Tax Planning
Tax Planning Moves You Should Make Before the 2026-27 Australian Tax Year
With key tax rate changes and integrity rules arriving 1 July 2026, now is the time to strategise deductions, income timing, and entity decisions to minimise your tax burden.
By NomadicTax Research Team • 5-8 min read • April 15, 2026
## What’s Changing from 1 July 2026
- Rate on income between AUD 18,201 and AUD 45,000 drops from **16% to 15%**, with a further cut to **14% from 1 July 2027**. ([ato.gov.au](https://www.ato.gov.au/about-ato/new-legislation/in-detail/individuals/personal-income-tax-new-tax-cuts-for-every-australian-taxpayer?utm_source=openai))
- Increased thresholds for the **Medicare levy low-income exemption**, benefiting over one million low-income Australians. ([ashurst.com](https://www.ashurst.com/en/insights/australia-federal-budget-2025-2026-key-tax-measures/?utm_source=openai))
- New obligations under **Pillar Two global minimum tax rules** for multinational or multiple entity consolidated groups. Compliance & reporting guidance is now published. ([ey.com](https://www.ey.com/en_au/technical/tax/tax-alerts/2026/ato-steps-up-pillar-two-readiness-releasing-new-guidance-for-taxpayers?utm_source=openai))
## Key Planning Moves Before 30 June 2026
### Defer Income or Bring Forward Expenses
- If you expect to be in the 16% bracket, consider deferring some income into the 2026-27 year so lower rate applies.
- Prepay deductible expenses to bring forward deductions into earlier year if you are already in a higher bracket.
### Reassess Entity Distributions and Profit Retention
- If using companies or trusts, review distributions: taxable distributions before 30 June might still be taxed under old bracket.
- For entities with global operations, assess impact of Pillar Two rules—take steps to minimise top-up tax exposure.
### Superannuation Strategies
- The ATO is signalling tighter integrity measures and possible restrictions. Review whether your super balances are near new thresholds for possible additional taxation (e.g. high-balance super rules forthcoming).
### Maximise low-income rebates and levy exemptions
- With Medicare levy threshold increases, some who previously paid levy may now be exempt or pay reduced levy. Ensure your taxable income is assessed accurately factoring in all deductions.
## Compliance Considerations During Planning
- Ensure any accelerated deductions or deferrals are legitimate and well-documented—ATO has increased integrity programs and audit focus.
- Keep tight records: invoices, prepayments, beneficiary statements (for trusts), international income reporting.
## Actionable Steps List
- Review your 2025-26 year budget forecasts; simulate after new rates.
- Meet with an accountant if you have complex income or entities.
- If in multinational/consolidated group, register for Pillar Two reporting and understand obligations due 30 June 2026.
- Take advantage of low income thresholds and levy exemptions now—ensure eligibility.
**Final Thought:** With tax cuts coming, aligning your income timings, deductions, and entity structure before 30 June 2026 can make a noticeable difference to your tax outcome.