-implementation-group/tax-profession-digital-implementation-group-key-messages-5-march-2025?utm_source=openai))
## Governance & Risk for Agents
Practitioners should anticipate an environment of greater scrutiny:
- With the ATO’s **Justified Trust Program**, large businesses are expected to meet high standards of governance. Agents may be evaluated based on clients’ risk profiles. ([ato.gov.au](https://www.ato.gov.au/about-ato/consultation/in-detail/stewardship-groups-key-messages/large-business-stewardship-group/large-business-stewardship-group-key-messages-5-march-2025?utm_source=openai))
- Cases with complex arrangements—royalties, intangible assets, mischaracterised software transactions—are being closely monitored. Recent guidance (PCG 2024/1, draft ruling on software as royalties) signal tighter enforcement in these areas. ([ato.gov.au](https://www.ato.gov.au/media-centre/key-developments-in-tax-administration-in-australia?utm_source=openai))
## Practical Steps for Tax Professionals
- Review client portfolios to identify exposure to new rules (e.g. Pillar Two, mischaracterisation of royalties) and update or revise tax structuring as needed.
- Encourage clients to apply early for relief where possible; tailor strategies to avoid or reduce penalties during transition periods.
- Maintain clear, detailed documentation, especially for cross-border transactions, licensing of IP, or where functions/assets are split across jurisdictions.
- Stay up to date with draft law changes and substance requirements—participate in consultations, ensure software and reporting tools are compliant.
By proactively aligning practices to evolving regulations, practitioners can minimize risk, deliver better client outcomes, and reduce exposure to penalties or reputational damage.